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Expat Insider - The World Through Expat Eyes

Colombia and Vietnam Still a Financial Paradise for Expats

Countries with weaker economies find themselves at the bottom of the ranking and leave expats disappointed with their finances.
  • #1 Colombia goes from strength to strength.
  • In #2 Vietnam, 91% rate the cost of living favorably.
  • 40% mention finances as a reason for moving to #3 Mexico.
  • Ecuador makes an incredible comeback in the top 5.
  • New contender Bulgaria is off to a good start in 5th place.
  • Greece gets stuck in last place again.

Methodology

In the Expat Insider 2018 survey, 68 countries are listed in the Personal Finance Index. In order to be featured, each country needed to have a minimum of 75 respondents; however, more than 55 countries had a sample size of at least 100 participants.

The Personal Finance Index is based on two rating questions with a scale of one to seven: expats’ perception of their financial situation and whether they consider their income enough to cover all living expenses. The first question carried double the weight when the average ratings were combined to create this index.

To give a more rounded picture of the survey participants’ financial situation abroad, insights from the Cost of Living Index are included in this article. As it is rather similar to the Personal Finance Index, however, the Cost of Living Index is not included in the overall country ranking; this keeps the financial aspects of life abroad from being overrepresented in the final results.

Consistently Top of the Leaderboard

For the second year in a row, Colombia and Vietnam are the two best expat destinations in terms of personal finance — this time, though, Colombia claims first place. Following the country’s impressive jump from ranking 19th in 2016 to 2nd in 2017, Colombia has made the final push to the top in the 2018 survey. It also tops the ranking for the respondents’ satisfaction with their financial situation abroad — 84% are generally satisfied, and over a third (34%) even give this factor the highest possible rating.

My salary in Vietnam is similar to home, but the cost of living is very low.

Ranking 2nd out of 68 countries in the Personal Finance Index, Vietnam impresses again by offering expats a generous disposable income: 93% think that their household income is enough or more than enough to cover all living expenses in Vietnam, compared to a global average of just 78%. “My salary is similar to home,” shares an Australian expat, “but the cost of living is very low.” Among other factors, expats are drawn to Vietnam for financial reasons, since 88% considered the local cost of living a potential benefit before relocating (more than double the global average of 42%). In fact, over 91% rate the cost of living favorably, and more than half (52%) are very satisfied — it’s easy to see why Vietnam comes third in the Cost of Living Index.

Mexico sneaks into the top 3 destinations in the Personal Finance Index for the first time since 2015. A third of the expats living in Mexico are very happy with their financial situation. Nearly nine in ten (89%) — only slightly less than in Vietnam — say their disposable income is enough or more than enough to cover all their living expenses abroad, and 65% say it’s even more than what they need. Mexico’s favorable cost of living is an attraction to expats: 82% considered it a potential benefit before moving, with 40% mentioning financial reasons as a motivation for relocating to Mexico — more than double the global average of 16%.

Ecuador Bounces Back

The South American country, previously very strong in terms of personal finance, has regained its reputation as a great financial destination for expats, recovering from a poor performance in 2017. Ecuador is the biggest winner by far in 2018, rising an impressive 36 places in this index (from 40th out of 65 to 4th out of 68). Over eight in ten expats (83%) — nearly as large a share as in Colombia, the 2018 winner — are satisfied with their financial situation abroad: for this factor, Ecuador ranks second worldwide. Similar to other South American countries in the Expat Insider survey, Ecuador boasts generally affordable healthcare (83% rate this factor positively). Financially, Ecuador has improved all around, rising 10 places from 16th to 6th in the Cost of Living Index — in 2018, 84% of expats are satisfied with the cost of living in general.

Bulgaria: Strong First Impressions

For the first time in five years, Bulgaria features in the Expat Insider survey, immediately coming in 5th place out of 68 countries in the Personal Finance Index. Almost three-quarters of the respondents in Bulgaria (73%) consider their disposable income more than enough to cover everything they need, a great deal more than the global average (51%). “I love the fact that my income goes a long way,” a US American respondent shares.

I love the fact that my income goes a long way in Bulgaria.

Bulgaria tops the Cost of Living Index, as almost every expat (97%) regards the cost of living as affordable. More than nine in ten (91%) also considered the cost of living a potential benefit of moving to Bulgaria — more than double the average worldwide (42%). This probably helps to explain why almost a third of the expats in Bulgaria (32%) are completely satisfied with their personal financial situation.

Stuck at the Bottom of the Pile

Sitting in 68th position, Greece remains in last place for the fifth time since 2014, even though the 2018 ranking features more countries than ever before (68). Less than half the expats living there (46%) are satisfied with their financial situation abroad (vs. 67% globally). Joining Greece at the bottom of the Personal Finance Index are Italy and Argentina — once again. Italy has always been one of the bottom 5 countries in this index, and it performs particularly badly in 2018, as a third of the respondents in Italy feel their disposable household income is not enough for daily life. Only 6% of expats in Italy — and the same percentage in Argentina — think that their income is a lot higher than what they need. Compared to a global average of 51%, only 29% of expats in Argentina are satisfied with the cost of living, while 60% think it’s bad.

With the sole exception of 2016, Israel has made the bottom 5 countries for personal finance for four out of five years, and after a short recovery in 2017, Ireland is also back among the five worst countries for personal finance. In both countries, the share of expats satisfied with their financial situation is below the global average (56% in Ireland and 54% in Israel, compared to 67% globally). However, a high proportion of expats seem to have been aware of such financial disadvantages before moving — 37% of respondents in Ireland, as well as 40% in Israel, considered the cost of living a potential downside to moving abroad (vs. 24% worldwide). Despite many being unsatisfied with their financial situation, expats in both Ireland and Israel rate the state of the local economy favorably — this factor receives 68% positive ratings in Ireland and 70% in Israel.

Winners and Losers

As mentioned above, the biggest winner in the 2018 Personal Finance Index is Ecuador with its impressive climb of 36 places in the ranking. Australia — another big winner in general — follows closely behind. The sunny expat hotspot has gone up 22 places, and its financial satisfaction ranking even rose from 61st to 33rd position.

Most leisure activities like dining and culture are very expensive in Australia.

More than three-quarters of the expats living in Australia (76%) rate the state of the economy in a positive manner, though the cost of living still seems to be an issue for many — over two in five (43%) judge this factor unfavorably. A French expat in Sydney remarks that “most leisure activities like dining and culture are very expensive here”.

Continuing the Latin American success stories in 2018, both Chile and Panama are up 21 places from their 2017 results in the Personal Finance Index. More than seven in ten expats in Chile (73%) are satisfied with their financial situation abroad, and the share in Panama is even higher at 78%. In both countries, the respondents’ household income seems to be enough to cover daily living expenses: Chile ranks 11th place out of 68 destinations for this factor, and Panama is even among the top 10.Unfortunately, some countries haven’t experienced such success in 2018, dropping in the index instead. South Korea drops out of the top 10, falling 21 places to rank 28th in 2018. Similarly, Russia and Saudi Arabia fall 20 places to rank 42nd and 31st, respectively, in the Personal Finance Index in 2018. Nearly one in five expats (19%) are not satisfied with their financial situation in Saudi Arabia, for instance, compared to 11% who said the same in 2017. Surprisingly, the neighboring UAE also lands in the bottom 10. In 2018, only 57% of expats in the UAE are happy with their personal financial situation, compared to a global average of 67%.

Further Reading