Low cost of living — and why that rarely means you have more left at the end of the month

What the term "cost of living" really measures

When a travel guide states that Bulgaria is "one of the cheapest EU countries," this is statistically accurate: Eurostat annually collects the Price Level Index (PLI) for consumer goods and services, normalized to 100 for the EU average. Bulgaria scores around 50, Romania about 60, Poland around 65 — Denmark and Ireland around 140, Luxembourg around 130, France and Germany around 105–108 (as of Eurostat 2024).

This means that the same basket of goods in Sofia actually costs only about half of what it does in Copenhagen. However, this index only tells half the story. What it doesn't account for is the wage level — and this varies just as widely, often even more so, across the EU.

Before choosing your destination, you should always consider both values together: what does life cost and what can you realistically earn there.

Example values from several EU countries

A rough orientation using Eurostat values from 2024 — referring to gross annual earnings in full-time employment (Eurostat Mean annual earnings) and the Price Level Index (PLI):

Country	PLI (EU=100)	Average full-time gross earnings	Approximate ratio
Luxembourg	130	79 000 €	very high
Denmark	142	65 000 €	high
Netherlands	117	58 000 €	high
Germany	108	52 000 €	medium-high
France	110	43 000 €	medium
Spain	92	32 000 €	medium
Italy	100	33 000 €	medium-low
Czechia	75	22 000 €	medium-low
Poland	65	18 000 €	medium-low
Romania	60	14 000 €	low
Bulgaria	50	11 000 €	low

The table shows: Bulgaria has about half the prices of the EU average — but also about one-fifth of Denmark's wages. A "cheap" country rarely means a financially easier life, but often reflects a different overall economic level. If you are a third-country national working at the local rate, you will have less disposable income in Sofia than someone earning the minimum wage in Munich.

Three scenarios where it does work — with a crucial caveat for third-country nationals

There are situations where a cheap country can actually become financially attractive. Important caveat upfront: These scenarios are primarily designed for EU citizens who can move, settle, and work freely within the EU. For third-country nationals, they often fail due to residence permits — because a national visa in almost all EU countries is usually tied to a specific activity, a study place, or a business connection in the country of residence itself. The visa issuance for "living in Poland but working for a German company" is rarely possible in practice. Therefore, read the following three points with this warning in mind.

• Remote work with Western wages. If you have a fixed contract with a company in Germany, the Netherlands, or Sweden and live in Poland, Romania, or Spain, you benefit from Western wages with lower living costs. However, this requires two things: that your employment contract allows working from abroad (many companies restrict this for tax and social security reasons), and that you have a valid residence permit in your country of residence. Third-country nationals usually fail on the second point: Poland, Romania, and Spain generally only grant residence permits to third-country nationals if the activity is for a local employer or if a national self-employment or digital nomad visa route exists (Estonia, Portugal, and Spain offer the latter in limited form). Simple "remote work based on a contract from your home country" is not a separate residence purpose under visa law.
• Studying in a cheap country with a scholarship from a wealthier country. Erasmus+ and some national programs provide lump-sum grants. In a cheap host country, this often suffices comfortably, while in an expensive country, it is less so. Warning: Erasmus+ is primarily designed for students from program countries (EU plus some associated countries). Third-country nationals from partner countries can participate in the Erasmus+ International Credit Mobility program, but only to a limited extent and only if the respective university partnership exists. The study visa is also issued by the host country, not the scholarship-granting country — you must be admitted to a local university.
• Self-employment in a niche with international clients. IT consulting, translation, online coaching — if your fees are oriented towards the Western market and you live in a cheaper country, the calculation quickly tips in your favor. Visually challenging for third-country nationals: Most EU countries require a local business connection for their self-employment visas — a local business plan, local clients, local economic substance. If you have clients exclusively outside the EU or in the scholarship-granting country, you risk that the self-employment visa is either not issued or denied upon renewal. A few countries (Estonia with the Digital Nomad Visa, Portugal with the D7- and D8-Visum, Spain with the digital nomad visa introduced in 2023) have created specific pathways for this lifestyle — but they are exceptions, not the rule.

In all three cases, the advantage lies in the separation of income source and place of residence. As soon as you participate in the local labor market, the advantage usually disappears. And: as soon as you enter as a third-country national, you must first find a residence permit that legally allows this constellation — otherwise, it remains a theory for EU citizens.

What the table does not show

Three things that are not or only roughly reflected in the PLI index but are financially relevant:

• Rental market in major cities. The PLI is a national average. Rents in Lisbon or Madrid have risen so much in the last five years that the national values are overly optimistic for a young person looking for an apartment in the capital. Lisbon now has living costs comparable to Berlin or Vienna — at Spanish or Portuguese wages.
• Social security contributions and taxes. Gross earnings are not net earnings. Belgium, France, and Germany have high deduction rates; Bulgaria and Romania have significantly lower ones. If you compare based on the same gross earnings, you are comparing incorrectly. The OECD publishes the Tax Wedge annually, which measures exactly this.
• What you bring from home. If you support family, repay student loans, or want to build savings, what matters in the end is how much euro you have left and can transfer home — not how far your salary goes locally. In countries with a low PLI, the remaining amount after obligations is often similar to that in more expensive countries because the obligations are fixed in euros.

How to make an honest estimate

A rough rule of thumb to compare offers:

1. Determine the gross salary of the specific position (not the national average — industry and city matter).
2. Estimate the net salary using a local gross-net calculator (available in every EU country online; consider tax class, marital status, insurance obligations).
3. Estimate fixed monthly mandatory expenses: rent in the specific city (not national), health insurance, public transport, internet, telephone, possibly student loans.
4. Calculate the comparable remaining amount — this is the money that you actually have left for living expenses, saving, traveling, and supporting family.

If you only compare the PLI, you can be off by a factor of two.

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vamosa provides you with the data points on cost of living and wages per country — but we do not offer individual salary or career advice. On the country detail pages, you will find references to gross-net calculators and counseling centers for fair pay (trade unions, consumer advice centers, professional associations). In countries with a minimum wage, it is worth looking at Eurostat's minimum wage statistics — they tell you how low the wage level in an industry can realistically drop.