Is the US a cheaper place to live?
People ask me, maybe as much as they ask anything else, about how New Zealand and America compare in terms of cost of living.
Getting a read on this issue becomes murkier the longer I am away. I have a general sense that New Zealand is more expensive but my instincts have blurred.
When I first moved to America I was always translating prices in my head back to New Zealand currency, exclaiming to whoever would listen how they stacked up and what was a better deal in the USA compared with home.
But before long I was doing this less. I was earning in local currency and the translations started to seem less and less valid. Soon, all that was left was a vague notion of what was more expensive and what wasn't, but with no real way to quantify it.
But I've begun to wonder recently, how exactly does my cost of living compare now to what it might be in New Zealand?
Like a good researcher I decided to lean on the internet to bring me answers. (I've translated all sums of money into New Zealand currency for easier comparison.)
Real estate in San Francisco is prohibitively expensive. LP and I have already had our post-wedding "maybe we'll buy a house and put down some roots" high knocked out of us. The median price for a house in San Francisco is $837,804. In Auckland it is $500,000. The rule of thumb seems to be that if you can afford to buy it in San Francisco you probably don't want to live in it.
I don't use a landline in America. But we paid $36 a month in Boston for broadband with no data cap. In New Zealand Telecom retails 30GB broadband plans for $75 a month.
Electricity is much cheaper in the United States; Americans pay about 10 cents less for each kilowatt of power they use than New Zealanders do. This country is also in the middle of a massive boom in natural gas production and so gas heating and power do not incur much of a cost here, either.
A block of cheese, two litres of milk and a loaf of bread retail for $18.70 in New Zealand (I took those prices from the Countdown website). You'll save a little over $4 on that shopping list at a big-box American supermarket. (I did that research myself!)
A dozen Tui from Regional Wines and Spirits costs $20, versus about $12 for a dozen Budweiser from a supermarket in California. If you then want to go crazy out drinking and pick up a packet of cigarettes, a pack of Marlboro 20s is $7 in the US, but $16 in New Zealand.
Books are a lot more of a burn in your wallet in New Zealand than in America and the price disparity is much greater than it is with books and CDs. The new Zadie Smith book is $37 from Unity Books in paperback but $32.75 from my local San Franciscan Books Inc, in hardcover. The paperback is not out yet and will retail for less than $20 here when it is.
Clothing is extremely expensive in New Zealand. The same pair of Levis can retail for $140 in New Zealand but $75 in the United States and maybe $20 at Walmart, if you are looking really hard. I bought a pair of Chuck Taylors a few weeks ago (my first pair... at 28-years old!). They cost me $45. In New Zealand they would have cost me $90.
I guess it is not that much of a surprising answer. Consumer goods are cheaper in America because things have to go further to get to New Zealand. We're also a small place, with less purchasing power and economies of scale.
As for why food and power is more expensive, I have theories, but nothing concrete. What is your take on this? What do you attribute it to?
It is not all bad news for New Zealand though.
In a major American city, rent is a considerably greater financial burden than in New Zealand. You've then got to factor health insurance on top of that, a base living expense of $80 each month (and I have an inexpensive, skeletal plan) that protects me only from medical catastrophe.
So I should add this as a caveat: maybe New Zealand is a more expensive place to simply spend money, but America could be the more expensive place to live, period?