Which city has the most affordable cost of living in the world?

Transitioning to living abroad can be a costly step, at least due to upfront expenses. However, moving to certain cities can actually help you save money in the long run.

According to the Worldwide Cost of Living Index, collected twice a year by the Economist Intelligence Unit, as of March 2014, cities with affordable living costs are spread across most continents.

This report compares the prices of 160 items and services, from cars to bread and alcohol, across 131 cities. We will focus on the top 10 cities with the most affordable cost of living this year.

Which city offers the most affordable cost of living worldwide?

Mumbai, India

Ranked as the 131st city out of a total of 131.

Being the most budget-friendly city in The Economist's report, India's most populous city is also one of the most diverse.

With the construction of the Suez Canal in 1869, Mumbai became one of India's major commercial ports, experiencing a surge in population, especially from European and Asian businessmen and settlers. In addition to its multicultural nature, it is a thriving urban center with numerous opportunities, particularly in business, film, and fashion.

With reasonable prices, movie tickets, and cocktails costing only half as much as in New York and London, public transportation and taxis are also only 10% of the price in New York or London. A taxi ride of 8km costs only 161 Indian Rupees (equivalent to 2.70 USD). Services are also affordable – for less than 1,000 USD per month, you can hire a chef, a butler, and a driver.

Although Mumbai is considered the most budget-friendly city in the world, many residents feel that housing costs can be expensive; some young people cannot afford to live independently despite good salaries. In Mumbai, a 85m2 house is priced at 1,105 USD per month.

Kathmandu, Nepal

Ranked 127th out of a total of 131 cities.

As the gateway to the Himalayas, Kathmandu boasts outdoor entertainment culture, with people taking office work outdoors. When not working, locals spend time dining at the many emerging restaurants or at bars; by law, bars must close at midnight, so nightlife starts earlier here.

Housing prices and affordable living costs make Kathmandu desirable. A loaf of bread costs 36 Nepalese Rupees (0.37 USD). A fancy restaurant lunch for two costs about 385 Rupees (4 USD), and the price of a liter of gasoline is 141 Rupees (1.50 USD). The average rent for a 86m2 house is around 34,000 Rupees (300 USD) per month.

Kathmandu lacks high-rise apartments, and most residents live in single-family homes with spacious yards. The wealthy and foreigners tend to reside in newly developed areas in the outskirts of the city and around the Kathmandu Valley.

Zeljka Shah, originally from Croatia, recently moved to the city and says, “If you buy local food, dine at local eateries, and live like a Nepali, then Kathmandu is a city with low costs. But if you want to indulge in Western cuisine at restaurants, it can be quite expensive.”

Panama City, Panama

Ranked 124th out of a total of 131 cities.

This city ties in the affordability score with Bucharest, Romania. However, residents in this Central American city often work six days a week despite knowing how to unwind.

Casco Viejo and Calle Uruguay are districts for nightlife catering to both backpackers and upscale bar enthusiasts. Drinks are quite affordable, around 2 USD per beer and 9 USD per cocktail, compared to prices of 7 USD and 14 USD in New York.

Panama's official currency is the U.S. dollar, though it's called the Balboa instead. In recent years, there have been many high-rise apartment projects, and there are plenty of vacant houses for rent at relatively low prices in some parts of the city, like in El Cangrejo in the center, where renting an 85m2 house can cost 2,500 USD per month. Locals say taxis and public transportation in the city are quite affordable.

Bucharest, Romania

Once dubbed the “Little Paris,” Romania's capital was influenced by French architecture and grand boulevards. Many historic buildings were damaged after the communist regime took power after World War II, but efforts have been made in recent decades for restoration, especially in the central area, where many recently renovated old buildings house crowded cafes and restaurants in the evenings. “However, people in this city are very hospitable and often invite someone they've just met to their homes for a dinner of their expertly prepared favorite dishes, regardless of their income,” says Andreea Francu, a Bucharest native. Additionally, this is also a city with affordable living costs worldwide.

Most locals inhabit high-rise buildings constructed during the communist regime, but “any Bucharest resident's dream is to live in a house with a garden and raise a dog,” says Francu.

The city is more affordable compared to elsewhere in Western or Central Europe: rent is 80% lower than London (around 2,832 lei, 873 USD/month for 85m2), and monthly public transportation costs are more than 90% lower than in London.

Jeddah, Saudi Arabia

Ranked 123rd out of a total of 131 cities.

Many visitors to Jeddah are pilgrimage travelers heading to the holy city of Mecca. However, those who stay longer say the city is budget-friendly – with a unique blend of conservatism and modernity.

Saudi Arabian religious laws reveal much about cultural and social communication: essentially, single men and women are not allowed to sit together, so at restaurants, separate family seating areas are entirely distinct from tables for single men or women. But when the city lights up, you'll see men driving luxury cars around the city center.

“When you visit a Saudi family, you'll be invited for Arabic coffee and dates,” says Lyn Birrell, a migrant from Bicton, Western Australia, and a blogger on Living in Jeddah. Social status is crucial here, so a two-story house is often adorned with crystal chandeliers and gold-plated furniture.
Nevertheless, Jeddah is an affordable city to live in. Gasoline is the cheapest in the world, at 0.50 Rian (0.15 USD per liter) compared to 1.05 USD in New York.

Housing and food are also cheap: Rent for an 85m2 house is 3797 Rian (1,012 USD), and a loaf of bread costs 2.24 Rian (0.60 USD). However, vegetables are not as readily available as in other cities. One advantage is that travelers can take advantage of low-cost flights to nearby destinations: round-trip airfares to cities like Dubai and Cairo can be less than 1,200 Rian (300 USD).

And those are the 5 affordable cities in the top 10 of The Economist's 2014 Cost of Living Index. The other cities in the top 10 are Karachi, New Delhi, Damascus, Algiers, and Riyadh.

According to BizLive

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Reference: Mytour Travel Guide