How a Cost–Benefit Analysis Can Influence Where You Relocate



How a Cost–Benefit Analysis Can Influence Where You Relocate

A crucial factor in determining where you will relocate to is the budget available, but it is far from the only factor you should take into consideration for such a life-changing decision. If you are going to make a success of your move, it is essential to seek the advice of other expats and evaluate the impact that the move will have on your day to day life.

Whilst most of us will determine our location based on a job role or the business needs that are driving us abroad, the lifestyle that you can expect upon arrival will also be a huge factor in whether or not to go ahead with one of the biggest decisions you will ever make.

Making the move will attract costs, but provided you take the time to weigh these up against the benefits of moving, you’ll often find that moving abroad and taking your family with you could be one of the best choices you ever make.

What should you consider?



Unless you have guaranteed accommodation as a benefit with your company, you should consider how much of your savings or initial salary will be taken up by the cost of accommodation. The cost of your new home is likely to have a significant impact on the money available for short- and long-term savings and investments. This alone makes accommodation one of the more important factors in your relocation decision.

We’ve found that for many expats in desirable locations like New York and Hong Kong, accommodation takes up nearly 50% of their post-tax earnings. If you combine this with the fact that many local agents will require foreigners to pay 6–12 months’ rent in advance, you could be facing considerable expenditure before you even get started with the moving costs.

New York Auckland Cape Town Hong Kong
48.4% 33.1% 36.8% 48.7%


Salary and Relocation Packages

In the majority of cases, attractive salary and benefits packages are offered to key employees that will help you through a costly moving period. With this in mind, we’d recommend reviewing the contract and any assistance on offer alongside the financial gain (after taxes) that you should be able to command as part of the move.

A relocation package may also simplify the process of moving considerably. Make sure that you are clear on what the package involves and negotiate on issues such as any housing allowance and, where appropriate, other benefits such as school fees, health insurance and visits back home, which are commonly covered under these contracts.

Salary offers will invariably be affected by the country to which you are moving and so it is important to understand the local economy. A lower salary may not necessarily mean a lower standard of living. Taxation is also an issue; make sure that you are aware of likely deductions.

The astounding popularity of certain destinations for expats can have a disproportionate impact on costs and this is often down to supply and demand mechanics. With popular examples including New York, Auckland, Cape Town and Hong Kong. This popularity is a reflection of the fantastic lifestyles and opportunities on offer in these countries and we believe that these factors should always be considered when an expat has a degree of choice about where in the world they would like to relocate to.

The expense of such places isn’t always an indication of the quality of life you can expect, but it often is, simply due to supply and demand.


Living Expenses

Living costs for you and your family can have a significant effect on your disposable income. However, it isn’t simply a matter of what your everyday essentials will cost; you also need to take into account their availability in the country that you are relocating to.

Many expats favour familiar imported foods when overseas and these will almost invariably be expensive. Adapting to local dishes and products may result in savings, but all too often the temptation is to eat out and socialise, which increases spending over time. The cost of imported alcohol is a further issue for some expats in certain locations. The lifestyle that you want for you and your family is going to have a significant impact on the costs and benefits of your new life.

You will have an unprecedented opportunity to engulf yourself in a new culture and cuisine, but is that what you and your family want at this stage in your lives?

Some miscellaneous outgoings such as dry cleaning and publications may appear trivial but expats find themselves paying more than they are used to for these services and items. Similarly, personal care products such as cosmetics and toiletries may be more expensive if you are buying familiar brands rather than local products.

Depending on your location and your requirements, you may need to factor in transport and commuting costs for both you and your family. This can mean a commute to work and season ticket costs, or the cost of purchasing, insuring, fuelling and maintaining a vehicle.


Making Your Choice

Before you finalise your choice, you should ideally have visited your planned location on more than one occasion. Where this has not been possible, you may be able to obtain informed advice from friends and certainly from relocation professionals, who will have an up-to-date insight into the above factors, in addition to a broad legal, immigration and regulatory background.

It is important to consider the lifestyle changes for everyone in your family and to bear in mind that some elements will be intangible, such as the experience of living in a new culture. Meanwhile, financial decisions may call for an assessment of the cost of relocating to an inner-city location as opposed to the suburbs. The relative importance of each of these factors should be weighed up carefully and this will lead you to a decision that ensures your future financially, provides an exciting new chapter in your lives and gives your family the best chance of happiness for the coming years.

Trudi Hayes

The Author

Trudi Hayes

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