What income do you need?

This question is almost impossible to answer because everyone lives in a different way and has different priorities in life. If your lifestyle demands that you eat fillet steak and drink French wine on a regular basis, eat out virtually all the time and have a wild social life it could be could be quite – or even very – expensive to live on the Costa del Sol. If, however, you like to live more simply, life could be remarkably inexpensive.

The first important factor income-wise, is your debt liability. If you have no mortgage, no credit card debts and no hire purchase agreements you will be surprised how little you need to live comfortably. We know people here who live on a basic UK state pension and live well, even if their lives are not luxurious. Those with a basic pension plus a top-up occupational pension live very well indeed. For a couple with no children to worry about, no debts and no mortgage, I would estimate that if you have £10,000 a year income you could live well so long as you are not extravagant. With £15,000 you will live very well and, above that figure, you will have a very comfortable lifestyle especially if you are over retirement age and qualify for state healthcare. After all, the official, absolute basic wage in Spain is not much more than £300 per month and this is considered to be enough to live on! Check out Appendix 1, which lists our annual expenditure. We enjoy a very comfortable lifestyle.

The cost of living for a family

For a younger family, things will be different. If you work in Spain and pay Spanish social security you will qualify for state healthcare, but if your circumstances are different you may need top-up private healthcare. Similarly, if you are happy for your children to go to state schools in Spain you will not have to pay for private education, which although cheaper than the UK is still a cost. A family will also need to have a bigger car and possibly a bigger house and all this will affect overall financial needs but, ultimately, I would have to say that the cost of living is considerably lower than it is in most parts of the UK. On this basis if your earning potential is equal to that you would have in the UK you will live much more comfortably.

Plan ahead

Before taking the plunge, and moving your family to Spain you must sit down and work out how you propose to live here, what lifestyle you would like to have and, based on the information in this book and other sources of information, work out what income you might need to live on. Add a bit more for unforeseen expenses and then decide whether or not you can afford to make the move. Do this before you move and you will have no unpleasant surprises. Move on a whim, without working out your personal finances, and the results could be catastrophic for your family.

It is a big enough change to move country – if you then end up with financial worries on top of the move your life could be difficult. So many have moved in the past without making these calculations and have lived to regret it. We know people who have used up virtually all their life savings because they did not do their homework. You also need to work out how you will finance any debts you might have. If the debts are in sterling and the pound loses value against the Euro, your debt will be higher. Can you cope with this?

Appendix 1 includes a chart that shows our expenditure as two adults, with a separate column into which you can put your estimate of your own family needs. I have also included representative supermarket food costs averaged between the SE of the UK and from Devon and have compared these to the cost of similar items in Spain.