What the…?! Outrageous Prices Abroad

This article was published in the Escape Artist Weekly Newsletter on August 07, 2018. If you would like to subscribe to the newsletter, please click here.

Life abroad is not always less expensive. Many times, in articles about living overseas, the writer will focus on the lower cost of living in that specific country.

Fresh fruit smoothies for only $2!  

Monthly rent for a beachfront condo is only $600!

Local chicken tacos, 3 for $1!

It is not often that they share the prices of goods and items that are more expensive.  

I had my first sticker shock when living in Seville, Spain, in 2010. It was my first time living abroad and, at that time, the conversion of EUR from USD wasn’t great – about 1 to $0.70 USD. Being on a very limited budget, I became hyper-aware of the fact that the price tags represented euros… NOT dollars! 1 EUR did NOT mean $1 USD.   

At the grocery store, I would mentally convert all EUR prices to USD so I knew what would be left in my bank account at the end of the shopping trip. As many of you know, peanut butter is among my favorite foods and has been for years. On one of my first grocery shopping trips to Corte Inglés, I picked up a jar of Skippy’s. However, I immediately set it back on the shelf after seeing it marked at 6. At that time, it was converting to about $8 USD, which was about 1/5 of my weekly budget for groceries. The same jar cost $2.99 USD in the local grocery store back in NY, and I just couldn’t convince myself to buy it. Instead, I spent the following months living off of delicious local tapas and tasty (and very inexpensive!) wine.

So, what’s the reason for these price variations? Why did Skippy’s cost almost 3x the amount when the Spanish wine cost 3x less than what I was used to?

Prices depend entirely on what is produced in the country vs. what is imported, and also on what the country’s tax rates look like. If the item is imported, there are usually import duties and local value-added tax. In some cases, additional fees are levied. For example, in Belize, there is an additional 2% environmental tax levied on all imported goods.

Think about why “Duty-Free” shopping is so popular at international airports… because you’re not paying the import and VAT tax on the goods, so in theory it should be more affordable.

The United States Council for International Business put together this comprehensive list of import and value-added tax in over 100+ countries. This is worth looking at if you ever plan to import or export any goods to another country. (Moving abroad and taking items with you? Look at this!)

The 2nd time I had sticker shock was while in Singapore with my sister. Prior to going, I had heard that the country was very well-manicured and clean, home to some of the biggest banking institutions in the world and generally expensive. “Expensive” is a relative term, so my sister and I were not sure what to expect.

What the...?! Outrageous Prices AbroadSingapore skyline from an afternoon coffee break with our local friend.

We grabbed a cab to our friend’s house and, being curious about real estate, I started to ask him about prices of the properties we were passing. When he pointed out the government housing and mentioned that the little apartments started around SGD $500,000, he caught my attention. The prices shocked me, but we kept the conversation going. He started to tell me about the cost of cars. Can you guess what a new, standard Toyota Corolla would set you back?

About SGD $100,000 (~$73,000 USD).   

Do you know about how much the same car in the United States would cost you?

About $19,000 USD.

What the...?! Outrageous Prices AbroadToyota Corolla.

So, what was the difference?

The taxi driver explained that the cost was so expensive because of all of the fees levied on the cars, which are driven by demand and country taxes.  

A few taxes he mentioned include:

  • Import Duty: standard 20%
  • General Sales Tax (GST): 7%
  • Registration Fee: anywhere between 100-180% of the market value
  • The Certificate of Entitlement (COE): currently between SGD $40,000-50,000
    • “The COE is a ‘market-driven’ certificate that allows a car to be driven on a Singapore road for 10 years. COE prices can increase steeply during a period of high car demand, which in turn cause prices of cars to increase.”

Through all of these fees, plus the profit margin from the dealership, of course, the cost of a $19,000 Corolla (in the States) was about SGD $100,000 in Singapore. Wow!

My latest sticker shock was just a couple of months ago, while in Ambergris Caye, Belize. While I have adjusted to the local cuisine quite nicely (yes, there are awesome prices on tacos and the 3-for-$1 BZD example I gave is real!), sometimes the craving for foods from the States is undeniable!

Let’s take a step back. I was in the States when the La Croix (flavored sparkling seltzer) craze started to really take off about 5-6 years ago. A box of 12 refreshingly, no-cal beverages would cost $3.99 USD, so my sister and I would stock up on various flavors each time we went grocery shopping. Slowly but surely, I got hooked.

What the...?! Outrageous Prices AbroadJust arrived in Belize!

Just the other day, upon entering my neighborhood grocery store in Belize, for the first time ever I saw stacks of boxes of different flavored La Croix and excitedly texted a picture off to my sister. Finally, I thought to myself, an alternative to all of the sugary drinks here.

I picked up a box of 12 and headed to the cash register. As the cashier finished ringing me up, I pulled out my $20 BZD and gazed at the total on the register. Like a deer in headlights, my eyes widened. WHAT!? The number on the screen couldn’t be right.  

“Is it really $48 BZD ($24 USD)?!” I asked, bewilderedly. “Yes,” he responded, “but since you’re a frequent customer, we can give it to you for $45 BZD.” You have got to be kidding me.

So, I slowly retreated back to the stacks to put the box back. I opted for a single can from the fridge instead.

The examples above were just a few of the more extreme cases I have experienced, but I have learned the lesson. Whenever purchasing an imported item, expect for it to cost more than you are used to. If you are purchasing something locally, expect the price to be better than at your grocery store at home (most of the time!).  

But the positive news is that with flexibility and a bit of searching, you’ll find great alternatives to what you’re used to. For example, in Singapore, because the price of cars is outrageous, the public transportation is efficient and quick. In Spain, despite not eating much peanut butter, their tapas and local cuisine are incredibly delicious. And in Belize, well, local beer is cheaper than La Croix. Priorities, I suppose!

What the...?! Outrageous Prices AbroadInside Esperanza’s, my favorite local fruit vendor on Ambergris. Her prices are very competitive with others.

To end off on a positive note, below are a few big-ticket items that I found to be LESS EXPENSIVE outside of the United States:

  1. High-quality health and dental care in Latin America. Countries including Costa Rica and Panama are home to JCI Accredited Hospitals (meaning they meet international standards and regulations). Popular for medical tourism, the medical procedures at these hospitals are a fraction of what they would cost in the U.S., even without insurance abroad.
  2. Delicious wines by the bottle in many European countries! In Portugal, expect to pay between 6-8 a bottle while out at a casual dinner for an incredible quality wine.
  3. Custom-made, wooden furniture in Belize is more affordable than shopping in the city’s furniture stores. It’s true. Print a picture of a wooden item you like, and you can find a woodworker to custom-build it for you for a fraction of the price. With hard, quality wood easily available in the country and incredibly skilled workers, all you need is an idea of what you’re looking for and you’ll be able to find it.

What the...?! Outrageous Prices AbroadMy sister eating a full meal, Pad Thai, in Bangkok in a local dive restaurant for about 30 baht ($0.90 cents USD).

This article was published in the Escape Artist Weekly Newsletter on August 07, 2018. If you would like to subscribe to the newsletter, please click here.