Cost of living will increase faster in Frankfurt
As Frankfurt is the financial capital of Germany, it has enjoyed quite a robust economy over the years. After the UK announced it wanted to leave the European Union, many banks and other companies announced they were moving their post Brexit operations to Frankfurt. This means the cost of living has increased and will likely increase faster than the rest of Germany going forward. Keep this in mind when planning a move to this city long term. Salaries are generally lower in Frankfurt and Germany as a whole in comparison to the other Financial hubs of the world. However, Germany enjoys a fantastic healthcare system, free education, and an array of other social benefits that offset the costs you’d have to bear in other countries (like America). Nevertheless, as you’ll read in this post, the costs in Frankfurt are generally quite low in comparison to other financial hubs. That’s why I will say this straight up: Frankfurt has the best income to expense ratio in the entire European Union. Yes I said it. Feel free to debate me on this matter!
Taxation in GermanyTaxes in Germany are one of the highest in the world. The first €9,169 (or €18,338 for married couples submitting a combined return) earned each year is tax free. Any amount after that is subject to income tax. Income tax in Germany is progressive: first, income tax rates start at 14%, then they rise incrementally to 42%; last, very high income levels are taxed at 45%. The top tax rate of 42% applies to taxable income above €55,961. Finally, for taxable income above €265,327, a 45% tax is applicable. These rates go down significantly if you’re married and a single earner. You would move from Tax Class I to Tax class III which significantly reduces your tax obligations. However, in this tax rate is income tax and social contributions. This means contributions to your state pension, health insurance, unemployment insurance, and disability insurance. I’m only familiar with South African and the United States and most of these things are paid as separate items in addition to the income taxes paid. In reality, the pure income tax portion of the German tax code is not as high as it appears.
Inflation in GermanyCompared to living in South Africa, the inflation rate in Germany is much lower than most of the world. Inflation is somewhere between 1% and 2% over the past decade and will likely not increase more than this. Of course, living in the big cities like Frankfurt, Berlin, Munich, Hamburg, Cologne etc. you can expect inflation to be higher just because the cost of rent always increases. I don’t worry about inflation in Germany like I would living in a developed country. Also, interest rates are 0% so don’t expect to receive any money from your bank accounts here. And now, onto the actual costs of living in Frankfurt! Keep in mind that the following figures for cost of living is for one person. If you are a couple, it should be just shy of double the price. I am living with a significant other in my apartment but for simplicity sake, I am focusing on describing costs for one person as I am fully aware of how much I spend. Also, this post largely focuses on my fixed costs per month. Of course if I’m taking a trip to Malta for the weekend, these are variable costs that I do not include in this analysis.
Rent Costs In Frankfurt – €950
Without a doubt, rent will make up the majority of your monthly expenses. Just like every major city in the world. everyone in Frankfurt complains about the rising costs of rent. It’s not super cheap to live here. If you are looking for a 1 bedroom apartment in the city center, you’re looking at €1,000 a month or more (this does not include electricity either). Competition for these types of units are extremely high as there’s a housing shortage. If you’re looking for 2 bedrooms, then you’ll need to spend roughly €1,500-2,000. In general, I think apartments in the Frankfurt city center neighborhoods average about €15-€20 per square meter and progressively cheaper as you get further away from the Innenstadt. To better understand Frankfurt’s neighborhoods, make sure to read my Frankfurt neighborhood guide. We are paying about €1900 a month for an amazing two bedroom Altbau and this is the “warm” rent which is inclusive of utilities including electricity in our case. Normally, I’ve found that the warm rent does not include electricity but for us, it does. I am living with my significant other so we were able to get a very nice apartment and split the costs down the middle. Coming from New York, rent in Frankfurt is actually quite a bargain. The apartments are actually much nicer too for what you get and the price is half or even one third the price of living in Manhattan. For me, the rent is not as big of a burden in relation to your salary as in other major cities. If you’re looking for furnished apartments, the choices are slimmer in Frankfurt than other big financial cities as most apartments are rented unfurnished. However, the apartments do exist and you can expect to pay 10-20% more on average. Note that many apartments in Germany don’t include a furnished kitchen, washer/dryer units, or built in closets. Yes, you’ll need to bring your own fridge, sink, dishwasher etc! This means depending on the apartment you get, you’ll be looking at more upfront costs to buy appliances you’d normally expect to be included in the apartment. Alternatively, if you’re one person, you can elect to live in a WG or a flat share with roommates and you can find some very nice apartments for €600 or less. I’ve come to learn that while Germany is a capitalist country through and through, the degree of capitalism compared to the United States is mild at best. As far as rent goes, landlords here do not try and milk every last Euro from their tenants. Rent increases are generally quite mild and landlords can’t just raise it to whatever they want.
Car and Car Insurance – €0
A lot of people wonder if a car is necessary in Germany. I will say it here loud and clear. If you’re living and working in Frankfurt City, and do not have family you need to visit regularly in Germany, there is no reason to own a car in Frankfurt. The public transportation is absolutely fantastic and will get you anywhere reliably and fast. Frankfurt is also a tiny city and a bike is really all you’ll need to get where you want to go. Any Germans reading this and disagree with me, please move to New York City for a few years and get back to me! car insurance and converting your drivers license.
Transportation in Frankfurt – €40
Public transportation is absolutely fantastic in Frankfurt. I’ve really enjoyed taking the U-Bahn, S-Bahn, and Trams in this city. It is reliable, clean, and comfortable. The S-Bahn to the airport is especially a treat and perhaps one of my favorite things about Frankfurt (the airport is 15 minutes away). However, my current apartment is only about 25 minutes walking to my work so while I could take the U-Bahn 3 stops, I choose to bike or walk to work. I currently pay €15 a month for bike-sharing with Wind Byke. It is not always the most reliable but gets me largely where I want to go. Then I will add another €25 or so for my S-Bahn costs when I go to the airport for about €40 a month. If you are living somewhere where you’ll need to take the U-Bahn or tram regularly, it is roughly €90 a month for an unlimited pass. Update 08/2019: I’ve since switched out my Windbyke membership for a bike with Swapfiets. They are a monthly bike subscription service where you get your own personal bike to use as you please. The bikes are much better than Wind or DB Call-a-bike in my opinion and the price is about the same as wind (€17.50 a month). Therefore, my transportation costs still stay the same as before.
Gym – €60 per month
I need to have a good gym wherever I am living. Frankfurt thankfully has a plethora of high quality and affordable gym options. I’ve written in detail about the gyms/fitness club options in Frankfurt and in the end, I ended up choosing Fit Seven Eleven. I pay €50 a month and another €60 a year for maintenance fees (which is questionable but it is common in Germany). The €50 is my corporate discount and it is €80 normally. There are many other gym options in Frankfurt including Fitness First, Primetime, and Elements that are even nicer but costs a tad more.
Mobile Service – €25 per month
In addition to home internet, cell phones are very affordable in Germany. The four main providers are Telekom, Vodafone, O2, and 1und1 and each offer plans in different price ranges. Telekom is the most comprehensive and most expensive with O2 normally being the cheapest. There are also lots of contractors that advertise service under their name but they just subcontract spectrum on one of the main providers. There are countless choices but generally, you can expect to pay about €20-30 a month for unlimited or near unlimited data. If you are able to live your life on largely wifi without using much data, I’ve seen 3GB data packages with unlimited calling/texts for under €10. However, in this day and age, I can hardly keep my usage below 10gb a month! Note that there is are MANY different options for cellular service plans in Germany. The amount of vendors can be overwhelming actually. Depending on what your data habits are, I’d look to spend no more than €50 a month if you’re going for unlimited data plans.
Electricity – €80
Electricity is normally not included as part of the warm rent (Gesamtmiete) in Germany from my experience. You need to register with a provider yourself and pay the monthly bill. However, the apartment I’m renting just happens to have everything included in the Nebenkosten (extra costs, or the difference between the warm rent and cold rent). Electricity of course varies wildly depending on your usage but I think something like €0.5-€1 is a reasonable amount to budget for costs per month.
Wifi/TV – €50
I have not had a cable subscription since 2012 because I find it pointless in today’s age of HBO, Netflix, Amazon Video etc. Also, living in Germany what the hell would I even watch on German cable television? I couldn’t understand anything. So knowing that, I only subscribe to an internet plan. Internet is quite cheap in Germany. You can get unlimited 100 mbps plans from 1und1, Vodafone, Telekom etc. for about €30 or so. There is also a separate fee that every household in Germany must pay if you are planning on having any sort of cable TV or internet subscription called the Rundfunkbeitrag. I’m not sure what or why it exists but it is the rule. This is €18 per household every month. There is no getting around it. If you want internet, you need to pay this on top of whatever the internet costs.
Food/Entertainment – €1,000
This is definitely the largest expense after rent. I’m not a fan of cooking because there’s just not enough time in the day and grocery stores are completely closed on Sundays in Germany! I largely pick food up and enjoy eating out. Eating out in Frankfurt is quite affordable given what the salaries are. There are loads of restaurants serving all different types of food at all price ranges. I will admit this number is quite high, especially for German standards. People would be shocked if I told them how much I spend on eating out but I guess it is just something I’m okay with because I just can’t be bothered cooking every day. Food and alcohol prices are very reasonable in Frankfurt with respect to salaries and other costs. Alcohol especially is affordable at restaurants. A glass of beer is €3-4 and a glass of house wine is €4-5. Food prices are also quite reasonable and you can expect to pay €10-20 for a main dish at a solid restaurant. More casual places without waiter service like one of the hundred Thai/Vietnamese restaurants in the city, you can expect to pay under €10 for delicious food. There are many grocery stores in Frankfurt with the biggest being Rewe and Aldi. Prices are pretty normal I think although I’ve not done much grocery shopping. Most German’s probably spend considerably less than the €1,000-1,250 that I spend on food and entertainment by buying groceries so you could probably half my number if necessary.
Adding It All Up – Frankfurt Cost of living
Rent and Electricity: €950 Car: €0 Gym: €60 Internet: €50 / 2 = €25 Cellphone: €25 Transportation” €40 Food/Entertainment: €1,000 – €1,250
= €2,100 – €2,350 per month for all regular expenses Obviously there are just random things every month you end up paying for but this about sums up the must pay expenses of my life in Germany so far. So what happens to the rest of the money? Life in Germany is pretty good. Costs are reasonable and all the social benefits you need in life are provided as part of your taxes. I have lots of plans to travel the country which is where all my savings will go. The only thing I could ask for is better weather!
What do things cost?
What do most things cost here? Well it’s entirely dependent on where you are and which type of establishments you frequent in Frankfurt. However, here is a very rough idea of what costs you can expect to have in the city.
- Beer: €3-5
- Glass of Wine: €4-6
- Shot of non top shelf liquor: €4-5
- 300g Fillet at steakhouse: €30
- Schnitzel at a German restaurant: €10-15
- Cinema Ticket: €12
- Taxi ride from Airport to the city center: €25
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