Managing your expenses is extremely important when settling into life in a new country. If you're an expat moving to Germany, getting a handle on the cost of living and planning your budget can make settling in so much easier. This guide will provide an in-depth look into typical expenses in Germany, with distinctions between living in Western and Eastern regions of the country.

1. Understanding the Cost of Living in Germany 

The cost of living in Germany can vary significantly depending on whether you reside in cities like Munich (West) or Dresden (East). Generally, living in Western Germany is more expensive due to its larger metropolitan hubs like Frankfurt and Munich. Eastern Germany offers a more affordable alternative, even in cities like Leipzig and Erfurt.

• Western Germany: Higher cost of living, especially in major cities. 

• Eastern Germany: More affordable housing, utilities, and overall expenses. 

Average Monthly Cost of Living (Excluding Rent) 

• Western Germany: €900–€1,200 (single person) 

• Eastern Germany: €700–€1,000 (single person) 

2. Rent Costs 

Rent is likely to be your biggest expense in Germany, and prices differ widely based on location and property type.

• West Germany: Munich is the most expensive city, with rent for a one-bedroom flat in the city centre averaging €1,200–€1,800 per month. Frankfurt and Stuttgart also have high rental costs. 

• East Germany: Rent is significantly lower, with one-bedroom flats ranging between €500–€1,000 in cities like Leipzig or Dresden. 

Consider sharing a flat (WG or "Wohngemeinschaft") to reduce rent costs and utilities.

3. Utilities 

While there is no difference between West and East Germany in terms of costs, with the utility bill being the same in both areas and dependent on your area. East Germany does have a relative 20% higher bill when adjusted for purchasing power and average wage in the area. The average cost of utilities in Germany ranges from. €150-€250. This includes water, heating, gas and your internet provider.

4. Groceries 

Grocery shopping in Germany is fairly affordable, with plenty of low-cost supermarkets like Aldi, Lidl, and Netto. Many expats are surprised by the high-quality fresh produce and large variety of bread available at reasonable prices. Do take note that your grocery spending is heavily dependent on your dietary preferences, needs and location.

• Average Monthly Grocery Cost (single-person household): 

  • €200–€400 across most German cities. 

A breakdown of common grocery prices in Germany:

• Loaf of Bread (500g): €1.50–€2.00 

• Milk (1L): €0.80–€1.30 

• Eggs (12): €3.00–€4.00 

• Chicken (1kg): €8.00–€12.00 

• Beer (0.5L bottle): €0.90-€1.50

• Potatoes (1kg): €1.00-€1.60

5. Cost of Insurance 

Health insurance is mandatory in Germany, with residents choosing between public or private options.

Public insurance costs 14.6% of your gross salary, split between you and your employer. Additional contributions may apply, averaging around 1.7%. If you earn below €73,580 annually (as of 2025), public insurance is your default option.

Private insurance is available if you meet the income threshold or are self-employed. Costs vary based on age, health, and coverage level but can be lower for young, high-earning professionals. However, premiums rise with age, and switching back to public insurance is often difficult.

Expats should check whether their home country agreements allow them to stay on foreign insurance or require German coverage. Understanding these costs is essential when budgeting for life in Germany.

6. Transport 

Germany has an extensive public transport network, with buses, trams, and trains covering cities and regions. The government is considering making public transport free, but for now you can order a "Deutschland Ticket" for €58 per month. Allowing you free use of nearly all public transport in Germany. The only exception being high speed trains between cities.

For drivers, fuel costs around €1.80 per liter, and parking in city centers can be expensive, averaging €2–€4 per hour. Car ownership also comes with taxes, insurance, and maintenance costs.

Expats should consider whether a car is necessary, as public transport is reliable and often more affordable. Especially when you plan on living within a city.

7. Dining & Entertainment 

From dining out to cultural events, your leisure budget depends largely on your lifestyle. Keep in mind these prices can fluctuate between locations in Germany.

• Dining Out:

  • Inexpensive restaurant: €15-€20 per person

  • three-course meal: €40-€60 per person

  • Fast food combo meal: €8-€15

• Theatre & Cinema:

  • Theatre tickets: €68–€139 (varies by city and venue)

  • Cinema ticket: €12-€15 (discounts for students/children)

  • Music concerts: €65-€80

• Street Food & Snacks:

  • Currywurst or döner kebab: €3–€6

8. Saving and Budgeting Tips 

Managing your expenses efficiently can save you money and reduce stress. Here are some budgeting tips tailored for expats in Germany:

1. Compare Rent Options: Consider living in Eastern Germany or opting for a WG to save on housing. 

2. Shop Smart: Use discount stores like Aldi and Lidl for groceries, and explore local farmers' markets for fresh produce at lower prices. 

3. Track Your Spending: Use apps like Wally or YNAB to monitor expenses and stay within your budget. 

4. Take Advantage of Public Transport: Skip buying a car, especially if living in a major city. Public transport is convenient and cost-efficient. 

5. Go Green with Energy: Adopt energy-saving practices to reduce utilities. Small actions, like turning off lights, can add up.
   
   Don't forget to budget for additional costs such as mobile phone plans (€20–€40/month), personal care items, and household supplies. 

Final Thoughts 

Germany’s got a great quality of life, but keeping your finances in check is the secret to making the most of it. Get to know the costs, plan your budget, and you’ll be all set for a comfy expat adventure. Oh, and don’t forget to treat yourself to a pretzel now and then!