Well, not really an old thread but could do with updating.
For those of you coming to live in Spain, one big point needs clearing up. That folding paper you get from Tesco or Thomas Cook or wherever is actually money. That is, real money. It is no longer the holiday tokens you brought over with you that didn't seem to matter much as it was really just bits of paper that you exchanged for beer, or coffee, or a taxi ride or whatever, It is now the real stuff and the amount you have depends on what you earn, not what you can afford to chuck away on fripperies. It now pays for your electricity, your taxes, your household items and, most importantly, the food you put on the table. Now we have that out of the way, I will continue.
Prices have risen in Spain. There are no two ways about it. Inflation in Spain (less food) is running at 3.1%. Food is a little less at just under 2%. UK food inflation is now 4.9% and a short trip to UK will show just how much prices are rising. However, this is about Spain. To those from the UK, it appears that prices in Spain are rising by the day. Apart from petrol (which is rising by the day) they aren't. It's just that the pound, into which we automatically convert that funny money, is collapsing. Some will remember getting as much as 1 euro and 60 cents for each pound, most will remember at around 1.40 or so. Nowadays, taking into consideration the commission, tourist rates etc, you are better off just calling it 1 for 1. Yes, it changes dramatically by the day but looking at it as1 for 1 is realistic, above that you are on a bonus! So, that cup of coffee which you got for 75 cents and was about 50p is now a euro or (as near as dammit) a quid. The price in Spain has risen by 12.5% but, for us, it has gone up 50% (all down to exchange rates, you see). Same with that loaf of bread, the pack of eggs, the ham sandwich etc. A meal in a Chinese restaurant costing 8 euros (a pretty substantial Chinese meal for that) 3 years ago is still 8 euros. For those living in Spain, the rate of inflation is zero. For those visiting, the cost has now gone up from £5.70 to almost £8 or around 28%. It doesn't mean inflation is Spain (for Chinese restaurants) is 28%, it means you're getting 28% less for your pound (ish ish figures, by the way). A tub of Flora Oliva was, three years ago (which is when I moved into my house, by the way, hence quoting 3 years ago) was €1.45. Just last week, the same tub (well, not the same tub but a similar one) was also €1.45. In pounds, it was about a pound but now around £1.40 or a staggering 40% increase. But it's not. It hasn't gone up at all.
So, where does all that leave us? Interestingly, in today's Daily Telegraph, there is a link to the cost of food in 13 different countries for those on self-catering and Spain comes out as the cheapest! For a basket of food containing 16 items like bread, milk, eggs and other staples, it came to £44.23 with Portugal second at £44,36 and the Costa Blanca at £47.28. The UK was 10th on the list at £63.63 for the same items. Now, just imagine if the pound hadn't crashed. It would still be £63.63 in UK but, if we were to convert it at the 1.40 to the pound, it would only be a litte over £32, or half the price of UK.
(Interestingly, a separate survey compared prices for those staying in hotels as tourists and compared 13 things like a can of coke in a bar, sun cream, an ice cream etc and came up with £39 in Spain and over £60 in UK.)
However, man does not live by bread alone. Petrol in Spain, usually well below the price in UK, is rapidly catching up with only about 2 or 3 cents a litre the difference (petrol, not diesel which remains a lot cheaper in Spain due to the tax system). Electricity prices in Spain are now about 2 cents per kw/h dearer than they are in UK so watch the amount of time the air conditioner is kept on. Water prices in Spain have risen quite sharply but are still at about half the cost of UK. Electrical goods like computers and TVs are actually reducing in Spain (as they are in UK) and you can get these cheaper in Spain than UK if you shop around. Other white goods, like refrigeration and laundry, are still extremely high in Spain and would be even if the pound hadn't gone down so much. Smaller items (just as an example - albeit a silly one) like a wooden spoon which you can pick up for 2 for 79p in Wilkos will cost almost 2 euros in Spain. Proper furniture in UK is much cheaper than Spain although you do have IKEA which are similar in prices (if only those beds weren't so low - I can't even get down on one let alone get up again).
Back to the plus side, taxes are lower in Spain. My MPV in UK has a road tax of £230 in UK but only €87 in Spain. Smaller cars are even cheaper. Council taxes in Spain for the year are about one monthly payment in UK but beware of the community charges which vary greatly. They could push the prices up a lot even though you do get pool maintenance and garden care included in the prices.
Like most Brits, we tend to opt for the brands of toiletries and things that we know. However, Spain has lots of alternatives which are much cheaper. For example, SWMBO tends to get a bit of dry skin in the sun. She has used L'Oreal (because she's worth it) moisturiser which sells at around £7.50 in UK but a staggering €12 in Spain (remember, that's almost 12 quid!). Having a tube of 250 ml confiscated at the airport coming out, she had to buy something different and came across Crema Hidrante con Aloe Vera in Mercadona at 2 euros a tube. She reckons it is far superior and only has to use it once a week instead of daily with the L'Oreal stuff. Having a mouth ulcer, she went to the chemist for Bonjela (over 5 euros) and was recommended a Spanish brand at 2 euros which, again, proved much better. Same with shampoo. Ignore the top (international) brands in the supermarkets and chemists and go for a Spanish alternative. Probably exactly the same stuff but at less than half the price. (Unfortunately, I haven't yet found cheaper razor blades and they are about the same extortionate price they are in UK). The Daily Telegraph article I mentioned above says that a similar survey they did last year showed Spain with the lowest prices in Europe for toiletries and related articles. I would like to see that one!
What are expensive in Spain are things like paracetamol and cough medicines. Chemist own brands in UK are in the pennies but in the euros in Spain so try and stock up on those if you use them a lot. Small electric items such as kettles, coffee makers, toasters and so on are more expensive in Spain but possibly because they only sell the expensive branded ones. No cheap Argos own brand over here, I'm afraid, unless you visit one of those Brit stalls on the market which only add 50% to the price!
Buses (if you can get them) are extremely cheap in Spain but, conversely, taxis aren't.
There is no TV licence to pay for in Spain (£12.37 a month in UK) but many expats get a rebroadcast TV service which costs around €20 a month. As Sky in UK now costs £44 a month (with no movie channels but including Sport) it's not too bad. However, there is a very good digital TV system in Spain which (depending on where you live) will give you around 60 channels of which around a dozen or so allow you to change the audio to English if it was in English in the first place (mainly American like CSI, NCIS, Cold Case, Dexter, Friends, Castle etc but one channel actually shows Dr Who) and there are several kids channels like Clan, Boing and Disney which lets you use the dual language facility. And they are free with no dish being required. If you want a dish put up (to get the UK freesat stuff) it will cost a lot of money (1,000 euros ish) to get them.
If you lived in a city in UK, you will have been used to paying a relatively low price for your telephone and broadband. If, however, you lived in an area with no competition you will be used to paying what they charge in Spain for these things. 50 odd euros plus a mont is not uncommon (in UK I was paying £160 a quarter for these whereas my brother, living in a city, was getting the same thing for less than £100 a quarter). So shop around.
Eating out, like in UK, can be both cheap and expensive. You don't have the chains like Harvester etc in Spain so you will now be paying more for your Sunday roast in Spain than you would in UK. However, prices aren't as high in Spain as some people would have you believe. Those who continue to say they wish they still had the cheap fish and chips like in UK are, I'm afraid, living in the past. 2 steak pies and a small portion of chips cost me £5.85 in our local chippy last month. You will still get people telling you they get double fish and chips in UK for 3 quid but that is more wishful thinking. A Chinese meal for two (including a bottle of wine) was £32 in UK last month at a not really spectacular venue. Virtually the same meal (with wine) cost me €13 at my local Chinese in Quesada. Not being a fan of the MDD at lunchtime (still can't get used to eating a lot until about 7 or 8 at night) I can't really comment but some of the deals seem pretty good for a 3 course meal.
Anyway, I still reckon it is cheaper for day to day living in Spain. After all, we don't buy a new fridge or washing machine every month. Or a new armchair or bed, come to that. We avoid the English brands and, once you have found the Spanish equivalent, find them much better. The Knorr stockpots, for example, which in UK are £1.25 for two are only €1 for 4 in our local Consum (the stuff you use instead of OXO). Bread, apart from those long barras, is quite expensive in Spain and I'm not talking of frozen Kingsmill etc which I see many buying. So stick to the barras! (Anyway, a loaf of Hovis in UK is now £1.45 so that's not exactly cheap either.) The barras are much tastier, anyway. Avoid Campbells cream of tomato soup and Heinz baked beans, avoid corned beef (the Brit stuff is terrible, anyway) and "British style" pies (make your own if you're that desperate). We (occasionally) visit an Iceland store but only for things like frozen peas (the Spanish ones are terrible) and the odd cheesecake from the £1 range (now at €1.65) and would definitely not make a habit of going there
Shop around, the weather at this time of year will mean you will probably not want to eat so much, anyway. Use the local markets as much as possible (they are fun to walk around, as well) and use tapas bars called Rodrigos or La Casita etc instead of ones called The Red Lion or Paddy's Bar or whatever. The beer and wine will also be a lot cheaper.