Budapest inquiry

Welcome to Expat-blog, Milan.K

For general information pertaining to cost of living in Hungary, i would suggest that you view the Budapest forum and read the discussion "Cost of living in Hungary". It might be useful.

Regards,
Sheetul

I have read all those topics, and much, much more, and found out a lot, but most of those information were more than one or two years old, and I heard that
situation changed a lot lately, because of this crysis, so that's why I posted this topic, I need up  to date information - would 900 euros be enough?

Hi, Milan.K

Hope that you get a response from members living in Hungary soon.

Milan.K wrote:

.... if anyone is in Budapest, would salary of some 900 euros be enough for decent living in Budapest?

Depends on your circumstances and if this is the gross amount before taxes/deductions. If you are married, with kids, then no, it's not enough. If you are single, without a car, simple needs, doing it for adventure, thinking of it for just short term then maybe.

In my opinion, "decent living" could not be achieved with this amount.

Thanks for the answer.

It's net amount. I'm coming alone, without car. No big needs, it's not an adventure move, it's a career move, since the company is pretty big and serious, so, it would probably help me a lot in my future career.  Also, I am promissed to get a raise next year, and I expect it to be more than 100 euros.

So, this would be a career move, and I'm just wondering if I will be able to live with this money without having to borrow money from my parents, for example, in order to survive the month.

Milan.K wrote:

Thanks for the answer.

It's net amount. I'm coming alone, without car. No big needs, it's not an adventure move, it's a career move, since the company is pretty big and serious, so, it would probably help me a lot in my future career.  Also, I am promissed to get a raise next year, and I expect it to be more than 100 euros.

So, this would be a career move, and I'm just wondering if I will be able to live with this money without having to borrow money from my parents, for example, in order to survive the month.

If you have a small single room (plus bathroom etc) apartment (something like a student place), maybe it'll cost you EUR 250-300 per month probably. This leaves you EUR 600 for the rest. 600 EUR is only 20 EUR per day - 30 days per month. A McDonalds costs about 4 EUR. So, 20 EUR/day is not a great deal for a very high standard of living. The cost of food and goods is the same as anywhere else in Europe - it's certainly not cheaper here.  If you share a house/apartment, then you could probably push the cost down considerably.

Be careful about employers here in Hungary. Make sure you have a proper contract, and make sure they will actually pay you (not commission based). There are quite a few call centre type jobs being offered in Budapest for companies that have very bad reputations.

I dont like McDonalds, or any other fast food, and there  is a cantene at work, so I would probably spend less on the food.

Job is in IT,  programmer. As I said, companyvis pretty serious, so I don't have doubts about them. Only in  the starting salary.

Milan.K wrote:

I dont like McDonalds, or any other fast food, and there  is a cantene at work, so I would probably spend less on the food...

I was only describing McDonalds because it's often used (originally non-seriously but gaining in acceptance) as a common measure of PPP (Purchasing Power Parity) and currency valuations for different economies around the world.

The Economist newspaper publishes a Big Mac Index. According to a couple of web sites I looked at just now (without overdoing any analysis), Hungary ranks #19 at USD 2.71 whereas Serbia ranks #44 at USD 2.08 for a Big Mac.

In other words, all things being equal it's about 25% cheaper in Serbia than Hungary.

Be thankful you are not going to Iceland (it was > USD 6 for a Big Mac). However, Iceland no longer has any McDonalds outlets since the economic crisis there - they all shut down. Maybe it's lucky for them!

Hi,

With the fluctuations in exchange rates, and the prospect of the Forint going down the drain, make sure your pay is denominated in EUR :-)

BTW this is an entry level IT professional salary in Hungary, but most IT jobs require fluency in Hungarian.

You probably won't be able to save too much, but you won't starve or live in a bad neighborhood either. Most people make less than that, most of your peers and colleagues in IT will be making more than that.

Are you guys kidding? 900 Euros (today's rate) is roughly about 240.000+ forint. I think a single person with simple needs can do just fine from that money. That amount is almost double or more of what the natives make.

Lilly76 wrote:

Are you guys kidding? 900 Euros (today's rate) is roughly about 240.000+ forint. I think a single person with simple needs can do just fine from that money. That amount is almost double or more of what the natives make.

No, we're not kidding. It depends what kind of life one wants to lead. Compared to Western Europe (UK, Germany, Netherlands etc), it's not a great deal of money. Prices here are the same as anywhere else in the EC. Entry level IT graduates in the UK for example (if they can get a job) earn more than that.

And of course expatriates always have higher overheads (e.g. travel) and end up paying extra for things due to lack of local knowledge (language, accessibility) etc.

As per a previous post, that is an entry level IT programmer salary. And relative to many other professions, IT jobs pay well here.  If that amount is net you can certainly live on it, you won't be rich but it'll be alright.  If you are not entry level, you can probably get more.

There are IT companies whose business languages are English and a number of those are hiring (I work for one). If that can be of interest, contact me and I can give you details.

Hi Guys, thanks for the answers!

At the end, I decided to accept the offer, but then I found out that my salary would be tied to forints, not euros, and that scared me away. I did some research on the internet, and decided that I shouldn't accept that. If there was no contract for two years, than it wouldn't be a problem, but this way.. forint has been going up and down lately, and economists are predicting hard time for Hugarian economy next year, so it's too risky for me.
I have practically the same salary here, in Serbia, and it's tied to euro, so it would be stupid of me to accept this offer, under this conditions.
Now I'm hoping that they might agree on that, but, ... we'll see.

Milan.K wrote:

Hi Guys, thanks for the answers!

At the end, I decided to accept the offer, but then I found out that my salary would be tied to forints, not euros, and that scared me away...

It's not so bad if you live in Hungary and do not need to buy imported goods or pay for goods in foreign currency (unlikely for expats). Any expat in Hungary is faced with the that problem on a regular basis as many goods are imported. One could consider going to say, UK, Germany, Netherlands or somewhere like that where salaries are higher.

I'm ok with receiving salary in forints, but I want it to be defined in euros.

I'm looking at it from Serbian point of view - all prices will follow whatever happens with forint <-> euro, apartment prices also, so, I could end up with much smaller REAL salary than what I had in the begining.
Eg, I start with 247500 forints(900 euros * 275), forint goes to, let's say, 300, that means that I now have 247500/300 = 825 euros salary. And if my apartment is fixed in euros, let's say 300, than I'm in a problem, I have 75 euros less. Similar will happen with prices - they can go up, but my salary stays the same.

I don't get this math, I thought, if let's say the forint goes to 300 (you do mean a euro will be 300 forint, right?), then you'll end up with 270000 forints for your 900 euros instead of the 247500 when it was only 275. On the other hand, it would suck to get euro as payment if it goes down, (you'd have less forint to spend on food, bills, etc). At most places, including housing, utilities and grocery stores only accept forint.
I may not be an expert on this money exchange thing, but I live off of American dollars, so when the dollar is lets say 210+ forint I get lot more forint to spend when it's only 200. So it's actually a good thing for me.

No, I won't be getting 270000 if forint goes to 300(yes, I mean 300 forints for 1 euro), because my salary is fixed in forints. I would still get 247500 forints, but that would be only 825 euros then. And that is the main problem. I know that I will get less forints if it goes down, but, somehow, I think that euro is more stable than forint, and that's why I have more confidence in euro, and why I would like my salary to be fixed in euros.

Lilly76 wrote:

.... so when the dollar is lets say 210+ forint I get lot more forint to spend when it's only 200. So it's actually a good thing for me.

Yes, it's right BUT the cost of imports within Hungary will go up and therefore the cost of living will go up generally. You'll end up paying anyway. In a country like Hungary, with few natural resources, it relies heavily on imports (fuel, technology, raw materials etc). It's therefore goods bought in foreign currency which will be affected - fuel for example is priced in USD. Some things which are produced internally will be cheaper in the short term as there is a lag in seeing the effects in the economy.

It is notable that countries try and keep their currency low (e.g. China) so it makes their exports cheaper. The American government equates that with an "illegal" export subsidy. The Chinese are not particularly impressed with this argument or are choosing to ignore it.

So in the short term, it's good if goes the other way (more Forints for your EUR/USD) but it will be short lived as the National Bank will simply raise interest rates (and therefore increase the value of the Forint - people will want Forints because it gives them a higher return).

The issuer of the currency (National Bank) always has an aim to maintain price stability and one of the ways they do that directly is to use interest rates.

Milan.K wrote:

I found out that my salary would be tied to forints, not euros, and that scared me away.

Sorry, I missed this part earlier. I agree, I'd want my salary in euros too.

Yes, I'm aware of all the impact currency exchange rates have on local or global economy over time; it does not much affect people like me who get their income from euro or dollars and living in a country like Hungary.
While over the last summer the dollar skyrocketed, (at least that's what it seemed like to me) I had more forints to spend. About 50 to 100 thousand more forints for my $3000+ income. Surely, I may spend a few thousand forints more at the grocery store, or even for gas for my car, blah blah blah, but my (forint based) rent for one, stayed the same. I guess that may even out eventually when dollar goes down and I'll get much less forints.
While I made out good a few times after walking away from an ATM, it was really sad to hear from the locals that because of the exchange rate, their Swiss Frank loan payment nearly doubled (while their forint based income didn't change).
That left people with a smaller budget, and of course they need food and shelter, everything else seems less important. Because of this a lot of people putting off certain things, lets say home improvements, which leaves the workers in that industry literally out of work. I'm sure there are plenty of other examples, which only warrants that a local economy crash is not that far off in the near future.
Basically, my argument here is that if you have more money (in this case forint) in a given month, but you have to spend more because how the economy was affected by a change (which gave you more forint to spend) you're pretty much even. Right? So really, this only affects the locals negatively.

Yes, you said it - if forint goes down, interests will go up, and, therefore, prices, and if I'm getting the same amount of forints, while the prices has gone up, I'm losing there, I can buy less for the same amount.

It's the same here in Serbia - if dinar loses value, public transport prices, for example, goes up, and if your salary stays the same in dinars, that directly means that you can buy less tickets. Therefore, your standard goes down.

For example, I have friends which have salaries tied to dinars, while mine is tied to euros, and now I live much better than them, even thou that difference wasn't that big few years ago. Yes, salaries also goes up, but they will never follow prices good enough.

I hope you can settle with your employer and have your wage denominated in Euros, and still come to Hungary :-)

Update - company rule is to NOT fix the salary in euros, so, they won't make exception just for me. It seems that I'm not so special, after all.

Anyway, I have to decide tonight. And I don't have a clue what to do.

Milan.K wrote:

Update - company rule is to NOT fix the salary in euros, so, they won't make exception just for me. It seems that I'm not so special, after all.

Anyway, I have to decide tonight. And I don't have a clue what to do.

The Euro has apparently gone down in value due to the Irish debt crisis and other problems in Euroland (like Portugal). If you are mobile worker and flexible, then you can always just grab the experience for what it's worth, then leave after a year and go and work somewhere else. No job is forever and maybe having the employer on your CV will be a good selling point for getting the next job in the future.

You're right, but I can't leave if it gets rough, it's a 2-year contract.

Milan.K wrote:

You're right, but I can't leave if it gets rough, it's a 2-year contract.

Oh yes, you can.

Contracts always have escape clauses - ill health, circumstances beyond your control, military service, family issues, kidnap by pirates etc etc.

It's a job, not slavery!

But this one is a little bit different - they will send me to training all across the world, with everything paid, so, that's a quite big investment for them to just let go. If I want to bail out earlier, I will have to pay a little bit over $2000 per month left till the end of the contract.

Milan.K wrote:

But this one is a little bit different - they will send me to training all across the world, with everything paid, so, that's a quite big investment for them to just let go. If I want to bail out earlier, I will have to pay a little bit over $2000 per month left till the end of the contract.

It's not that different from many contracts in Eastern Europe but is never done in other places (like the UK). A lot of contracts contain that sort of clause. The chances of them chasing you (especially across borders) is almost zero. However, there's no point in starting on the wrong foot. If you like them and they like you, then it's all positive, so there's no problem really. I think they sound like a big corporation and if you can "survive" corporate life, then it's all good. Just go for it!

Well, as you said, I don't want to go there with the plan to leave, of course. The only reason for me to even think about leaving is because of the financies, everything else seems more than ok. Also, I don't want to take breaking of contract into consideration, cause it's too big company to mess with.

Anyway, I decided to accept, so, we'll see where am I gonna end up.

Milan.K wrote:

....Anyway, I decided to accept, so, we'll see where am I gonna end up.

Welcome to Hungary!

Yay!

When are you coming?

Not like there were any difference from here till spring though, it's cold and leafless all winter...

Snow can be fun, but in the city it doesn't last.

Winters and authoritarian government policies awaken my migratory instincts :-)