How much does it cost per month to live a decent life in Finland?

Last year we published a blog on the costs of living a decent life in Finland. In that one, we focused on the monthly cost of food. In this one, we take a more comprehensive look at how much it costs monthly to live a decent life in Finland. 

As we explained in the earlier blog, the University of Turku runs a research project on reference budgets. In it, researchers study the costs of living a decent life in Finland in the 2020s. They recently published a comprehensive report on their cost calculations. This is what we will discuss today.

Living a decent life in this context means having the resources to fulfill the psychological, social, and physical needs we have in our roles as children, spouses, parents, employees, entrepreneurs, students, or citizens. Living a decent life goes beyond subsistence. It means participating in society actively and autonomously in those social roles. 

This is thus different from, for example, comparing actual living costs across different countries. We have also published blogs on that particular topic.

In contrast, researchers in this project (Anna Grahn, Anna Kuusela, Lauri Mäkine, Outi Sarpila, and Susanna Mukkila) use so-called reference budgets to determine the costs of living a decent life for different household types in Finland. In that earlier blog, we had a longer discussion on the concepts of a decent life and reference budgets. Please read those definitions there. It will make this blog easier to understand.

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The different costs making up the reference budgets

To come up with the cost estimates, the researchers had to decide on 

• household types they would determine the costs for;
• the type of costs to include; and 
• how to calculate the costs for each cost type. 

They settled on 12 different household compositions. These represent typical households of modern-day Finland quite well. For example, they defined four different kinds of single-person households. One type represents a childless heterosexual couple in their 40s. Three types are single-parent households and four are two-parent households with one or two children.

In terms of the costs, the researchers decided to include costs related to personal hygiene, healthcare, food, housing, transportation, pastime and hobbies, clothes, household items and appliances, and telecommunication. Researchers used surveys and discussions with focus groups to determine what items to include in these costs. 

They collected the prices of selected items from different stores in Finland. Prices used are from such stores as, for example, Prisma, Tokmanni, Jysk, and Gigantti. Most often they chose the least expensive item or service. At times, they used averages that excluded the most expensive options. In their calculations, they took into consideration the items’ use times. 

You can find a detailed description of their methodology with respect to items included in each category and their price calculations in the report. The considerations are quite complex and comprehensive. We have only scratched the surface here.  

Note that the following reference budgets do not include the costs of owning a car.

How much does it cost monthly to live a decent life in Finland?

The report presents the monthly costs of living a decent life in Finland for the different household types. It takes into account cost differences in different parts of Finland. It presents decent living costs separately for Helsinki, the Helsinki metropolitan area, large university cities, and the rest of Finland. 

Let’s first take a look at the monthly costs of childless households in different parts of Finland (Table 1). 

For single-female households, the monthly costs of a decent life vary from 1102 to 1508 € depending on where in Finland that person lives and what age that person is. For single-male households, those costs vary from 1119 to 1516 €. In this model, the costs of living a decent life are thus higher for single men than for single women. This is mostly because men are assumed to need more food than women. 

For all of these different types of childless households, the costs of a decent life are highest in the metropolitan area around Helsinki. The difference between costs in the metropolitan area and Helsinki is mostly due to transportation costs. In comparison with areas outside Helsinki and the metropolitan area, housing costs also contribute to cost differences. 

For households with children, the variation in costs is much higher. This is because in some of these example households there is only one parent and one child. Some, in turn, have two parents and two children. There is also variation in the ages and genders of the children. These contribute to differences in the associated costs. 

As we can see from Table 2., costs for each household type are again highest for those living in the metropolitan area of Helsinki.

The share of different types of costs: housing

The report gives the reference budget for each of the different cost types (personal hygiene, food, etc.) separately. We are not going to into that much detail here. However, we have calculated the share of some of these expenses of the different reference budgets. 

For example, the share of housing costs in reference budgets of childless households varies from about 33 % to about 56 % (Table 3).  For households with children, these vary from about 28 % to about 50 % (Table 4). We have included rent, water, electricity, and insurance costs in the housing costs.

In Helsinki and the metropolitan area around Helsinki, housing costs take a larger share of the total reference budget regardless of whether there are children in the household or not. However, for childless households, housing costs take up a larger share than for households with children. Naturally, having children increases costs overall but housing costs do not go up proportionally. Hence the drop in the share of housing costs when children are included in the households. 

The share of different types of costs: food

Although we discussed food and eating-related costs in our earlier blog, we wanted to show you how big of a share strictly food-related costs take up of the reference budgets of the different household types. 

In single-person households, food costs account for anywhere between 15.8 % and 23.5 % of their reference budgets (Table 5). For a childless couple, about 25 – 30 % of all costs are food costs depending on the area of Finland they live in. 

In Helsinki and the surrounding area, food costs make up a smaller proportion of the reference budget for all childless households than outside this area. This is mostly because housing in Helsinki and the metropolitan area is more expensive than elsewhere.

For households with children, food expenses account for at least 20 % of the reference budget. At most, they take 31 % of their budget. Thus, in comparison with childless households, food expenses in general take a larger share of the reference budget of households with children. 

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Minna

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Minna knows what expat life is like. She's lived longer and shorter periods in the US, Estonia, China and Germany. She also knows how to recruit foreign talent and how to manage on-boarding effectively. She did that for 10 years. She is passionate about expat coaching and cultural training. She enjoys creating interesting and helpful video and live training courses, blogs, and other content for internationals and their employers. Her particular interests are expat spouses and just workplaces.

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