Comparing packages for a family of four: NY vs Shanghai

Question

We are thinking of relocating to Shanghai and I am trying to make sure that our package is comparable to the one we have in NewYork. Let me explain:

We currently live outside New York City, making around 200K-250K a year. We are not saving a lot of money, but we are don't really have to think about money either. We have two kids, schools are free and we own a house so we pay a mortgage around 5000 a month. We take an international trip or two a year and a couple of ski trips in the US. We go our for dinner at least once or twice a week. We have two cars. Kind of a typical suburban situation here.

Our package in Shanghai is as follows:
1.5 million RMB /year, comprised of basic salary around 1.1 and the rest is school allowance for two kids. The gross 1.1 million comes down to around 900K net according to the company (including cost of living allawance which is tax free thus the net is higher).

There is no other allowance (for housing or driver or anything else)

We expect to pay around 35K a month for a three bedroom apartment or house but we don't really like all the new furnished apartments that are decorated with gold etc. We would like to live in a nice area, for instance xintiandi looks great on youtube, but then again I wouldn't know, I ve never been in Shanghai...
Then we hope that the remaining 40K can cover groceries, utilities, entertainment and basically everything else...

So all in all we would like to see:

a) is the salary in Shanghai comparable to the salary we have in NY, considering the different cost drivers
b) is the budget of 35K a month realistic for housing as described (we have heard that expats pay around 40 or 50K a month), but also, can we afford to pay as much for housing (I wouldn't spend 40-45% of my income on rent in NY)
c) considering the expat community with families in Shanghai, what is the range, is this average, above or below?

Any help on the above really welcome... as soon as possible...

thanks so much

BONNIE · Answer

Since you will be earning about the same, with about the same spending power I would really ask you why come to Shanghai ?

The air is nasty; if its just hubby working you are gonna be cut off from friends and family; and I don't see why you would sell your own home to rent one here.

On that salary all the local girls in your hubbies office are gonna be lying on his desk trying to pull him away from you....doh.

If I was married with two kids and high overseas salary, Shanghai is the last place I'd willingly go.

I honestly believe that Shanghai is a really bad posting for a family that has a choice elsewhere.

Come on one of your international trips first and have a look....

laowaiguoren · Answer

You should do well here. It might even be a place where you can save a lot of money. It can be as cheap or as expensive as you want it to be. If you try to live an expat only lifestyle.. it can be more expensive.

If you get out and experience what the city has to offer, it can be less expensive. We have a 5 BR top floor apartment downtown for 9K month.. admittedly a good deal and as good an apartment as some I have seen at twice the price, but you can easily find a decent place well under 35K, if you take the time to look around. That said everyone I now at Lakeville near Xintiandi seems to like it. 

But consider where your husband will be working and where your kids will go to school before deciding on a place. These factors will have a big impact. You do not want to live in Puxi is school and work are in PuDong.

TaxBeagle · Answer

If you're left with 40k a month for utilities, going out and stuff like that, then you'll be absolutely fine.

As for living, it all depends where you'll be working, you don't want to be sitting in traffic for over an hour just to get to and from work.
35k is realistic for a nice 3 bed apartment, or even a decently refurbished lane house with small garden, but that's the bottom end.
Let us know where you're going to work...

JohnF88 · Answer

I disagree with the above posters. 35K is not enough for a living situation that is comparable to what you have.

Housing that comes in the range of what you have now is more like more like 45 or 50K. You can do a car and driver on the cheap (around 9K), but that's a hassle, so plan on paying around 12-15K per month inclusive of gas, etc.

Food is expensive. We eat half local, half imported at home, and eat out once or twice a week, and we spend about as much as I would in the US on food, possibly more (a box of Cheerios is around 10 USD for example.)

Travel is expensive - flying back tot he US once a year will run you at least 8K just in tix for a family of four. Then you'll take a trip to Thailand, or wherever for Chinese New Year and that's another expense.

So you should factor all that in: especially that good quality housing is expensive.

JudyXu · Answer

I'm with Bonnie here. Why fly across the world without a bit of extra from your current salary, which is already on the "very comfortable" side, except for experience?

As for your budget, I'd like to echo rocco's reply on the housing front - 35K a month is very doable. I'm not sure, though, if 40K a month is really enough (and with savings) for a family of four. I'm single, and I'm not on an expat package. I'm flexible with my lifestyle, being more local on most days, especially weekdays, and a bit of the western fare on weekends. Yet, my monthly expenditures could still [easily] sum up to 7-10k.

It's probably not realistic to take me, a single person, as an example, and multiply my budget by four. Just saying...

Comparing packages for a family of four: NY vs Shanghai

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