A couple of years ago Chill asked me about the cost of living in Germany compared to say Canada. When I thought about it I figured total cost of living will probably be very similar - only that you pay for different things a lot more and for others a lot less. So, here is my list of what is comparatively cheap and what is expensive in Germany.
Things that are cheap in Germany
Food. Especially groceries and your usual supermarket basket. It's almost embarrassing how cheap food is in Germany. Or better, how content Germans are with cheap food. It's all a demand thing: Food is about the last thing Germans want to spent money on. You'll find people feeding their family car with ultimate 102 octane race sport gas, but stuffing their face with €5 a kilo meat. When I was in the US I was kind of shocked that the cheapest frozen pizza was something like $8. I am used to getting 3 pizza for €1 from the local discount store. "Discounter" has become a commonly used term in Germany for cheap stores. And when it comes to groceries in many areas discounters have largely replaced traditional supermarkets. I actually have to drive to the next city to go shopping in one of the better ones.
German bread - outstanding and affordable
Alcohol. Even though taxed, alcohol is ridiculously cheap in Germany. Even the very best beer costs only about €0.75 a bottle. Cheap "discount" beer is €0.25 a can. And we are talking 0.5l cans here. There is absolutely no point of ever buying whiskey or vodka at an airport duty free shop in Germany: Just outside the door you will get the same stuff for less! Germany is probably the cheapest place on earth for brand liquors.
Rent. This is a difficult one to assess, since there are huge differences in rent pricing within Germany. But even the by far most expensive city in Germany, Munich, is still considerably cheaper than say Paris or London. Our capital, Berlin, is actually famous for its very low rents ("poor, but sexy"), although that is changing currently and prices are rapidly rising as Berlin is in an economic upswing.
Still, unless you live in one of the rather expensive spots like the entire Munich or Stuttgart area, rent will be considerably lower than in other high income countries.
Fast food. Well duh, fast food is cheap everywhere. However I am not talking only about the big American burger chains. If you include the range of Asian, Italian, and Turkish "fast restaurants", you'll actually get decent, tasty food at cheap prices (all in the €3 to €8 category for a simple meal).
Dining in a quality restaurant is not cheap obviously - but also not really more expensive than in other countries. One difference that I have noticed though is that you are expected to order drinks with every meal.
Tips. You basically only have to tip in restaurants and bars. Most people are dirt cheap and just round up, or tip to something like 5%. 10% is considered a generous tip, for anything more the waiter might ask you if you are sure about leaving so much money. It's slightly higher in upscale places, but again 10% is a perfectly good tip. Other service personnel like cab drivers, hair dressers, or hotel staff won't expect tips (although it is customary to at least round up).
Nightlife. This goes mostly along with the cheap alcohol prices. Bars and clubs are really affordable for the most part. Sure there are expensive upscale places too, but your average night out in Germany is most likely far less than in other countries. €5 to €10 is a standard cover, and €5 for a drink is considered expensive.
Things that are expensive in Germany
Gas. Holy shit is gas expensive. Standard euro 95 gas was €1.78 yesterday. That is $8.5 on the gallon. Since it's subsidized (or rather, less heavily taxed), diesel fuel is actually less expensive than regular gas - but it's still at something like €1.65 a liter. That is the prime reason why so many people drive diesel engines though in Germany, and why German car makes are at the front when it comes to developing efficient diesel engines.
Water. This is a pet peeve of mine, especially bottled water on the go. Carbonated or not, a small bottle of water on the go will cost €2 or more. Drinking water fountains in public places are non existent. Also beware of ordering water in a restaurant: You will likely get charged more than for beer, unless you specifically ask for tap water. Even worse in clubs: Ask for water and they'll give you a tiny glass bottle for €4. Often enough they'll even refuse to give out tap water for free and insist you buy expensive bottled water.
Transportation. I already mentioned gas, but unfortunately if you want to take other means of transportation it's likely not going to be cheaper. Taxis are just stupidly expensive. For the price of a 5 minute cab ride in my tiny home town I can cross the entirety of Seoul.
Trains, subway, and trams too are rather expensive. Sure, for everyone of those you can get discounted monthly tickets, loyalty cards, buy way in advance, etc to lower the price. But if you just get a single one way ticket you might as well blow that $8.5 on gas and drive yourself.
Drugs. Medical drugs, prescription or not, are ridiculously expensive. One of the usual items Germans bring back home from a foreign trip is a box of aspirin. That's because original Aspirin in Germany is almost €1 a pop. Practically all medication, prescription or not, can only be sold at specialized, licensed drug stores - one of the more outrageously obvious examples of lack of free market hurting customers. The pharmacy lobby is pretty powerful though, and have successfully blocked all attempts to liberalize drug sales; And obviously big pharma is happy with the prices.
Craftsmen. Hiring anyone from electricians, plumbers to carpenters can really set you back. Most notorious are locksmiths, who like to charge you several hundred Euro for a 10 minute door opening job should you have locked yourself out of your apartment. Of course, it should also be said that the quality you get is probably the best in the world. But still, the very high prices contribute to many Germans becoming do-it-yourself handymen as a hobby. It's no accident that Germany has the highest rate of hardware and home-improvement stores in the world. Often enough you can find one even right in the center of major cities.
All pictures from one of my favorite places on the internet: http://fuckyeahgermany.tumblr.com/
Random bits of knowledge about Germany
Ep6: Gun ownership
Ep4: Bild and Fear
Ep1: Small Talk