During the 1970’s and 1980’s Spain was a very cheap place to live, but now Spain has caught up with the rest of Europe and as such the cost of living in Spain is comparable to the rest of Europe. Alcohol and tobacco are still almost half the price of other European countries and fresh fruit and vegetables are generally cheaper, as are meat, fish and poultry but clothes, shoes and electrical goods are slightly more expensive. The cost depends mostly on whether you buy imported or locally produced goods. Generally you should expect to budget for everyday living costs on the same basis as you would in the rest of Europe.

A general rule of thumb for many people, when calculating the cost of living in Spain is that, if it is going to cost you 150 euros a week to live in the UK, it will cost you around 100 euros a week to live in Spain. This rule obviously has its exceptions but if you use this rule across all your expenses you will find that it wont be too far out. Eating out can be extremely well priced and it is possible to have a "menu of the day" for as little as 6 or 7 euros for which you will get three courses including a bottle of wine and bread. It is often cheaper to eat out than it is to stay in! A good meal for two with wine, including tips and VAT is rarely more than 50 euros.

In the cities of Spain the price of property is high relative to the costs of living. Many Spaniards spend up to half their income on housing but on the other hand a cup of coffee or a glass of beer can be bought in a Spanish cafe for one Euro or less. As a consequence, many Spaniards in the big Spanish cities live in small apartments and observe a social life that centres around cafes and restaurants, rather than their homes.

Since the introduction of the Euro, there has been a perceived inflation of prices in Spain. With the conversion from Pesetas to Euros, most prices were rounded up to the nearest Euro equivalent.