The climate, security, low cost of living and ease of obtaining residence visas are factors that explain Portugal's first place on the list of the 10 cheapest countries to live in. Besides Portugal, there are also four other European States in this ranking.

Portugal remains one of the most affordable destinations in Western Europe primarily due to its lower cost of labor and a relatively lower GDP per capita compared to neighbors like France or Germany. This economic reality translates into lower prices for "consumer-facing" services such as dining out, public transportation, and local groceries. For example, a "Bica" (espresso) in a local café still often costs less than €1, and a three-course "Prato do Dia" (plate of the day) can be found for under €15 in many non-tourist areas. Additionally, Portugal has a strong agricultural sector, meaning much of the fresh produce, wine, and olive oil is produced locally, keeping supply costs down. While housing prices in Lisbon and Porto have risen significantly by 2026 due to the "Digital Nomad" boom, the general cost of living outside these hubs remains very accessible. The government also keeps taxes on basic goods and public services relatively stable to ensure affordability for the local population, which indirectly benefits budget-conscious travelers looking for a high-quality European experience at a fraction of the cost found in London or Paris.