Live and Retire in Mexico: Cost of Living

Live and Retire in Mexico: Cost of Living

Many people want to retire in Mexico because they have heard that the cost of living here is lower than in the U.S. or Canada. Mexico became famous for being cheap in the 60s and 70s and I have no doubt that it was. My experience from 2001 to 2007 (at the writing of this page) has been that cheapness is relative because buying power is relative. When you are spending dollars in Mexico your buying power is stronger than when you are spending pesos in Mexico, so in that sense the cost of living in Mexico is lower than up north.

Mexico is Not a Sunnier Version of the U.S.

A less than obvious factor that makes the cost of living in Mexico higher than we dream is that many things that we take for granted up north are not automatically in place in Mexico. For example:

  • -Unsafe drinking water means that we must have a water filtration system or purchase bottled water.
  • -Occasional contact with unsanitary water or food causes loss of productivity and incurs medical costs for treatment.
  • -The monopolized telephone system charges outrageous prices causing people to avoid using the phone and thus generating the hidden costs of lost potential. People sometimes have to contract a variety of other services to meet their needs and thus expend extra time and money.
  • -The relatively poor transportation system makes travel more time consuming and tiring. Though the excellent bus system probably more than offsets this cost.
  • -The unreliable electrical system may create a need for alternatives.
  • -The rampant class-ism creates a lack of customer service in industries nationwide.
  • -Corrupt police and the Napoleonic Code of Law mean that in the case of an accident greater amounts of time and money may be required to deal with the legal effects.

I could go on, but I think you get the idea. Mexico is not a sunnier version of the U.S. It’s a developing country. The only way to truly calculate these “costs” in your life is to experience them and see for yourself before you decide to live or retire in Mexico. In my book Mexico: The Trick is Living Here I tackle the complex topic of cost of living in Mexico by giving descriptions of different lifestyle “levels” with estimated costs so that people can see where they might fall on the broad range between “living like a local” and “living in luxury.”

image of cover of e-book: Mexico The Trick is Living Here
Here’s what one reader had to say about this humorous, practical e-book.

——–

“[I was impressed with] your ability to get right to the heart of what’s important in life, and especially to truly “see” the Mexican people. I don’t know if that’s because [your husband is Mexican], because you have been forced to immerse yourself, or just because you have extraordinary insight, but I think it’s the most important thing you have to contribute. I will tell you this: by far more important to me than the information re: how to register your car or get a FM3 visa, were things like:

* real life information on lifestyles,cost of living, and the average Mexican home

* the story of your personal healthcare experiences

* building your “posse” of people around you who make your tacos, do your laundry, etc.

* the importance of close relationships with your neighbors

* social graces like how to greet and say goodbye to everyone

* the section on the varieties of fruit and neat stuff like ice cream

* all the little glimpses of simple day-to-day life

“Nobody else provides that kind of information, and that’s what you are really good at.”

–Dave Brown, Colorado

If I Retire in Mexico Will it Lower My Cost of Living?

The most obvious factor that makes Mexico less cheap than we dream is that there are many places where prices are quite high. Ajijic, near Guadalajara, Cuernavaca, near Mexico City, and Cancun in the “Riviera Maya” are all examples of places in Mexico that have a high cost of living and they are certainly not the only ones. Obviously, the presence of a high percentage of Americans, Canadians, and other foreigners drives prices up (as well as the presence of lots of Mexico’s richest, too).

“Your book is unique, most useful and a smart idea.”

———–
Hi Julia,

I am enjoying the book. Thank you so much.

…You are doing a great, useful, down to earth service and all the anecdotal info and style of your writing is great. I feel like I am talking to a friend. Not being adventurist, but so tempted to make the change….

thanks again, Dan Serbin

For example, renting a tiny house in Cuernavaca costs between $400 and $800 U.S. dollars a month. If $400 sounds cheap to you, then you need to understand what I mean by tiny. Tiny in Cuernavaca can be the size of a camping trailer, with no parking, an unreliable water supply, and usafe stairs. Would you pay $400 a month to live in a camping trailer in someone else’s back yard? That’s the way many of the least expensive places to rent are set up.

Of course, the best way to get a good sense for the true cost of living — for you as an individual with your own personal priorities and activities — is to rent in the area you’d like to move to for 6 months or so. That’s why I chose to present the different lifestyle “levels” in the cost of living section of my book. I try to give my readers an idea of whether or not they would find their new life in Mexico comfortable enough based on their financial resources. e-book

You wouldn’t buy a car without first researching its safety, comfort, reliability, and gas mileage.

DON’T MAKE THAT MISTAKE WITH MEXICO.

There’s NO NEED to make planning to retire in Mexico like reading the newspaper through a glass of water when you can have REAL ANSWERS. Treat yourself to a book which will clear up your doubts. Click here to learn how.

The prices I give in my book are estimates that will give you ballpark ideas of how much it costs to live a certain way.

Mexico: The Trick is Living HereDear Ms. Taylor;

Thanks for writing such an informative, enjoyable and readable e-book! The information you have provided is helping me with my planning for an extended stay, 2-3 months, in Mexico.

I don’t have a printer at home and I’m requesting permission to store an electronic copy of your book on my iPod until….

–Peter A Cassidy
British Columbia, Canada

Mexico is Expensive if You Aren’t Spending “Dolars”

Another factor that can make the cost of living in Mexico extremely high is to have to earn money in Mexico. High paying jobs in Mexico are rare and hard to find. Most jobs don’t pay enough to live on and often the hours are long and split shifts are common. To top it off, if you retire in Mexico, then you are probably over 50. Mexico is “ageist” and it’s increasingly hard to get a job once you pass about 40 years old. I suggest that you do not live or retire in Mexico unless you have some U.S. or Canadian dollars to spend — or are just on a one or two year lark and have a way to move back north.

What do YOU Need
to Learn About?

By reading this book, you will learn about the things you wouldn’t have known you needed to learn about.

See also The Cost of Living in Mexico Depends on Your Lifestyle for a useful way to figure out what your personal buying power will actually be once you live or retire in Mexico.

Cut The Negativity and Give Me the Facts, Please.

To help you figure out the cost of living in Mexico, click here to see a detailed grocery list.

Budgeting in Mexico

Click here to read some tips on budgeting when you retire in Mexico.

Click here to read about how much and how rapidly prices have been increasing (2007).

Click here to read a real-life case study of costs for an expatriate in Ajijic.

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Cost of Living in Mexico

The Cost of Living in Mexico
Depends on Your Lifestyle
When You Live or Retire in Mexico

If you have been researching and planning to retire in Mexico, you may have noticed that it’s hard to get solid information about the cost of living in Mexico.

I have good news. You can breathe a sigh of relief because you’ve just found a useful source of information.

The cost of living in Mexico is quite varied. Imagine trying to tell someone from Europe what the cost of living is for the entire United States. Well, it’s that hard to describe the cost of living in Mexico — yet it’s crucial information for anyone planning to live or retire in Mexico. Additionally, there aren’t the same sources of information on the Internet as there are for the U.S. and other similar countries. Getting solid information about Mexico is a little like reading the paper through a glass of water.

To help my readers I have devised a unique way to elucidate the cost of living in Mexico. I describe three levels of lifestyle (low, medium, and high) and give prices — as references — at Cuernavaca prices. These three “lifestyle levels” provide a snapshot that will allow you to imagine how you would like to live in Mexico once you retire here. You can then use them as starting points to plan accordingly for your retirement.
e-book
You wouldn’t buy a car without first researching its safety, comfort, reliability, and gas mileage.

DON’T MAKE THAT MISTAKE WITH MEXICO.

There’s NO NEED to make planning to retire in Mexico like reading the newspaper through a glass of water when you can have REAL ANSWERS. Treat yourself to a book which will clear up your doubts.  Click here to learn how.

The prices I give are estimates that will give you ballpark ideas of how much it costs to live a certain way. Keep in mind that in addition to your lifestyle, the cost of living in Mexico also depends on where you live. We all know that it costs less to live in Virginia than it does to live in San Francisco, California. In the same way, it costs less to live in Morelia, Michoacan than it does to live in Mexico City or Cuernavaca.

Keep in mind that really touristy areas, such as Los Cabos and Cancun, cost much more. Also keep in mind that if you don’t need to work and can handle a less “modern” city, you can find lovely places in Mexico with much lower prices. If you do need to work, you need to consider the amount of industry or tourism in the area.

Once you get serious about living in a particular area, you can use the ideas on this page and in my e-book to investigate the actual prices and cost of living in your area of choice.

The Cost of Living of the “LOW” lifestyle Level in Mexico:

This lifestyle is rustic in many ways compared to life in the US, but covers the basic needs (you have to actively define your basic needs). See letting go of materialism for a simple lifestyle to read about peeling your lifestyle-onion.

This lifestyle costs a total ballpark figure (in Cuernavaca) of about XX,XXX to XX,XXX* pesos per month for two people.

e-book
*To see the prices and read lots of important information about life in Mexico that’s not available anywhere else, read the e-book called “detailed and thorough” by the owner of mexicoadventure.com.

At this lifestyle level, eating out consists of tacos and comida corrida, with a very occasional trip to a more expensive restaurant. It involves eating very few packaged foods and shopping for fresh meats and vegetables at the market, rather than in a supermarket. It does not include many movies, nor many trips in a taxi. It might include having one economical car per family and may include one or two extras such as exercise or language classes, but the extras have to be prioritized. For example, “Do we want cable TV or dial up internet service?”

Housing:

Housing at this level costs between X,XXX and X,XXX* pesos per month, with X,XXX* being most common. You’d have to get lucky to find something for less than X,XXX*/month. At this lifestyle level, features of the housing are considered separately. It is possible to find the ones that are most important to you, but probably not all of them together (that would jump you up to the medium level).

e-book
*To see the prices and get the information you need about real life in Mexico, read the e-book Mexico: The Trick is Living Here.

“I bought a copy, and I think I struck a wonderful bargain.” — Michael Greene, Online Instructor.

Note: at this level of lifestyle you have to buy ALL of your own appliances—even your shelves and cupboards. Small, less expensive stoves and refrigerators are available.** You will have a wider range of appliance options than are available up north. If you can purchase these, then it represents a one-time purchase rather than a cost that would otherwise be included in the monthly rent.

Features to consider are the following:

1.  There may be asbestos in the roofing or water tank

2.  A separate sink in the kitchen and bathroom

3.  Hot water to the kitchen

4.  An outside area to put a washing machine (covered vs not covered)

5.  Private area to hang clothes to dry

6.  A private vs. shared patio area

7.  Space for plants in a patio area

8.  Closets

…* 

20. Other kinds of pollution, such as smells from food stands

21. Safety of neighborhood

22. Frequency of bus service (I recommend that it come by at least every 15 minutes because this lets you get by without a car)

23. Protected off-street parking for a car (room for two may be too much to ask for)

24. Stores within walking distance

e-book
*To see the rest of this list and read lots of additional information about life in Mexico that’s not available anywhere else, read the e-book Mexico: The Trick is Living Here.

The Cost of Living of the “MEDIUM” lifestyle Level in Mexico:

This lifestyle is simpler in many ways compared to life in the US, but doesn’t force you to peel your lifestyle-onion down very much.

This lifestyle costs a total ballpark figure (in Cuernavaca) of about XX,XXX to X,XXX* pesos per month for two people.
Conveniences at this lifestyle level often include….

e-book
*Don’t stay blind to the realities of living in Mexico. To read the rest of this section get the all new Second Edition of Mexico: The Trick is Living Here.

The Cost of Living of the “HIGH” lifestyle Level in Mexico:

This lifestyle can actually be more luxurious than life in the US….

*To read the rest of this section get the all new Second Edition of Mexico: The Trick is Living Here.

“…forthright and entertaining…” –Michael Greene, Online Instructor 

**To see some of the variety in appliances available, click here. When you get to the site, click on Electra.com, then where it says “buscar” type in the words “Estufas” and “Refrigeradores.” It’s not really easy to see, but some stoves don’t have an oven under them, and many of the fridges are actually slightly bigger than our mini-fridges (you know the ones college students have in their dorm rooms).

You can also find out the value of Mexican pesos in your own currency.

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Plan Your Budget When You Live or Retire in Mexico: Two Tricks to Sanity

Surprise Costs: Plan Some Slop into Your Budget

I recommend that you plan your budget with some flexibility in it when you retire in Mexico. There are occasionally surprise charges for things that you can’t plan ahead for. They don’t cost that much in the grand scheme of things, so if you have a little extra you’ll be able to pay them easily.

Telmex, the national phone service provider, is often an inventor of surprise charges. Expatriate Jill Flyer describes one of these surprises that popped up in her life recently. “My newest frustration was being billed about 700 pesos extra on my Telmex – I didn’t want to wait 2 hours at the office, so the guy there told me that I could call the Telmex info line. After a day of trying to get a hold of them, I finally connected, only to be told, that they couldn’t answer the question, and I would have to go back to the Telmex office.

“So, I went to the office and they produced a piece of PAPER that I had signed SIX months ago for the installation of my line, at which time, I was charged some installation money. But, they explained, that was for putting in the outside line and this was for the inside jack (which, had I known there was another charge, I could have had a jack installed for 250 pesos). AND, none of this was computerized, so there was just this piece of paper, which got lost for six months and suddenly reappeared and so I needed to pay this with my bill that day or get my phone service disconnected!”

I have no idea how Jill’s telephone service office invented that charge. When I had my line installed I was charged one fee and that was it. Sometimes in Mexico you get charged for things that aren’t right.

e-book
Surprised?

Jill’s experience is typical of those retired in Mexico. Don’t stay blind to the realities of living in Mexico. Treat yourself to the all new Second Edition of Mexico: The Trick is Living Here. Retire in Mexico with your eyes open.

“…forthright and entertaining…” –Michael Greene, Online Instructor

I’ve had a few similar experiences with Telmex. One of their favorite tricks is to add a “free” service for a month or two, then make it completely impossible to cancel. They give you the run around on their 800 number for DAYS and when you finally get through to cancel, they tell you that you’ve passed the deadline and must pay for the whole month (no pro-rating at Telmex. That’s for the customer oriented organization, not a monopoly) PLUS a cancellation fee. You’ve got to love that.

Click here to read about a vehicle related surprise cost in Mexico.

Cash Budget: Record Keeping Once You Retire in Mexico

Once you retire in Mexico the way you plan and track your budget may change. Since bills can’t be paid through the mail with checks and internet services for banking aren’t as accessible as in the U.S. payments are made in person. As a result, almost everything in Mexico is done with cash. This means that your records for your payments are hundreds of tiny receipts which can quickly begin to float around your house, collecting on counter tops and never adding up. To top it all off, bank statements are few and far between, so it’s hard to reconcile any doubts that you may have.

e-book
Dear Julia,
I have been living in Mexico for 1.5 years now and still found your book very helpful.

Again. Thanks.
–Janet Onnen.

Retire in Mexico with the book that expatriates already living in Mexico find helpful. Treat yourself to the all new Second Edition of Mexico: The Trick is Living Here.

When you retire in Mexico it is also easy to get pound wise and penny foolish. You plan ahead how much you are paying in rent or house payments, how much your annual residence visa costs, etc. but you need tomatoes for a salsa and you grab a few pesos from the “penny pot” and head around the corner to the local frutería. How many trips to the frutería does it take to add up to an extra (hidden) trip to the market? When you go out and about, how many times do you drop 30 pesos for a ride in a taxi, or for tips here and there when you are driving?

Here are some ideas to help you keep track of your budget once you retire in Mexico:

1. Get a small file cabinet and set up folders for each item you will pay. (This will also help you keep your immigration paperwork together.) Train yourself to put the receipts in the correct folders right after paying them.

2. Include a calendar in your budget records. Mark on it when you go to pay each bill.

Note: A calendar can also help you to know when a bill is due. Often bills arrive at your house after their past due date. Of course, this is no excuse for not paying them. If you are like me and things are out of mind when they are out of sight you might need a system for reminding yourself to pay them. Mark the monthly due dates onto your “bills calendar” and check it regularly.

3. Withdraw the amounts needed to pay bills ahead of time and set that money aside in a special place. Include in this an amount for “pocket money” and don’t allow yourself to withdraw any more “pocket money” until your next income check/deposit arrives.

4. Occasionally take the time to sit down and write down the amounts you are spending on each living expense and add them up — make a special effort to include the little expenses, such as parking when you go out, tips for small services, such as window washing and parking lot attendants, etc. This will give you a big picture of your monthly retirement budget including all the little expenses that flow out of your pocket on a daily — sometimes hourly, rate. You can make adjustments if you don’t like the way the money is flowing.

Before I lived in Mexico I used to create and stick to a careful monthly budget. The cash economy, reduction in buying power due to my income in pesos, and the lack of tracking paperwork, such as bank statements has brought this system to a grinding halt. I try to do the things listed above, but often I just end up trying to make the cash in my wallet “last” until the next pay day. This works relatively well, but it would be better if I could more aggressively save money. When you first retire in Mexico if you are aware of the need to budget cash expenditures you can get started on the right foot.

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