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.

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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.

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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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