Readers ask: “Can you really live on less money in Mexico.” We answer: “It depends.” It depends primarily upon where you are from, where you want to live and how you want to live.
The cost of living is always top-of-mind for most expats and aspiring expats and can be the deciding factor for many in determining location and lifestyle. We took a look last month at the monthly budgets of 33 expat couples and singles from all areas of Mexico, both urban and rural and profiled expat budgets in Puerto Vallarta and Mexico City, two areas known for higher living costs. But let us look first at the big picture before we drill down to the city level.
Mexico always does well in major cost of living studies conducted by global firms. The professional services company Mercer has been doing cost of living studies for years and recently released its Mercer Cost of Living Survey 2020, a survey of 209 cities based on the current cost of what Mercer calls its “basket of goods and services.” Hong Kong was the most expensive city in the world and New York City was number six. Mexico City ranked 120th and another corporate expat magnet in Mexico, Monterrey, was 177th.
Numbeo, a global crowd-sourced cost of living website that we use for our Cities profiles, also just published its mid-year cost of living index by country. Pakistan was the least expensive country to live in, but Mexico burnished its reputation as a low cost of living location by ranking 119th out of the 135 countries surveyed. By comparison, the U.S. ranked 21st and Canada 31st.
Numbeo and Expatistan, both crowd-sourced cost of living data websites, allow you to compare the cost of living between the city you currently live in and cities you are considering as places to live in Mexico. Both services rely on user input questionnaires. Some smaller cities in Mexico are not included because of limited user data. Popular expat cities have more respondents and more stable results. Puerto Vallarta, for example, had 379 entries in the past 12 months from 55 different contributors.
For this article, we asked 33 expats living in cities throughout the country to tell us how much they are spending monthly in a dozen major cost categories: Out-of-home dining, groceries and sundries, transportation, utilities, personal services (maid, gardener, etc.), sports and leisure, childcare, clothing, rent or house payments, insurance, credit card and other expenses. We asked them to provide pre-COVID-19 budgets because the pandemic has affected spending, particularly in the out-of-home dining category.
We looked specifically at budget profiles for Puerto Vallarta and Mexico City because both have large expat populations and generally represent a higher cost of living. All budgets are in pesos.
Puerto Vallarta
In all EIM surveys we have conducted, aspiring expats tell us that Puerto Vallarta is their #1 destination. This beautiful international resort city on the Bay of Banderas is more expensive than most inland cities, but similar in cost to other beach resort locations like Los Cabos or Cancún. We looked at four different household budgets in Vallarta, which we profile below. Travel to home country or vacations is not included in monthly budgets.
Budget #1
Profile: American couple over 65, both have online businesses. Their monthly budget does not include business expenses. The couple rents a three-bedroom and three-bathroom home with a pool near the beach and does not have dependent children. They have a car.
Their monthly budget is 73,800 pesos a month, or about US$3,310.
Out-of-home dining: 1,000 pesos
Groceries and sundries: 11,000 pesos
Transportation: 1,500 pesos
Utilities: 8,600 pesos
Personal services: 3,700 pesos
Sports and leisure: 0
Childcare: 0
Clothing: 2,000 pesos
Rent: 31,000 pesos
Insurance: 1,000
Credit card: 14,000 pesos
Other expenses: 0
Budget #2
Profile: Retired American couple over 65. The couple rents a two-bedroom and two-bathroom apartment near the beach and does not have dependent children. They have a car.
Their monthly budget is 66,625 pesos a month, or about US$2,987.
Out-of-home dining: 8,000 pesos
Groceries and sundries: 9,000 pesos
Transportation: 1,000 pesos
Utilities: 2,500 pesos
Personal services: 1,600 pesos
Sports and leisure: 4,000 pesos
Childcare: 0
Clothing: 1,000 pesos
Rent: 29,000 pesos
Insurance: 10,525 pesos
Credit card: 0
Other expenses: 0
Comment: “I would have to say that Vallarta is one of the more expensive places to live in Mexico, but we live quite well on our social security and don’t feel we have sacrificed anything to live here. It’s one heck of a life for two people over 70.”
Budget #3
Profile: American couple under 50 who both operate online businesses. Their business expenses are not included. The couple rents a two-bedroom and two-bathroom apartment near the beach and does not have dependent children. They do not have a car and rely on public transportation.
Their monthly budget 114,745 pesos a month, or about US$5,147.
Out-of-home dining: 28,000 pesos
Groceries and sundries: 22,000 pesos
Transportation: 3,800 pesos
Utilities: 5,945 pesos
Personal services: 1,650 pesos
Sports and leisure: 2,200 pesos
Childcare: 0
Clothing: 550 pesos
Rent: 44,500 pesos
Insurance: 6,100 pesos
Credit card: 0
Other expenses: 0
Budget #4
Profile: Canadian couple over 65. He works remotely part-time as a consultant with mainly U.S. clients. The couple rents a three-bedroom and three-bathroom townhouse near the beach and does not have dependent children. They do not have a car and use public transportation.
Their monthly budget is 43,790 pesos a month, or about US$1,965.
Out-of-home dining: 6,700 pesos
Groceries and sundries: 13,400 pesos
Transportation: 2,300 pesos
Utilities: 2,200 pesos
Personal services: 2,500 pesos
Sports and leisure: 420 pesos
Childcare: 0
Clothing: 670 pesos
Rent: 14,500 pesos
Insurance: 1,100 pesos
Credit card: 0
Other expenses: 0
Comment: “Our cost of living here is one-third of what it would be in Vancouver, Canada.”
We also looked at three monthly budgets from Mexico City, which ranked in the middle of Mercer’s most expensive cities study. It is mainly a corporate expat enclave, but many non-corporate expats also live there, and for less.
Mexico City
Budget #1
Profile: Young American couple, both 30. He works for a U.S. company. They rent a two-bedroom and one-and-a-half-bathroom home near the center of Mexico City. They do not have dependent children or a car and rely on public transportation.
Their monthly budget is 49,970 pesos a month, or about US$2,240.
Out-of-home dining: 4,400 pesos
Groceries and sundries: 6,000 pesos
Transportation: 1,600 pesos
Utilities: 2,090 pesos
Personal services: 360 pesos
Sports and leisure: 1,600
Childcare: 0
Clothing: 2,200 pesos
Rent: 23,720 pesos
Insurance: 8,000
Credit card: 14,000 pesos
Other expenses: 0
Comment: “The cost of living here is often higher than what people think, but it’s still only 60 percent of our costs back in
Washington D.C.”
Budget #2
Profile: Single Canadian woman in her 40s who has her own business in Mexico City. Business expenses are not included. She rents a furnished studio loft in a popular expat neighborhood. She does not have dependent children or a car and relies on public transportation.
Her monthly budget is 33,400 pesos a month, or about US$1,495.
Out-of-home dining: 2,500 pesos
Groceries and sundries: 3,000 pesos
Transportation: 800 pesos
Utilities: 1,200 pesos
Personal services: 1,200 pesos
Sports and leisure: 3,000 pesos
Childcare: 0
Clothing: 1,200 pesos
Rent: 19,000 pesos
Insurance: 1,500
Credit card: 0
Other expenses: 0
Budget #3
Profile: American woman under 60 and Mexican husband. Both work in Mexico in the arts. They own a two-bedroom and one- bathroom apartment near the center of Mexico City. They do not have dependent children or a car and rely on public transportation.
Their monthly budget is 5,415 pesos a month, or about US$242.
Out-of-home dining: 300 pesos
Groceries and sundries: 2,500 pesos
Transportation: 400 pesos
Utilities: 1,515 pesos
Personal services: 0
Sports and leisure: 500
Childcare: 0
Clothing: 200 pesos
Apartment: 0
Insurance: 0
Credit card: 0
Other expenses: 0
Comment: “We live very similarly to a middle-class family in Mexico City, which allows me the freedom to pursue the work I much prefer to do.”
Other Findings
- The highest of the 33 expat monthly budgets submitted to EIM was 116,200 pesos, or US$5,131, by an American couple over 65 living in Cabo San Lucas. The runner-up was the younger couple listed as Budget #3 in Puerto Vallarta. Both are indicative of not only higher costs for resort cities in Mexico, but also lifestyles that are closer to what each couple had in the United States. It is fair to point out that both had monthly house payments, one mortgage payment and the other rent. Many expats who own their own homes in Mexico, and pay very low property taxes, have quite low monthly budgets, reflecting the absence of a house payment or rent.
- The lowest budget was found in an unexpected place: Mexico City. Budget #3 had the lowest in all of Mexico, primarily because of home ownership and frugal spending. And, a single American man living in La Paz on the Sea of Cortez, manages to live comfortably on a budget of 13,969 pesos, or US$625, which includes rent. Other low budgets came from more rural areas in Michoacán, Colima and Veracruz states.
- A single American woman retiree in Mazatlán proves that living in a beach resort on the Pacific Ocean does not require a large monthly outlay. Her monthly budget is 17,180 pesos, or US$798. Her one-bedroom apartment with an ocean view is only 4,000 pesos a month, or about US$175.
- Most of the expats we contacted do not have dependents, but two did. Private school tuition for a single American woman in Xalapa, Vera Cruz is 2,700 pesos a month, or US$120 and a married Dutch woman in Cancún reports paying the same amount.
- Clothing costs across the board were generally low, mostly because many expats wait until they return to their home country to buy clothes.
You can also check out these Expats In Mexico cost of living articles for additional information.
