How much does it cost to live in Mexico? We know from numerous studies that the cost of living is one of the top reasons why expats make this country their home. Depending upon where you live in Mexico, the cost of living can often be more than 50 percent less expensive than your home country.
In our article “The Expat Cost of Living in Mexico” we brought you insights from Gerardo Robledillo, the founder of Expatistan, a crowd-sourced cost of living website for expats that we feature in our cost of living sections for each our cities, along with Numbeo, another crowd-sourced cost of living website.
But recently we had the opportunity to speak with Tim Leffel, author of “A Better Life for Half the Price: How to prosper on less money in the cheapest places to live” and a former resident of Guanajuato who still owns a home there and plans to return to Mexico within the next several years.
Leffel is a seasoned journalist who has circled the globe three times in search of the best places to live on less money. We asked him how Mexico stacks up against other countries in the world for cost of living.
“Well, it’s not the absolute cheapest place on earth mainly because Mexico is not the poorest country on earth,” he said. “You can go to some places in Latin America where your costs may be a little lower, like Nicaragua or Guatemala and even Ecuador in some spots. I think it’s pretty easy, though, for most people to cut their expenses in half just by crossing our southern border and moving to Mexico. Plus you can get to Mexico very easily.”
When Leffel began looking for a place abroad he looked at other countries in Latin America but decided on Mexico because of the food and culture and its proximity to the U.S. He said most people do not realize that the cost of living in Mexico depends so much on where you live.
“If you live in Cabo San Lucas you’re not going to see much of a savings because it can be just as much as it is to live in California,” he said. “It may be a better value for your housing dollar but it’s still pretty expensive when you go out to eat because it is a tourist town. You’re just not going to get as much of a savings as you would if you go to the interior of the country.”
Expat areas like San Miguel de Allende and Lake Chapala, although inland cities, may be more expensive, Leffel said, because they have been favorites for decades and have well-developed social infrastructure for expats. He suggested expats consider more secondary cities like Guanajuato, Querétaro or Zacatecas, to name a few, for a better deal.
We asked Leffel to name three cities in Mexico where expats could get the most bang for their buck.
“I don’t want to encourage lots of people to come to Guanajuato,” he said, “ because my fellow residents are going to be angry with me. They like it just the way it is. So, I would recommend Lake Chapala because you can get a nice house with a garage and a decent amount of space for a good price and it’s quiet there. I also like San Cristóbal de las Casa in Chiapas and Oaxaca, which has a beautiful historic center and lots of great music.”
Leffel said you could live less expensively in Mexico if you are adventurous and learn the language, which opens many options for you beyond the well-known expat centers on the coasts and major inland cities.
Expectations also play a major role in how you will perceive the cost of living in Mexico.
“If you’re coming from New York City and moving to Mexico City,” Leffel said, “you’re going to think it’s the greatest bargain on earth. But if you’re moving from some small town with one traffic light, then it might not seem such a bargain. The same is true of the resort cities. If you move from Miami to Puerto Vallarta, it’s probably not going to seem that expensive, but coming from a small town in America or Canada, it will seem expensive. But, there are lots of costs that are universally less in Mexico no matter where you are from.”
The lifestyle you want to live in Mexico also plays a major role in the overall cost of living equation.
“I think if you are trying to live the exact same life you had in the U.S., you’re going to spend more than someone who is willing to adapt a bit. Imported goods, electronics, expensive appliances and large homes with three-car garages are all luxuries that will drive up your cost of living in Mexico. A lot of people want to live a Mexican life when they move to Mexico, but really just live their U.S. life, just in a different place.”
Living inland away from the hot and humid coasts and torrid deserts will have a big impact on your utility bills, Leffel said. Electricity costs in Mexico can be steep, which expats in coastal cities know all too well. Inland cities at high altitudes, like Leffel’s Guanajuato, have low utility costs because of year-round mild climates that often do not require either air conditioning or heating.
Leffel acknowledged that the big saving for expats comes in the form of lower housing costs, whether you are buying or renting a home.
“I think real estate is usually the biggest saving because that’s where people in the U.S and other countries spend the bulk of their paycheck,” Leffel said. “You can rent a two-bedroom house in Mexico for US$700 or less in many cities.”
Rents, of course, vary by location, type of property and amenities but generally are significantly cheaper than in the U.S. and Canada. Homes for sale are also much less, but again, how much you save depends upon where you are coming from and where you move. That three-bedroom, three-bath home in Puerto Vallarta will cost significantly less in Guanajuato.
Healthcare is another bargain in Mexico. If you are self-employed in the U.S., Leffel said, you might be spending 20 percent of your income on health insurance. Hospitals, doctors, dentists and health insurance are all significantly less, as much as 50 percent less than what you would pay in the U.S.
Entertainment and food costs are also lower in Mexico, even in the expensive resort cities on the coasts.
“Going out to eat and entertainment are definitely a whole lot cheaper in Guanajuato,” Leffel said. “I go to the symphony for less than US$6 at a beautiful historic theater, for example. It’s also pretty easy to find a good meal at the marketplace for under US$8.”
One way some expats cut costs is to forego an automobile. Buses and taxis are plentiful in expat areas and very inexpensive. The addition of Uber and Lyft in many cities also has made life easier. And travel between cities is super comfortable and inexpensive thanks to Mexico’s superb premium bus services.
But when you boil it all down, it really is about happiness. Can you be happy living in Mexico on less money?
“I know plenty of people who are living on the equivalent of social security, which is often about US$1,200 a month,” he said. “They’re living quite well in Mexico. As a comparison, we spend the same amount for rent a month in Tampa, Florida for a three-bedroom place downtown in a good school district as we spent on everything when we lived full-time in Guanajuato, which is about US$2,100.”
We asked Leffel to provide a few money saving tips for expats. He told us the most important tip is to live like a local and avoid spending money on expensive imported food, electronics and other goods and services you may have been used to buying back home.
“Making a few adjustments to your habits can make a big difference in your cost of living in Mexico,” Leffel said.