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How to Reduce Your Cost of Living in Mexico

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Couple looking over budget
Credit: Focus Pocus LTD | Fotolia

Mexico is widely known for its inexpensive cost of living, making it an attractive destination for expats from around the world. The cost of living for each individual or family, however, depends largely on their lifestyle choices, even in a low-cost location.

If you will be living in Mexico on a strict budget or just want to reduce your cost of living in general, here are a few money-saving ideas that may work for you:

Cuernavaca Street Scene
Credit: Wikimedia Commons

Housing

1.   Consider locations outside of the downtown area, beachfronts, tourist spots and areas with high expat presence.

2.   Try to rent or buy direct from the property’s owner. You can travel around your area of interest and look for notices that say “trato directo” and call the number listed.

3.   Search for properties priced in pesos that are not necessarily targeted at expats. While no one can guarantee future exchange rates, many expats who earn in U.S. dollars find it cost effective to pay rent quoted in pesos at the current exchange rate.

4.   Find your own public attorney to save on legal fees as attorney prices vary. If you are using services of a real estate agent, you may have to use the attorney recommended by them.

5.   Consider sharing a house, if that suits you.

6.   You can also build a ‘Tiny Home’ in Mexico with shipping containers, as in other places. There are several companies offering comprehensive Tiny Home services.

7.   Look for a smaller place that would help lower your home expense.

Utility Bills

1.   If you are a homeowner, consider using solar power given the abundance of sunshine in Mexico. While the initial investment can be high, the subsequent paid electricity usage would be minimal.

2.   Usually, the costliest appliance in terms of electricity usage is the air conditioner. As you acclimate to the weather in Mexico, you may be able to replace some of the air conditioner usage with a fan.

3.   Hang your clothes outside instead of using a dryer during warm weather, which is all year long in some areas of the country.

4.   Turn off the water heater and take some cold showers during warm weather.

5.   If your electricity bill is high, you may be falling under the Domestic High Consumption (DAC) category. Check with the electricity company in your city to ensure that you are receiving the domestic (Hogar) rates and that your meter is working properly.

6.   Search for rentals that include utilities. Some may include Internet service, cable television or other extra expenses.

Seafood stew served in La Paz, Mexico
Credit: Jack Hamilton

Groceries and Food

1.   Buy from local markets and shops. We usually drive out of the city every now and then and buy items such as fresh produce, honey and eggs from local sellers. In some areas, there are small sellers who do home delivery of fresh produce and even seafood! Buy in bulk when possible for further savings.

2.   Imported food from your home country will be more expensive, so look for local substitutes when you can.

3.   If you have a backyard or a small garden, grow some of your own food. The climate just about everywhere in Mexico is great for growing almost anything.

4.   As in any other country, remember to sign up for reward programs and memberships at supermarkets and stores, where available.

5.   You can reduce your out-of-home dining expenses by frequenting local neighbourhood restaurants rather than popular tourist restaurants.

Transportation

1.   Fuel prices vary by location, even within a city. Top-up fuel at a cheaper gas station. We top-up our fuel from just outside Mérida’s city limits. Some gas stations even offer complementary oil check-ups.

2.   Mexico has good long-distance bus services across different regions and routes. If you buy tickets (online) in advance, they will usually be cheaper than buying at the counter. If you are flexible with your departure time, you can book buses at less busy hours with larger discounts.

3.   Local public transportation may not be the most comfortable, depending upon where you live, but it is very inexpensive.

4.   Uber generally is cheaper than regular taxis and are widely available in many city areas throughout Mexico.

5.   Join a car-sharing platform or a social media group if you are comfortable with sharing your own car or someone else’s car.

Insurance

1.   Check with your insurer if paying upfront for a year or six months will be cheaper than paying monthly. We received a discount for paying our car insurance every six months. You can go to the insurer direct instead of consulting a broker.

2.   Shop around for private health insurance policies to get better prices, and to make sure your requirements are met. In this case, a broker might be useful in comparing policies and choosing the best value for money policy for you.

Comitán Pueblo Magico in Mexico
Credit: Super Lapin

Sightseeing and Entertainment

1.   Visit historic sites on days that are free for residents of Mexico, where available. For example, the adult entry price at Chichén Itzá when we visited in 2020 were 481 pesos for foreigners and 202 pesos for Mexicans.  But entry was completely free for all residents and citizens on Sundays. Similarly, some attractions such as museums, have discounts for residents of the area.

2.   Find local tours at the destination unless they must be reserved ahead. For example, when going on boat tours or snorkelling tours, locals with their own boats on the beach tend to offer lower prices than organized tours. We did this in Puerto Vallarta and Yucatán, and even received customized tours.

3.   Mexico also has plenty of free street entertainment and festivals.

Personal Goods and Personal Care

1.   International brands are generally expensive in Mexico. Check the local shops and online stores for better prices. If you plan to buy items from overseas, research the import rules, including taxation, and the reliability of the delivery method in advance.

2.   There are English libraries in some cities if you prefer to read physical books. English books tend to be expensive in Mexico. Consider buying eBooks.

3.   Join the social media marketplaces of your area to buy personal or household items at a discount. Craigslist, for example, has listings for 16 cities.

4.   Unless you must go to a gym, outdoor workouts are healthy alternatives given the warm weather in most places and the availability of parks, beaches, places to hike, etc.

5.   Beauty salon and spa prices vary widely. Consider using different places for different services based on your requirements and concerns. For example, a cheaper place for a basic hair trim and a place that uses high-quality products for a skin treatment.

Other Expenses

1.   Applying for temporary or permanent residency on your own can save you several hundred U.S dollars of agent fees. This would, however, require a basic knowledge of Spanish, multiple visits to the Instituto Nacional de Migraciόn (INM) and waiting in line. The INM officials are helpful and will advise you on any missing items or issues with the documents. Any changes to circumstances such as change of address, marital status, etc., that you subsequently need to update with the INM are free if you submit them yourself.

2.   Similarly, you can register vehicles, get driver licenses, obtain tax IDs or attend to other activities with local authorities on your own. If you must use agents, accountants, or other service providers, shop around for quotes and remember to check their reviews.

Useful Tips

Join the social media expat groups in your area.
Expat groups are a great way to get contacts and recommendations for any product or service and learn from the experiences of others. These groups also have members who are local service providers.

Importantly, knowing some Spanish will help you access local prices, avoid the cost of intermediaries and make your daily life easier in general.

EIM also has additional cost of living articles that may help you.

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