Thursday, July 08, 2010

living on pesos

I am not an expert on anything in Mexico.

At best, I have a few Cartesian experiences.  The type of life events that make me start wondering if I live in the same Mexico described by my fellow expatriates.

Let's talk money.

The first question my friends asked me about living south of the border is: How much does it cost to live in Mexico?  The question is a cue for me to channel my fifth-grade teacher.  "What does it cost to live in your home town?"

Of course, the response is disingenuous.  I know what they want to know.  Whether they can save money living in Mexico.

And that is easy to answer.

If you want to live with the same conveniences you have in your American suburban house, you might be able to save some money in Mexico.  But not much.

On the other hand, if you are willing to live as your Mexican neighbors do, you can cut your expenses -- a lot.

Comfort costs.  More comfort, more cost.  Fewer comforts, fewer costs.  As the scale slides up, the pesos start migrating out of the pocketbook.

I thought of that scale while reading another survey from the International Community Foundation: U.S. Retired Trends in Mexico Coastal Communities: Lifestyle Priorities and Demographics.  Hardly a title to keep you awake on a late Wednesday night.  But it makes some interesting assertions.

According to the survey, "44% of Americans residing in Mexican coastal communities were able to live comfortably on less than $1000 a month for household expenses."

I found both numbers astounding.  We are talking about coastal community costs here.  With over half of the respondents living in Baja -- not well-known for its low costs.

My experience tells me something is wrong with the figures.  Starting with rent.  Mine is $800 -- four blocks from the beach.  Telephone/internet is $32.  About the same amount for the maid.  Groceries run about $200.  Automobile expenses run about $300 a month.

And that does not include eating out, travels, and other related expenses like entertainment.  Obviously, I am not in the 44%  Not even close.

And I am not certain how many people really are in that category.  People have a tendency to underestimate costs when they try to calculate without bills in front of them.  And those who own their own homes do not have to worry about my largest expense: rent.

But there is another factor.  Expatriates love to one-up each other on how little they pay for anything.  No big ones that got away.  Not here.

It often reminds me of the Monty Python Four Yorkshiremen routine:

Right. I had to get up in the morning at ten o'clock at night half an hour before I went to bed, drink a cup of sulphuric acid, work twenty-nine hours a day down mill, and pay mill owner for permission to come to work, and when we got home, our Dad and our mother would kill us and dance about on our graves singing Hallelujah.

You know the type.  Has lived in Mexico for 35 years on an FMT.  Has never paid more than 5 pesos for a meal.  Knows every village chief of police for kilometers around.  And was personal friends with Matisse while curating a Santa Fe museum.

But maybe that is just my experience.

Not everyone who claims to live on a small amount of money in Mexico is spinning a tale.  I know several people who survive solely on their social security benefits.  But they also live Spartan lives.  And they are constantly in danger of being ineligible for an FM3 visa.

I tend to fall in the middle of the comfort scale.  Being almost Aristotelian in my moderation.  So, I spend more than $1000 a month on household expenses.  But not a lot more.

When I return in November, I am going to keep a better eye on my expenses.  If for no other reason than being helpful in answering people who want to know how much it costs to live in a small Mexican fishing village by the sea.


norm said...

Nice post. I stuck my toe in the water last spring and found that you could go through some cash living in Latin America. What I found was that I spent about 80% of my Ohio costs but that against the fact that my standard of living is much higher in Ohio, bigger house, better cars, more privacy. I know I can do much better in the way of costs. I lined everything up over the internet, I rented cars, I was on the road half the time and yet still had to pay the rent on the condo, I paid twice for many things. My wife Linda is still working so it is too soon to make a real jump out of our little pond. I liked your post, straight up information on living in Latin America.

el jubilado said...

82.7 of those people owned their houses so not paying rent

$800us is a lot ... more like a seasonal rate

Anonymous said...

I'm sure if you were renting year round in a rental as opposed to renting in a "vacation rental" your cost for houseing would be considerably less.

Just a thought...

- Mexican Trailrunner said...

Wow, you pay a lot of rent. Is that the house in the picture? It's really a nice house, I see why.
It's quite a bit less expensive here in the highlands. Well, except for Ajijic and all the other Gringolandia spots. Fortunately, I can live several miles away from that and yet still have the amenities if I want by driving in. Or not! Best of both worlds.
The beaches are more expensive, in Sayulita everything cost more. If I could take the heat, I'd move back to the beach or the Yucatan.
Thanks for the rundown, I think I'll do a similar post from the highland perspective.
Buen dia.

Anonymous said...

interesting post and i know just what you mean. when i went to chacala by myself, i paid $300.00 a month in rent but it was for a single room with a kitchen on the patio. the following year when i went with the guys, we got a very nice apt. 2 bedrooms, full kitchen and a pool and paid $1,300.00 a month. it depends on what you're looking for. i know that's a lot but it was worth it. when steve and i retire, we could probably make do with something closer in rent to the first place i stayed at. then again, who knows how much things will cost 6 years from now.

i love that picture. is that in melaque?


Tancho said...

Gee Steve, I had to run and get my glasses reading your first line of your Cartesian experiences. I thought it was courtesans and was going to be a juicy story...then I put my spectacles on ...
You are almost correct on your outlook except that many new visitors are in a hurry to find living accommodations that they pay way too much.
Not saying that your abode is too expensive, BUT $800 dollars is a lot of rent.
Even in the US that is a pretty decent amount in a lot of locations. Mexican landlords are crafty when it comes to vacation properties or renting to Gringos. As you say one can survive quite well and cheap as long as they are not longing for A/C Satellite TV, cars and insurance. When you finally plop down somewhere permanent you could experience a very comfortable modest life for less than 1K per month, including going out to meals quite regularly.
It's those tourist areas on the coast that cost 50% more than decent places in the country. So work some more, save some more money and keep stimulating the economy down here, but not too much or you will ruin it for the others. Too much of a good thing sometimes is not good. But you know that, I just had to say that! And well talk about the courtesans at another time.

Anonymous said...

You Dickensian reductionist, You!

All of life now comes down to this mean calculation, huh? Five pounds credit, happiness. Five pounds debt, unhappiness.

Get hold of yourself, Man, before it's too late!!!


jennifer rose said...

Let’s see what expenses you’ve forgotten about during your year in Mexico:

Mail forwarding
Computer replacement
Medical care. Yes, add in the cost of your ankle surgery, which would’ve cost about the same as a good private Mexican health insurance policy
Donations. Whether made to a church, the Red Cross or Save the Whales, the grocery sacker-upper, or Postman’s Day, it’s another cost of living.

During the first few years, particularly the first year, expats are often willing to go downscale, doing without in the pursuit of living like some kind of noble savage. As tenure in Mexico increases, there is an urge to raise your standard of living. Suddenly living in a cinderblock studio isn’t as quaint and endearing. You’re no longer enchanted by those Mexican neighbors who didn’t finish primaria, God bless them, and you decide to start living like Mexicans whose social class and educational level is comparable to yours. Health clubs, travel, buying clothing at Liverpool instead of the Tuesday market. Maybe a subscription to the newspaper. There goes another iPod, and it sure would be nice to have that 2 T. external HD now from Costco instead of putting it on the wish list from the Otro Lado. Oh crap, the maid’s pregnant, and now there’s not only the aguinaldo and vacation to pay but also her medical expenses and paid maternity leave.

Dentist, drugs, and now you need new glasses, and Devlyn’s two for one special isn’t that special. That equipal sofa is no longer comfortable, and damn it, you’re going to break down and buy something that is. You finally get fed up with that stove that won’t simmer, so you break down and buy something that will.

Joe S. said...

Excellent topic Steve, since so many of us work so hard and long for the money, living expenses are always interesting. I was under the impression that your landlord(s) were of NOTB persuasion, am I incorrect?

Tancho said...

Ah, Jennifer brings up good points, don't forget the replacement of glass, whether it be a desk top, car window or house window that somehow got broken, then there is the maintenance on the house that unexpectedly comes up, water filters, or water jugs if you don't drink your water, then when the water source is interrupted an occasional water truck deliver, the gas tanks need gas, and because the topes are abundant more shock absorbers and springs. Don't for get couple of hundred bucks for your immigration fees.
So....I think you could live about as inexpensively in the states, somewhere like either the sticks in Florida or Tennessee. But then again you wouldn't have the "charm" of waking up every morning for fresh squeezed orange juice for pennies....

Nancy said...

Jennifer is right on! So true and so well written.

I agree that your rent is a lot. Here in Mazatlan $400 for a gringo-ish place within 4-5 blocks from the beach. And $300 for car expenses seems like a lot, too.

But we also spend a fair bit on eating out, entertainment, mail service, toys, and travel. My health insurance is $1000US per year and Paul only has Medicare. We fill our gas tank up once a month probably. Not having rent or a mortgage is a big thing although house maintenance isn't small.

I love all the interest this topic always brings out!

NWexican said...

Ouch, your rent scares me....
Oh yeah, you're a lawyer and can afford it..

Anonymous said...

Dude, I am bleeding pesos right now, but we are building in one of those ridiculous locations in Guanajuato.

We are a young couple, we work remotely, and I usually tell people that for me, living in México is roughly equivalent to getting a 30% raise. plus, we can claim the foreign income tax exclusion which saved us a ton.


Bob in exile said...

Steve... good article... How much does it cost to live in Mexico?? Depends on your lifestyle and how many bad habits you have.
I have to agree with the other expats though , your rent is too high, unless you live in a Hacienda overlooking Acapulco bay.
Your right live like a native... thats really hard to do for 95% of the means assimilating.
My wife & I live on $1200 bucks a month but we own our own home, even so theres the water, gas, electric, land tax & maintenance expenses and its not free. But it still beats the hell out of paying rent.
Here in Tlaxcala I see 2 bedroom unfurnished houses in decent neighborhoods for $2000 to $3000 pesos a month.
Its hard to really figure costs sometimes but my rough estimate is I live on about 35% of what the same lifestyle was costing me in the States.
Also I only use public transportation and all my medical expenses are zero because I figured out how to get into the Social Security System here.
Anyway keep on blogging, we are the only real contacts outsiders have. Getting a book called living in mexico on $20 dollars a day want work.

Leslie Limon said...

Wow! 800 dollars for rest does seem like a bit much. But that's only because we pay 600 pesos for both the house and shop. :)

Leslie Limon said...

Oops! I meant rent! So sorry! :)

Calypso said...

Steve - A dicey subject.

We own two modest places and rent a 2 bdrm, 2 full bath house with lots of parking for 2200 pesos a month. The house was new when we moved in and lacks nothing relative to U.S. housing except perhaps a hot water line in the kitchen (for some reason they only ran a cold water line???).

There are things less and more here as it would be anywhere - but in our area it is pretty safe to say you will live equal to U.S. style for 20-30% less in Veracruz.

Medical is a whole lot less as is some maintenance like car service and housing maintenance. Probably a factor of 10.

$800 bucks for rent can be spent here - but it is top of the line and equal facilities in the U.S. would be 2-4 times.

We do not live on the coast - but it is beautiful here and I am not a lawyer ;-)

Steve Cotton said...

Norm -- I am convinced if an expatriate wants to create an American lifestyle in Mexico, it can be done. But at a cost. If you want it, Mexico can provide it. I doubt I would ever get any of my former girl friends to live the life I live in Mexico. But it is good enough for me.

El Jubilado -- Being a former neighbor, you know the rental oddities of my small fishing village by the sea. I just need to break out of the gringo shell -- while avoiding certain agents.

Anonymous -- I am getting a year-round rate on my current rental. But we will see what I can do when I venture inland.

Mexican Trailrunner -- There is a premium for living by the sea. My rent has been about the same in both of the places I have lived in Villa Obregon.

Teresa -- There is always a wide range of places to rent. I rented this house because I like the land lady and her friends. For me, relationships trump cost. The little house is actually in La Manzanilla. Our friend in Manzanillo stayed there during her language classes.

Tancho -- Courtesans, eh? Now that would be a post to share. I shall give it some thought.

ANM -- Good grief! Are you doing your Beadle Bumble impression these days? In public?

Jennifer -- Your points are well taken. I have the luxury of living a life of serene bachelorhood. Like most of my ilk, I can easily be happy with the type of living we imagined in our youth. Of course, my hippie dream now includes access to imported foods, symphony orchestras, and museums. Being NOB for a few months has reminded me of those things. In Mexico, I try to find substitutes.

Joe -- My land lady was raised in the United States, but she is now a naturalized Mexican citizen. By the way, you were one of the people who initiated this post.

Tancho -- Great point. Cost is not everything. There is the charm of Mexico.

Nancy -- This is one topic that never fails to bring out the best in readers.

NWexican -- But the place is well worth the expense. You would be shocked to see the rent for houses right on the beach. Almost Oregon prices.

Sam -- I would be interested in hearing more about your building venture in Guanajuato. It is on my list as a possible spot for a long stay.

Bob in Exile -- I could save a lot by getting rid of my truck. But I still have a lot of exploring to do in Mexico. And, as long as I keep my plan of moving every 6 months, getting rid of it would simply build a whole new set of costs.

Leslie -- I suppose rest at $800 a month would be a lot, as well. I am certain I could find a nice place for less than what I pay. But it will do for now.

Calypso -- One of these days I need to get over to your part of the world.

Ron said...

Thanks for the posts and all of the comments.

My best estimate, drawing on folks who live in Yucatan state, is that a pretty decent expat life can be had for housing costs + about USD$1,500 a month.

I also check out the annual cost of living article in that Lake Chapala newsletter - the range is quite large - as it is anywhere I have lived.

Babs said...

I think I'll throw my 2 cents worth in here at the end. I plus lots of single women live here in SMA without lack of creature comforts. I do it, with rent, at $1200 per month which also pays for US insurance plus Mx car insurance. Had lunch on Thursday with two women who live on much less then $100 a month - one on $700 a month and pays rent while the other owns and lives on $600 a month. Comfortably.
The things Jennifer mentioned such as an IPod and HD and other such things, I never wanted in the USA so they don't matter now. The Tuesday market shopping is WAAAAY more fun then any retail store in the USA. So, I guess embracing the Mexican life is what makes it all worthwhile. If you want the USA stuff - stay there.
BTW, if you look at Craigslist for Mexico and San Miguel, you'll be amazed at the nice places for $400 a month and up here! Truly.

Anonymous said...

Interesting topic. I'd again guide anyone interested to UBS's Semi-Annual Survey of Prices and Earnings, which compares the relative costs of living in various cities around the world. This is done in a scientific manner, and thus can reasonably be relied upon.

Do a Google search on UBS "Prices and Earnings" and you'll find it straight away.

But the larger point is that the cost of living depends highly on what you want and where you live. Ask someone in New York City, Boston, or San Francisco how much it costs to live in the USA, and you'll get a very different answer than if you ask someone in Fayetteville, AR, Duluth, MN, or Lake Charles, LA.


Kim G
Boston, MA
Where it costs plenty, but it's nice.

P.S. Congrats on the new format. Nice!

jennifer rose said...

Oh boy, here we go with "Live like a Mexican" again. Why is it that Estadounidenses harbor this image of a Mexican lifestyle as quaint and simple? Yesterday as I drove to Las Americas, I noticed that my 2008 Malibu looked sort of old in comparison to everything else on the streets. And even more so once I hit the parking ramp. Over at Sears, I am looking for a new stove. $26,000 MN for a new, made-in-Mexico Mabe stove? I guess at that rate, they're not going to be selling many to Estadounidenses. A nice leather loveseat, about the same price. The stores wouldn't be carrying this merchandise if people were not buying it, and all of us Mexicans can't be narcos.

Swimming at Seven Days, $1700 MN for 6 weeks.

There goes the budget again.

Steve Cotton said...

Ron -- I could easily live in Oregon for housing costs +$1500 a month. Or, at least, close to that. I just prefer doing it south of the border.

Babs -- You seem to have developed a talent I lack. Of course, that could be a never-ending list.

Kim -- Exactly. Our choice of where we live dictates a lot of our costs. But our choice of how to live dictates even more. I find when I return to Salem, I start buying things I would never consider buying in Mexico.

Jennifer -- That is why you live in Morelia. You feel far more comfortable in that environment. Of course, I probably would, as well.