October 3, 2018
Perhaps the most frequent question we are asked living in Mexico is just how expensive it is, and if one can survive on a Social Security budget. I am happy to report that after two years we have a pretty solid understanding of costs, and living on a budget in Mérida, Mexico is not a problem.
The first consideration for living anywhere is housing. You can expect to pay rent between US$300 - $500 per month for a nice two- or three-bedroom house if you do a bit of research. Renting through American websites will be more expensive.
Like most foreigners we know here, we chose to purchase a house almost immediately. We do not regret that decision, as housing prices have escalated rapidly, and if we had waited, it would have been difficult to find an affordable property that met our needs. Since the cost of the purchase and renovations are a capital investment, they are not included in the costs shown. But even owning a house comes with expenses.
Since most of Mérida lies in the restricted zone, Americans can only purchase property through a Fideicomiso. This bank trust comes with annual fees, determined by the bank. Ours is through Scotiabank, is paid annually and amortizes to about US$36 per month depending on the exchange rate. Our property taxes doubled this year (because our renovations were legally permitted), but even now come to only US$208 a year, or just over US$17 per month.
We hire local assistance for maintenance and upkeep. For having our house cleaned once per week we pay about US$102 per month, which includes a nice tip - and we provide lunch. The pool service comes weekly as well, but there are additional costs for salt and chemicals, and we budget for periodic repairs to the system. Gardeners come once per month. These services combined run about US$74.
Because we installed solar panels on our roof, (something that has fallen in cost since our installation) our electric bill is not as high as many, even though we run air conditioning 24-hours-a-day in the music room to protect the instruments.
Houses here retain a surprisingly moderate temperature due to the concrete construction, so our usage is limited to hours when we are sleeping, and rare occasions when the afternoon does not cool down so quickly.
Electric bills come every other month, and usage in the summer is subsidized by the government. The amount of subsidy is determined by zone. Mérida, with its intense summer heat, is in the zone of highest subsidies. Our electric consumption averages $32 monthly.
We have a well from which we fill our pool and sprinkle the gardens during dry seasons. For the house we have a water softener, and for drinking water, a reverse osmosis system. Our water bill is $180 pesos every two months, or around US$9-$10. We use gas only for cooking. A truck comes and fills the tank on the roof. We pay about US$35 for this service. After eighteen months of daily use, we still have four-fifths of a tank, so the cost is minimal.
Equally essential are communications: telephone, cable and Internet. One might divide these between competing companies, but service is not always the best in some areas, depending on the company. We use Telmex and limit our Internet speed to 50 mbps. Our service is excellent. For this we pay US$32 per month, which includes a land-line telephone we never use.
Our cellphones DO get extensive use, and our plan through AT&T includes unlimited calling in Mexico, Canada and the U.S. for $28 per month for two phones. This was an introductory rate, and the amount will increase in the coming year, but it will remain affordable.
Our largest expenditure is food. Mérida has many excellent restaurants, and friends who have compared the cost of eating at home and eating out claim to see no difference either way. There are restaurants where you can feed two at lunch for as little as US$6 - $7, but I like to cook at home, and when we dine out we prefer better restaurants. Still, our restaurant budget is never more than US$250 per month.
Fresh fruits and vegetables at the mercado a half block from our house are ridiculously inexpensive. I can buy enough for a week for no more than US$10 - $12! There is also a Super-Aki market and numerous specialty stores nearby, so we need trek to Costco, Soriana or Chedraui (big box stores) only a couple of times per month. Our monthly cost for groceries is between US$500-$525. We could easily decrease this amount, but this is an area where we choose to splurge.
We both carry medical insurance, Marshal through IMSS, the upper tier of Mexico’s socialized medicine, and I through a private company. The two policies combined cost US$1,558 per year, or about US$130 per month. My policy has a deductible; Marshal’s is all-inclusive. Some people forego insurance and just pay out of pocket, since costs are quite low. My policy covers me anywhere in the world except the United States. When I travel to the U.S. I buy a separate policy for those days.
There are also dental expenses. Since arriving in Mexico, I have been able to have a host of dental issues addressed. Cleanings are US$25 each, and visits for other procedures are similarly inexpensive. In total, we spend about US$80 per month on dental costs. There is talk afoot about blending the two tiers of Mexican healthcare, so it is difficult to predict how this might impact expats.
On first arriving in Mérida, we used über to get around. It is inexpensive and efficient, but limits the ability to explore different areas at will. After six months we purchased a car that would accommodate my smaller harpsichord for transporting to performances. Gas in Mexico is not cheap, and it is rising quickly. We spend about US$65 per month on gasoline, and maintenance and repairs average out to perhaps US$20 per month. Comprehensive auto insurance costs us $US45 per month.
Miscellaneous expenses would include my monthly haircut at US$6, and new clothing, for which we seldom have need, yet budget US$25 just in case. We opted not to purchase a washer or dryer, as these rust quickly in our humid climate. Laundry facilities are abundant. We use one of a dozen local laundries, chosen because they do not send the clothes out. Ours has machines on site and they wash without perfumed detergents, to which we have allergies. They fold everything and hang the shirts. We pay about US$18-$20 per month for laundry. We occasionally have shirts ironed at a laundry around the corner for about thirty-cents per shirt.
As for house repairs, they are much less expensive here than anywhere I have ever lived, which includes eight states and three foreign countries. We just had an electrician out to rewire a hot-water tank and it cost about $17. Try to get an electrician to your house in the US for less than $100!
Being retired, we attend far more concerts and lectures now than we did in the US, and we like to go to the cinema occasionally. Tickets are inexpensive, with good seats to a concert no more than $10-$15. Our INAPAM cards often get us a discount, and many events are free. We both also read a lot. Books in Mexico are costly, yet our monthly expense for entertainment related costs is never more than $120.
The final tally? We live on about $1725 per month, slightly less than one of our Social Security checks! The other we use for travel and emergencies!
Housing - $53
Maintenance - $176
Utilities - $49
Communications - $60
Medical - $210
Food and dining - $827
Entertainment - $120
Transportation - $130
Miscellaneous - $75
TOTAL - $1700
As I write this, inflation is taking a bite out of Mexican budgets. Rents are rising, as are the costs of food and basic necessities. This past year electrical rates were seriously increased, and there have been protests throughout Mexico in response. For this reason, it is essential to maintain a cash reserve, and I would never recommend to anyone to make such a major decision or move without factoring in a contingency plan.