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The Cost of Living In Mexico

Mexico has long been a top destination for American expats and retirees, cherished for its vibrant culture, warm climate, and incredible food. A primary driver of its enduring popularity, however, is a cost of living that is significantly lower than in the United States and Canada. This affordability allows for a rich and fulfilling lifestyle, from exploring ancient ruins to relaxing on world-class beaches, without the financial pressures of living back home.

While Mexico is an affordable country overall, it is important to note that costs can vary dramatically depending on your lifestyle and location. A budget for a cosmopolitan life in Mexico City will look very different from one for a tranquil retirement in the highlands of San Miguel de Allende or a beachside existence in the Riviera Maya. 

This guide provides a comprehensive breakdown of the expenses you can expect, from real estate and utilities to healthcare and groceries, to give you a realistic financial picture of a new life in Mexico.

What Makes Mexico Affordable

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Mexico’s reputation as an affordable destination is built on several key factors that allow expats to live well for less.

Favorable Exchange Rate

For those with an income in U.S. dollars, the strength of the dollar against the Mexican Peso often provides significant purchasing power. While the exchange rate fluctuates, it has historically been favorable for American expats, meaning your dollars stretch further for everyday expenses, rent, and real estate.

Lower Cost of Goods and Services

The general cost basis for locally produced goods, services, and labor is substantially lower in Mexico than in the United States. This translates into a more affordable lifestyle, with lower prices for everything from fresh produce at the local market and meals at restaurants to domestic help and general maintenance.

Proximity to the United States

Mexico’s shared border with the U.S. offers a unique cost-saving advantage. It allows for more affordable travel options for visits back home, including the ability to drive across the border. The shorter distance makes it easier and cheaper to import personal belongings or a vehicle when you move.

Real Estate and Housing
Costs In Mexico

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The biggest expense for most expats when they move to Mexico is housing. However, the market offers many affordable options in popular expat and retirement communities.

Buying Property

Foreigners can buy property in Mexico, and it can be a lucrative investment. Prices vary by location, but a two-bedroom home in the popular Lake Chapala area, home to many American retirees and expats, can be found for under $250,000. 

In coastal regions like Playa del Carmen, modern two-bedroom condos often start in the low $200,000s. It’s important to note that foreigners must use a bank trust, called a fideicomiso, to purchase property in coastal and border areas.

Renting Property

Renting can be a more flexible option for expats. In San Miguel de Allende, a comfortable two-bedroom apartment can be rented for $800 to $1,200 per month. 

In the Lake Chapala area, similar properties are often available for $700 to $1,000 per month. Even in the popular Riviera Maya, long-term rentals can be found for under $1,500 a month for a two-bedroom condo.

Sample Breakdown of Monthly Expenses In Mexico

Your monthly budget in Mexico will include your housing costs and your monthly costs for utilities, food, transportation, and healthcare. Here’s a look at what you might expect to pay.

Utilities (Electricity, Water, and Internet)

Utilities in Mexico are generally affordable. For a couple in a two-bedroom home, a typical monthly budget for all utilities would be between $100 and $180. Electricity, provided by the state-owned CFE, is the largest variable, with costs rising in hotter months due to air conditioning use. High-speed internet is widely available, with plans typically costing between $25 and $40 per month.

Groceries and Dining Out

Food costs in Mexico are low, especially when shopping at local markets. A monthly grocery bill for a couple who primarily cooks at home will generally fall between $350 and $500. 

Dining out can also offer incredible value. For example, a meal from a street food vendor can cost just a few dollars, while a sit-down meal at a local cocina económica is often under $10. A three-course dinner for two at a good or mid-range restaurant typically costs between $40 and $60.

Transportation

Public transportation in Mexico is cheaper and more reliable than you might think. City buses, metros, and shared vans, known as colectivos, are the most common ways to get around and usually cost less than a dollar per ride. For travel between cities, comfortable long-distance buses are the norm with a number of companies offering inter-city services. Some expats choose to buy a car, but gas and running costs can often be higher than in the U.S..

Healthcare Costs

Mexico has an excellent and affordable private healthcare system that most expats use. A visit to a general practitioner in a private clinic typically costs between $30 and $50, with specialist consultations often under $70. 

Many expats opt for private health insurance, with comprehensive plans for a couple in their 60s often costing between $3,000 and $5,000 per year, a fraction of the cost for comparable coverage in the U.S..

Entertainment and Leisure

Leisure activities in Mexico are very affordable. A ticket to the cinema is typically around $5. A domestic beer at a local bar might cost $2 to $3. Enjoying the local culture can also be inexpensive, with free admission to many town squares, beaches, and local festivals.

Sample Monthly Budgets For Mexico

To give you an idea of what to expect in Mexico, here are sample monthly budgets for a couple or single person living in a popular expat hub like San Miguel de Allende or Lake Chapala.

Please note that these budgets are for illustrative purposes only and are based on our own research and experiences. 

Sample Budget for a Single Person

This budget assumes renting a one-bedroom apartment and using public transportation.

• Rent (one-bedroom apartment): $800
• Utilities (electricity, water, internet): $80
• Groceries: $200
• Transportation (local buses/taxis): $50
• Entertainment and Dining Out: $300
• Private Health Insurance (optional): $150
• Estimated Monthly Total: $1,580

Sample Budget for a Couple

This budget assumes renting a two-bedroom apartment and using public transportation.

• Rent (two-bedroom apartment): $1,100
• Utilities (electricity, water, internet): $200
• Groceries: $600
• Transportation (local buses/occasional taxis): $150
• Entertainment and Dining Out: $500
• Private Health Insurance (optional): $350
• Estimated Monthly Total: $2,900

Living Affordably In Mexico

While Mexico is already affordable, you can lower your expenses even further by adopting local habits. Shopping for produce at the neighborhood mercado instead of large, American-style supermarkets can significantly reduce your grocery bill.

Eating your main meal at midday at a local  cocina económica that serves a comida corrida (set lunch menu) offers the best value for dining out. Using local public transport like buses and colectivos is far cheaper than relying on taxis or owning a car.

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The cost of living in Mexico offers an unparalleled opportunity to enjoy a rich, culturally vibrant lifestyle for a fraction of what it would cost in the United States.

The combination of a favorable exchange rate, affordable housing, and low costs for food and healthcare allows expats to live a very comfortable, and even luxurious, life on a modest budget. From the colonial highlands to the tropical coastlines, Mexico provides a financially accessible and deeply rewarding living experience.