One of the biggest questions we get asked is “can I afford to live there?”
Of course, no one can answer that question very easily, because you’re the only one who knows about your particular circumstances.
If you’ve come this far in your search, by now, you’ve probably read that Mexico has a lower cost-of-living (generally 30-45% less than that in the U.S. or Canada.) I’m sure you’ve also heard about those how-to-retire books that claim you can live in Mexico on $400 a month. We think those claims are a little reckless…you may be able to live an existence here on that amount of money, but we don’t believe you can have a decent lifestyle. We believe that to have a good lifestyle here the more honest range is between $1,200-2,300. Of course, it is obviously cheaper to live as a single than a couple. You also have to consider whether you will own your own home or pay monthly rent.
Choose a higher standard of living
Of course, it goes without saying, the higher your monthly income, the higher your standard of living, as is true anywhere.
It also depends on your lifestyle choices and social activities. It depends on how important things like satellite TV, wireless Internet service and cell phones are to you. Are you a homebody, or do you like to travel? It’s all in the choices you make.
Choose a more affordable lifestyle on a budget
Here are a couple of questions we can answer; however, with the gracious help of a couple we’ll call John and Jane Smith…“What’s the cost of utilities?”…”What are your monthly expenses?” Here’s their budget and how they manage their money at Lakeside. The only thing we have to say is ‘where were you when we needed you?” Since Jane is too young for social security, they have worked out their finances to where they are able to live well on one social security check.
Therefore, if you are really getting tired of the corporate rat race, and starting to wonder… what does it really cost to live in Mexico? Can I afford to live there…now?
Here’s how one couple made the change quite comfortably.
We were not rich, but together we got great salaries in the States. And, since we were both paid every two weeks, on opposite weeks, it seemed as if every time we turned around, there was another check! We never, ever worried about money and pretty much bought what we wanted when we wanted it.
When we decided to come down here, we made the decision to live on John's social security only. We wanted to make sure we could live on that and not dip into any savings, IRAs, etc., because it would be another five years before I would be eligible for social security. It was a balancing act. We certainly didn’t want to run through the money we had been able to save over the years, but we also wanted to live the fabulous life we had heard about in Mexico in our golden years. We wanted it all! We had decided to go ahead and retire, because we were just really tired of the rat race in the States. John and I had worked fairly steadily since we both turned 16! We figured we were due for a rest, and thought, based on our prior research of Mexico, we could make it comfortably on John’s social security check.
The first couple of months, just living on John's social security, and not used to getting only one check a month, we spent so much money the first two weeks, we were sitting around the house for another two weeks, waiting for the check to come in. It was pathetically funny! We just had never had to budget before, and, because of that, had pretty much turned into compulsive shoppers, with the absolute top-of-the-line, best of everything!
We decided for our sanity and security, we had to make a budget. So here’s what we did.
When we get John’s money direct-deposited into our Stateside account, I immediately go online and get into our PC banking account and divide it like this:
I pay ourselves and my Visa account first:
$100 transferred to our Money Market Account
$100 transferred to our Visa account
Next, I take all of our monthly money needs (telephone, electrical, Mail Boxes, etc., and so on) and annual money needs (Health Insurance, water, car insurance, Lake Chapala Society dues, FM3 renewals, house taxes, etc.) and put them in our savings account, only transferring them as we need them into our checking account. That way I'm always sure we're going to have money available to pay all those important end-of-the-year bills.
This is what goes into the special savings account every month.
Fixed Monthly Expenses: Paid Monthly
Dish TV: $63
Cleaning Lady: $80 (twice a week, five hours a day, approximately $100 pesos per day)
Propane Gas: $35
Electric: $50
Auto Insurance/2 vehicles: $80
Mail Boxes, Etc: (1/2): $14 (we share our post office box with another couple, so we each pay half.
Phone: $50 (including Internet)
Fixed Annual Expenses Deposited Monthly, Paid Annually:
Lake Chapala Society dues: $4*
FM3 renewal: $50
House Taxes: $5*
Health Insurance (IMSS): $50
Annual Water: $5*
*I know this probably looks ridiculous to add these seemingly small amounts to our monthly figures, but we budget so much per week for our living expenses, and these three 'bills' come due around the same time. Therefore, it would take quite a chunk out of our living expenses if we hadn't put them away month-by-month ($48+$60+$60!)
After I put this money out of our sight (in a savings account), I take everything that's left over and divide it into four or five weeks depending on when the next social security check comes through.
I then set up Scheduled Transfers through our PC Banking, so that every Monday we “get paid." We know we can only spend that much per week. That’s the money we use for our groceries, for eating out, for any entertainment, etc., each week. It's worked out perfectly for us. And, frankly, for me, working this out with the help of our bank’s electronic banking system is the best thing that ever happened to us.
And, we live quite well. We have dinner out at least twice a week, if not more. John’s a gourmet cook, so we really prefer to eat at home, but there are some great restaurants at Lakeside, and occasionally we just get hungry for one of our favorites.
We have three dogs, two who need grooming ($30 every other month), and one is on a special lamb & rice diet. We go to Guadalajara for shopping once a month. I go back to the States twice a year; John goes back once a year. Sometimes we drive; sometimes we fly. I also go to one of the spas in the area every six-eight weeks, and get a pedicure, a facial, a massage and reflexogy all in one day ($700 pesos). We entertain a little, and we do enjoy our DVDs. We also support two computers and two printers (with pricey ink!). So we’re definitely not settling…we are living the good life. Occasionally we just look at each other and say, ‘we are so lucky! And, to tell you the truth, I think being on a budget is the best thing that ever happened to us. We value the things we do buy a lot more than we used to. And, it definitely makes us think before we buy…which is a very good thing!
Cost of Living at Lakeside is less
Hope this was of some help to you. We think Jane has a good plan, and she’s been sticking with it now for four years. However, you’ve got to remember, it’s all in the lifestyle you choose to live. You make choices where you live now. You will have some of those same choices down here. All we can guarantee is that the cost of living at Lakeside is probably much less than the cost of living of where you’re living now.
If you have any additional cost-of-living questions, direct them to Karen@focusonmexico.com, and if we can’t answer your question, we’ll go to one of our Focus experts to help. That’s what we’re here for…to help you discover if Lakeside really is the “best of your life!”