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What is the Cost of Living in Mexico Compared to the US, Canada and Europe?

The cost of living in Mexico is lower than that of the US, Canada and Europe, especially for items that are produced locally. The good news is that this includes most product categories such as food, furniture and transportation. Additionally, if you are resourceful and patient enough to look for the right place and right items, i.e., if you avoid Gringo targets and tourist traps, most products are incredibly affordable. Despite the low cost of living, Mexico supports the 11th largest economy in the world. Areas in Baja California Sur remain among the most attractive in Mexico. Here’s how a few of the principal expenses stack-up in Mexico.

Food

A single household with four family members spends around $360 every month on grocery items. Food and drinks in Mexico are very affordable since the country widely produces agricultural products, livestock and other raw materials. Food production is initially for the citizens although there are also manufacturing companies which aim to deliver to foreign countries primarily.

One can have a full meal of a taco or burrito and a drink for less than $2. There are also high-end restaurants which serve Mexican or foreign cuisines at rates averaging $100+. Middle class places can serve meals to full families for well under this amount.

Beef is very cheap in Mexico and it is the most popular meat product among locals. Poultry comes a solid second in terms of purchased grocery items. Mexico also produces several herbs, spices, vegetables and fruits which can be bought at very low prices outside the city.

There are a number of markets in major cities selling agricultural products like bell pepper, tomatoes, corn, rice and beans at low rates or wholesale. Mexican beer is cheap while there are also high quality drinks like tequila, tea and coffee which can cost higher.

Housing Costs in Mexico

On the average, a single person spends about $250 every month on apartment rentals. As the quality and space increases, prices will also become more expensive. Location is obviously a determining factor so spots in more desirable locations command more of a premium. Rents in Mexico can be higher than in equivalent-sized US towns or cities if the place is popular or fashionable, particularly places within easy reach of the US border or frequented by foreign visitors and expats. In less popular (or less well known / off the beaten track) towns and cities, you may find good quality accommodation at lower rents that you would pay for the equivalent space in the US. Some additional quantitative data can be found here.

Services Costs in Mexico

Utilities are more expensive in Mexico than in many other areas. For example, prices for electricity are high, compared with US and even European prices, due mainly to the lack of competition. Telephone services, both landlines and cell phones, are priced higher than the US and Europe. Telmex, the national telco incumbent which has a natural monopoly. The advent of internet telephony (e.g. SkypeVonage) is beginning to make long distance communications, especially, affordable. As such, internet rates start at around $20 per month while annual subscriptions tend to be cheaper.

Piped water is relatively inexpensive, but not always potable (drinkable). Decades of under-investment, combined with a widespread attitude of impertinence towards paying water bills has left Mexico’s main water system in poor condition. As a result, most people purchase bottled water, often in 20 liter containers. Bottled water costs hundreds, if not thousands, of per cent more per liter when compared against the price of potable tap water in the US, Canada or Europe.

Clothing Costs in Mexico

Shopping for name brand clothes in Mexico can be fairly expensive; however, department stores, flea markets and street vendors offer a tremendous assortment of options. The quality of clothes is also good if manufactured locally. There are imported products from the United States, Europe and Asia as well. Products from the latter are quite cheap and are sold in bulk. Prices for traditional Mexican dresses are around $30 while shoes cost around $50, depending on quality. The average Mexican spends $125 to $200 each month on clothes. Again, overall Mexico is a great place to shop for locally made items.

Healthcare Costs in Mexico

Mexico also gives utmost importance to the health and security of its people. Health insurance policies are advised to all working individuals while there are several excellent health facilities providing quality care and state-of-the-art technology. Average insurance rates cost around 50 euros every month. There are several compensation benefits provided to insurance policyholders. The government also has a housing authority agency which takes care of poverty and homelessness.

Technology in Mexico

A growing range of items, especially domestic appliances, audio/visual equipment, technology (e.g. iPods, WiFi), computers, computer software and cameras are more expensive than identical items sold in the USA.

Employment Costs in Mexico

Trade and tourism remains to be the top industries of Mexico and comprises the bulk of its GDP support. The employment rate is estimated to be at 92% and the government foresees a continued decrease in unemployed individuals. The economic boom of Mexico may also be contributed to several citizens working abroad and bringing in dollars from the United States and Europe. If expatriates’ skills match the category in demand at the moment, employment can come easy (subject to the regulatory framework).

Transportation Costs in Mexico

Cars cost slightly more in Mexico than equivalent models in the US.

Local and national pubic transportation is generally lower in cost than the US/CA and continental Europe. Competition has been introduced in the domestic airline market and low-cost airlines are beginning to make a significant difference to domestic air-travel fares in Mexico, has been relatively expensive to date.

Gasoline and diesel is (currently) subsidized by the Mexican government. For this reason prices don’t fluctuate as much as those in the USA and Europe when oil prices go up or down on international markets. In fact, the government recently suggested they would retain prices at the equivalent of around $2.50 per gallon for 2009. However, it is unclear how much longer Mexico will be able to afford to subsidize the price of auto fuels.

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James Pickell, CEO & President
Self-confessed serial entrepreneur. Addicted to challenges. Bores easily. Baja denizen and afficionado.
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