It's Cheaper in Mexico: Cost Comparisons Between US and Mexico
FOOD
The United States
Food prices keep escalating , even when adjusted for inflation. The price we pay for variety, packaging and sophisticated merchandising is steep. Overall, the the price of food rises an average of 2.6% per year. Prices skyrocketed in 2022, increasing 8.5 - 9. 5%, a historical high.
Mexico
You can expect your grocery bill to be less in Mexico by maybe 35%. Part of the reason for lower costs in Mexico is cheaper labor and distribution costs. Mexico controls the price on many staple foods such as beans, eggs, tortillas, and milk as well as items like aspirin. Each region has its own Canasta Basica, its own extensive list of products deemed by the government as essential to families. The list grows every year.
You save the most by shopping at outdoor markets and buying what natives buy rather than imported brands you’re familiar with. Just like in the US where the food prices prices will be higher in certain cities, the price of food varies a bit depending on your location.
Prices will be lower in Mazatlán (a working Mexican town) versus Cabo San Lucas, which is more strictly a resort community. Sam's Club and Walmart stores tend to be where expats (and Mexicans alike) find the broader array of imported American goods. Unlike in the US, these stores tend to be more expensive than shopping at major Mexican chain supermarkets.
HEATHCARE
The United States
If you aren’t a 20-year-old wearing cloak of immortality, you know that the American healthcare situation has reached the point of crisis. Healthcare's underlying costs in the US are based on what the market will bear rather than the common good.
If you are between 55 and 65 years old, you likely have wondered if your insurance will cover the rising out-of-pocket costs of a major illness or whether you will end up as a statistic: 62% of bankruptcies are caused by medical bills including many people who had insurance when they got ill or were injured.
So far, providers have answered the public’s emergency call with higher deductibles, higher premiums and more out-of-pocket costs, a shift likely to continue. It's been widely reported that a couple 65 and older will need at least $367,000 to pay for medical costs beyond what is covered my Medicare. Here are comparisons on America’s most expensive drugs that will give you an idea of what you might face.
Of course it’s not all about the money. In exchange for the world’s most expensive healthcare, the US ranks 37th in the world in quality of car (last among richer countries). For the fourth consecutive year, life expectancy has declined.
Mexico
The cost of routine tests, many medicines and doctor’s visits are a fraction of the cost in Mexico compared to the US. Surveys show most expats are very pleased with the care they receive. Dental work in particular is a service you should consider doing in Mexico, even if here on a visit.
That being said, technology is expensive everywhere. If an illness or injury requires sophisticated technology, for the best care you will want to go to a major hub city such as Monterrey, Mexico City, León or Guadalajara, where many excellent specialists are US- trained and facilities are world-class.
To be approved for a private insurance healthcare policy in Mexico, you have to have a Visa Temporal or Resident Visa. Once covered, the monthly premium could be far less in Mexico (how much less depends on whether or not you currently receive an ACA subsidy or are receiving Medicare coverage).
There are a few differences in how insurance companies cover you in Mexico. For example, deductibles are calculated by health event, not by year. Retirees on Medicare might purchase a government sponsored plan for emergencies and travel back to the US for any major illness. Patching together healthcare coverage is probably the thorniest issue you will face if life in Mexico.
HOUSING
The United States
A recent study shows over a third of the American population shell out 33% of their income on housing. Worse off are those who still have a mortgage on their homes and those who rent. Of those groups, 30% spend over 50% of their income on housing costs. Rents rose in the United States in 2022 over 12.2% for new tenants .
A Baby Boomer housing shortage is predicted due to declining demand for larger homes in suburban areas. Many older Americans find themselves unable to sell their homes at a reasonable price, locking them into large houses with associated higher costs of maintenance. As people grow older, their homes often need renovations to accommodate decreases in mobility. Such renovations may be difficult to afford.
Mexico
Housing probably will be an area where realize the greatest saving in Mexico. In most cities you can find a very comfortable, even furnished place to rent in a safe neighborhood for $600-$800 dollars a month. A good rule of thumb for owning a home is that it will cost about half of what similar home would cost in the US.
The variety of living styles to choose from are vast. Resort-style condos, apartments and houses in gated communities offer distinct life styles [many blogs on this site cover them]. Cities popular with expats have exceptional weather so house designs emphasize patios and rooftop spaces. Several hundred thousand dollars will generally be enough to purchase a very pleasant home in Mexico, although you will likely need to purchase it in cash. (Mortgages exist but it’s pretty complicated to establish credit as a foreign resident)
One great advantage to home ownership in Mexico is that renovation and upkeep cost far less due to the much lower cost of labor. Property taxes are low in Mexico. Electricity in coastal areas is charged based on consumption and subsidized during the hottest summer months.
The general consensus, as you will see on Mexican expat forums on housing, is to rent for at least a year or two to make sure you love the area year-round and develop a grasp of the market. It takes time to build the relationships necessary to confirm the real, the Mexican, value of homes. When buying or renting a home, the reputation of realtor or landlord is key. You don’t need to be Mexican to own beachfront property.
PERSONAL SERVICES
The United States
The cost of living began to outstrip wages in the US in the late 1970’s, and marked by the steady deterioration of quality of life for a large swath of the population. That outpacing forced many people to pare down on luxuries that once made life more enjoyable (It's not your imagination. You could afford more back then.)
The average cost of a massage in the US is $60 an hour, higher in larger cities. The average cost of a personal trainer in the US currently is $45 for an half hour session. Salon visits range from $150 to $200, depending on where you live. A housekeeper likely costs $100 a visit. A yoga session usually costs at least $15 dollars.
Mexico
In Mexico, personal services can return once again to your life. They cost anywhere from a third to half of what they cost at home. These reduced costs extend to dog sitting, hair appointments, spa or dermatology treatments, housekeeping, even washing your car. It’s not unusual for the masseuse or colorist to come to your home in Mexico.
Admittedly, the services may not have all the bells and whistles you enjoy in the US. Perhaps the spa setting is not as luxurious or might be more bohemian, but to have financial access to these luxuries more often will make you feel like you’ve returned to the comfortable, occasionally pampered, middle-class life you may have misplaced in the US on the road to retirement. Services such as gardening and housekeeping gives you back your most precious commodity - time.
VETERINARY SERVICES
The United States
Having the companionship of a pet is important to many people. The increasing cost of taking care of a pet has been described as a vanguard to the continual rise in the price of healthcare for people. Costs have risen wildly in the last few years for pet care in the US with the cost of routine and surgical vet visits rising 47 percent for dogs and 73 percent for cats over the past decade.
The overall cost of owning a dog is about $750 a year, a cat $355. An annual check-up visit may only cost $45-55 but many don’t anticipate emergency situations such as a $2,000 bill for treating a cat’s hyperthyroidism with radioactive iodine or dog cataract surgery for a dog that runs $3,500.
Mexico
Many people bring their pets with them to Mexico. Care for a dog or cat in Mexico will be a fraction of what it costs in the US, ranging from 30% to 50% less up to 75% less for an injury such as a broken bone. Small services like removing stitches will generally be free. A more advanced treatment, such as the dog cataract surgery mentioned above would cost $2,000.
ARTS AND ENTERTAINMENT
The United States
Going out for an occasional elegant dinner, movie or a cultural event like a ballet or opera lubricates life by making certain evenings special. A dinner in the United States at a moderately nice restaurant (for example, the Italian restaurant Maggiano) averages $27 to $35 in more expensive cities like NYC and San Francisco not including libation. From there of course the sky is the limit.
Movies in the United States cost between $13-15 (although the average is reported at $8, I can’t think of the last time I paid less than $10, can you?) Popcorn and drinks start at about $5 each. A movie with popcorn and a drink can run $30.
Concert ticket prices in the U.S. average $50. Prices for major acts have risen far faster than inflation. Most blame ticket distribution and booking fees, not the artists, for the high ticket prices. If your city is large enough to support an opera, the medium range for tickets runs from $140 - $250. Like baseball? Infield tickets in the U.S. cost about $25 (and who can watch the game without a hot dog and a beer, which runs the tab to at least $20)
Mexico
If you make true comparisons in terms of elegance and dining experience, you will pay at least 30% to 50% less to dine out in Mexico. In cities with very large expat populations, you will find dining costs to be closer to US prices if the restaurant attracts a big percentage of expat and tourists. In such places prices will still be 20% less than at home. If you like to eat out a lot, which many retired expats do, the savings add up.
Dining at the most expensive restaurant in Mazatlán, El Presidio, has never cost me more than 550 pesos ($27) including three courses and a signature cocktail. Usually the cost is around $15 dollars at my favorite restaurant on the beach, including alcohol.
One of the best values in Mexico is movie-going. Movie tickets for first-run movies cost about 60 pesos ($4). Many theaters have luxurious recliner-type seating. Popcorn or sodas run about 25 pesos ($1.25). A majority are in English, subtitled in Spanish.
Good seats in a major live theater production in Mexico range from 500 to 800 pesos ($25-$40). Tickets at smaller theaters like those in Mazatlán or Puerto Vallarta run 300-600 pesos ($15-$30) for operas, ballet and other live performances. A good seat for the opera in Mexico City or Guadalajara might run about $40 and one for a concert featuring a widely popular band costs $50 to $100 dollars a ticket.
Top American bands do tour Guadalajara, Monterrey and Mexico City. An excellent seat for the famous electronic 80s band Depeche Mode' in a recent concert in Mexico City cost 1,045 pesos ($52). A comparable seat for the band in Denver’s Pepsi Center would cost $143.
As far as sports, baseball games are great fun in Mexico, where the sport is very popular. Baseball games featuring major teams cost 100-120 pesos ($5 - $6). The crowd alone makes it worth the trip even if you aren’t a big baseball fan.
WHAT’S NOT CHEAPER IN MEXICO*
Clothing
Clothing runs about the same, or somewhat higher in Mexico if you shop for quality. You likely won’tneed the more expensive items like cold weather coats, gloves and boots in Mexico. Mexico does have cold areas but they are not popular among expats.
Electronics
This is what sends expats home with empty suitcases to fill. Electronics are substantially more expensive in Mexico. Electronics and appliances take a beating in coastal towns due to the salt and humidity in the air. Expect to replace them more frequently if living in a coastal area.Gasoline
High gas prices are a given in Mexico. Many expats find it cheaper and more comfortable to take one of the luxury buses to visit from city to city. Uber is available in 37 cities. Fares are less than the US.
Gym memberships
An relatively upscale gym is as or more expensive in Mexico, and they’re harder to find. Muscle-head gyms are fairly common though (think Arnold and Venice Beach...or prison).
Anything imported
Your favorite exported olives or your preferred bourbon will cost more in Mexico.
You’ll find prices are somewhat relative. Once people live in Mexico awhile, they often develop a tendency to consider an item "so expensive" when it costs the same in Mexico as it does in the US. Expats get so used to paying less for almost everything that on those rare occasions when the price is the same, it seems inflated.
Other savings
There are many unsung cost savings in Mexico. Most expats report that that they spend less because they are not bombarded by marketing efforts in Mexico, nor is the Mexican culture focused on consumerism. You tend to want less when you live in Mexico.
Your “mistakes” cost less. If you go to a bad movie in Mexico, your sunk cost is $4 dollars, not $15. A bad meal was only a $15 investment, not a $40 one, which takes the sting out of poor choices.
If you break a table or appliance in Mexico, you likely can get it repaired rather than having to replace it like you have to in the US. These types of savings go unheralded but add up to a substantially better quality of life at less cost.