What are some of the costs of living in Mexico?

Take a look at the cost-of-living issues:

Would-be expatriates look for home destinations that appeal to their individual definition of adventure and paradise. For the first time, International Living reported Mexico as the world’s top retirement haven because of its economy, real estate, and quality of life. That was great news for Mexico yet it missed some important details on cost-of-living from the experience of those who have already jumped at the dream of paradise on a budget.

Real Estate
The main attraction for those migrating to Mexico has clearly been the real estate, as evidenced by the phenomenal growth of the home market here, especially since 9/11. Not only are oceanfront and ocean view properties still 50-80% less than their US counterparts (if there really is a direct comparison), property taxes are a tiny fraction of states within the United States. Coastal and inland water-view living is simply a bargain in Mexico when compared to the United States.

Services
Salaries in Mexico are much lower than north of the border and this shows itself in all kinds of services that expatriates need every day. Doctors, dentists, constructions workers, handymen, mechanics, housekeepers, and gardeners all charge 50-75% less than their US counterparts. The net affect is that expatriates can extend their money and even improve their quality of life. Other services such as entertainment are also much less in Mexico.

Groceries
It is challenging to compare the cost of food in Mexico to that in the United States. Mexican cuisine is substantially different than the normal daily fare of Americans, and it can be quite economical. However, adding a variety of dishes common to the multiethnic menu of today’s American poses challenges of supply and a substantial increase in food costs.

The saving grace seems to be produce, which is fresher and offers more tropical favorites such as papaya, mangos, plantains, avocados, and guavas at good prices throughout Mexico.

Energy
Energy is about two to three times the price in the United States, with the exception of gasoline which is currently about 25% less than the going US price. This comes as somewhat of a surprise to foreigners who think nothing of leaving their PC and monitor burning at all hours of the day, and who ignore the “vampire affect” of the many chargers and electrical adapters scattered throughout their house.

Electronics
Mexico’s stiff import tariffs on electronic goods from Asian competitors mean that electronics in Mexico are notoriously expensive. Adding the Mexican value added tax (IVA) makes these products cost about double the identical product in the United States. This is a serious consideration when thinking about adorning a new, Mexican home with a 55-inch plasma display for the living room! Notable exceptions are Mexican-made and Mexican-branded appliances that are on par or slightly less than their foreign equivalents.

Clothing
Most foreigners don’t bother buying clothing in Mexico for the same reason that many Mexicans along the border with the United States avoid buying clothes in Mexico. The quality of common clothing is relatively poor, or the price of good quality clothing is 30-50% more than in the US. And say goodbye to well-advertised sales in your Sunday paper. There is simply no such analogy in most of Mexico. Most expatriates continue to purchase their clothing on their trips to the United States – easier for border areas like northern Baja California but more challenging the further you go into Mexico’s interior.

Communication
Telephony in Mexico simply costs more. There is a good reason that one of the world’s two richest men is from Mexico!

The good news is that high-speed Internet is now ubiquitous together with basic local telephone packages. Many foreigners control telephone costs by eliminating all the frills on their Mexican telephone line, and by making use of voice over Internet products such as Vonage and Skype. These services make calls back home economical and even save money on calls withinMexico. For example, a one minute call using Vonage to Mexico City costs about a penny a minute with eight cents a minute being the norm. Compare this with 25 to 45 cents a minute for long distance within Mexico on a Mexican line.

Telecommunications packages, including Internet and local (Mexican) telephone services, have also dropped to as low as US$25.00 per month. Recently, US-based Verizon Wireless introduced their “Nationwide plus Mexico” plan, a new service to help expatriates and frequent travelers enjoy a more convenient and affordable cross-border life.

Prior to the new “Nationwide plus Mexico” plan, expatriates in Mexico were largely limited to hardwired telephones in order to receive or make calls between the US and Mexico. Even Internet services such as Vonage, MagicJack, and Skype generally required hardwired landlines through either the telephone monopoly or, increasingly, over cable networks.

Yet the answer to cell phone mobility has been absent ever since Verizon Wireless abandoned their “North America Choice” plan in early 2007, in response to increasing tariffs by Mexican carriers on cell phone calls in 2006. AT&T – formerly Cingular – had also abandoned their “North America” plan in the fall of 2005. Only a few, long-time expatriates have been fortunate enough to keep those plans, which they would sometimes informally transfer to others since they could not be modified.

In the absence of specialized plans allowing new US consumers to travel freely between the US and Mexico, vacationers and expatriates to Mexico over the past two years have been relegated to exorbitant roaming fees, from about US$0.70 to nearly US$2.00 per minute. Alternatively, they carry both Mexican and US cell phones, or only make and receive calls on landlines.

This complicated the need to stay in touch with friends, family, and business stateside.

Verizon Wireless’ “Nationwide plus Mexico” starts at US$59.99 per month for 450 minutes, or US$94.99 for 1,350 minutes, plus it offers family plans. It treats regular and “Night & Weekend” minutes as being equal on either side of the US/Mexico border. Users of the service will be reachable at their US cell phone numbers on either side of the border, and will be able to make calls to either side of the border. For example, a resident in Rosarito Beach, Baja California would be able to call a shop in Ensenada in addition to calling family members back in the US.

There are a couple of caveats to this new program that will be important to expatriates who spend most of their time in Mexico. Verizon expects customers to use at least half of their minutes from within the US as averaged over a three-month period. Verizon reserves the right to cancel the contract if more than half of the calls originate from or are received within Mexico (likely due to higher Mexican cell phone tariffs). This makes the plan more appropriate for frequent travelers and those residing in the US/Mexico border region. On the other hand, full-time residents in Mexico, who share the plan with others in the US under the “Friends and Family” program, can probably breeze by this limitation.

Additionally, calls to other Verizon Wireless customers while roaming in Mexico do not count as free “Mobile to Mobile” minutes and are taken out of the standard plan minutes. This limitation also applies to calls between “Friends and Family” numbers on the same contract.

Details of the plan and coverage areas are available at [url]http://b2b.vzw.com/productsservices/businesscallingplans/
nationwidemexico.html.[/url]

The affordability of life in Mexico has improved substantially over the past year and this new tool from Verizon Wireless offers a new convenience, particularly for those in the US-Mexico border region of California and Baja California.

Economics is one of the generally positive aspects of life in Mexico.