Cost of Living in Mexico

Before deciding to move to a new country, it’s important to do your research. After all, you don’t want any unwanted surprises impacting your quality of life when it comes to things like land, climate, culture, and of course, the cost of living.

Depending on where you live in Mexico, you can enjoy balmy weather year-round, with a few rainy months. If you like experiencing a change of seasons, the northern and central areas of Mexico have cooler winters.

You can explore Mexican culture and traditions, including unique dances performed at their celebrations. Mexican arts include clay pottery, colorful baskets, and embroidered garments. They also have traditional ways of silver-smithing, making mosaics, and weaving textiles.

Mexican cuisine differs depending on the region you’re in, so you’ll get to taste various foods in different parts of the country. No matter where you go, you’ll enjoy corn tortillas, rice, pepper, and beans. Tequila is plentiful, and Mexican Coke is a favorite soda in the country.

Mexico is a great country to live in because the people are friendly, you’ll still be near the United States, and the cost of living is lower than in America. Whether you move to Mexico full-time or travel back and forth throughout the year, you’ll find lots to love about the country.

What Is the Cost of Living in Mexico?

A photo showing a dozen people holding Mexican flags in the air. They are looking away from the camera, into a sunset

When you calculate the cost of living in Mexico, you need to consider the things you have to pay for every month in the United States. You’ll want to keep as close to your same standard of living as possible, if not live beyond your means considering the lower costs.

The cost of living also varies according to where you live. Some cities are more expensive, just as they are in the United States. It’s possible to live on less than $600 in Mexico but to live comfortably, you’ll want to aim to spend about $1,000 per month.

Internet and Utility Expenses

Utility expenses will depend on your living situation. Some apartments and houses have central heat and air, which cost more than running window units and ceiling fans. Average utility bills show $4 for electricity, $9 for water, and $15 for gas each month.

It’s important to consider that the Mexican government does provide a subsidy for utilities that pays 54% of the cost for users. This benefits residents living in hotter cities who use more electricity to cool their homes, but it is available to everyone.

Internet costs are typically influenced by the speeds you need and what company you use. A monthly bill for fiber-optic internet is about $24 on average. You can also get a cell phone plan in Mexico with 3GB of data usage for $9 a month.

Related: Is it Safe to Retire in Mexico?

Cost of Transportation

The access to and cost of transportation will depend on the size of the town you settle in. For instance, a small town might mean you’re able to walk or bike everywhere. Larger towns will have a public transportation system, usually a bus, with fares costing about $1 each way.

Major cities are connected by bus routes, so a 45-minute journey to another town will cost just a few dollars in bus fare. Cities also have Ubers and taxis available, just like you’d find in the United States.

Groceries

A picture of a huge variety of Mexican dishes positioned on an Aqua colored timber table. Some of the dishes on display include tacos, salad, pranws, salsa, and guacamole

In Mexico, you can visit a market to find various homegrown vegetables and homemade items. Some people cook food to sell at the market, so you can spend $8 for an entire day’s worth of prepared food. There are also chain supermarkets, such as Walmart, in Mexico, where you can get a week’s worth of groceries to feed two people for about $50. 

If you typically prefer bottled water, then that is something you’ll also have to factor into your overall budget. Parts of Mexico can get particularly hot, so you may find yourself using several five-gallon jugs of water each week at about $2 per jug.

Dining Out

Dining out in Mexico won’t break the bank. You can find affordable street food, like quesadilla for $1 and tacos for about $3. Meals in a restaurant will be a bit more expensive considering the sit-down experience, but even those will cost about $10 to $15.

How Much is a Coke in Mexico?

A two-liter of Coca-Cola in Mexico City costs just $1.48, which is cheaper than a 12-ounce can in many places in the United States! Canned sodas are more expensive than bottled in Mexico, so a 20-ounce can of Coke usually comes in at about $1.

Clothing Cost

If you want to try out local Mexican brands, you’ll be glad to hear that you can buy a pair of jeans for as little as $10. For $100, you can buy two shirts, two pairs of pants, and a pair of shoes—all of good quality.

On the opposite end of the scale, Mexico has upscale brands and boutiques where a single item of clothing might set you back hundreds of dollars. You can shop at thrift stores in Mexico just as you can in the US, finding bargain clothing for 25 cents.

Childcare Cost

A photograph of three children playing in a day care center. They are throwing colorful balls into the air and screaming in delight

Childcare help often falls to extended family members in Mexico, but if you’re an expat, you likely won’t have that luxury. Fortunately, there are childcare facilities available, similar to daycares in the United States.

Guarderias, or Mexican child care facilities, don’t have much government regulation. Privately run guarderias can be small, which ensures your child will get more supervision, but they might be composed of mixed-age groups and have less structure regarding activities.

If you want your child in a setting with same-age children and age-appropriate lessons, you’ll want to find a larger facility, but these typically start at $150 per five-day week.

Rent in Mexico

Housing in Mexico is extremely affordable, with monthly rent compared to what you’d spend when splitting an apartment with a roommate in the United States—or less!

Houses and apartments come with full kitchens, so you don’t have to worry about working with a cooktop or smaller than average refrigerator. You won’t have to supply the appliances, which is another money-saving perk.

One and two-bedroom apartments start at $500 in average-sized cities. You’ll want to have a checklist of what you’re looking for, just as you would back in the US. If you look for it, you’ll be able to find a place that has air conditioning and WiFi within your budget. 

Should you set your sights on a tourist town, your money won’t stretch as far. Indeed, a popular town like Sayulita has apartments for rent starting at $1,500. Even at that price, you might be hard-pressed to find anything available.

Related: Cheapest Places to Live in Mexico

Entertainment Cost

A closeup photograph of the headstock of a guitar. In the background you can see a musician holding the instrument

Entertainment costs in Mexico depend on how you like to spend your time. Much of the entertainment, like the beautiful beaches and other natural attractions, are completely free. However, if you like the nightlife, you’ll have to consider the size of your city.

Seeing a movie at the theater will cost you $5 for a ticket, with concessions costing extra. Concert tickets also start at $5, with popular local bands charging $15 per ticket.

Many cities have at least one dance club and bar, both of which can feature live music and fun social activities. Buying beer at bars and clubs costs less than $2, a glass of wine is $3, and a mixed drink is on average $4 to $6.

Healthcare Cost

You’ll want to take advantage of healthcare in Mexico if you plan on staying for an extended period. There are different private healthcare providers you can look into to find the exact coverage you need.

Average coverage will have a deductible that is less than $500, and the copay is 10% of the service, whether it’s medical or dental. These plans have annual fees, so you can be insured for $500 to $600.

Related: Cheapest Things to Buy in Mexico

Sample Budget

Once you’re established in Mexico, you’ll want to calculate how much you’ll spend every month. Since you’re already in the country, this budget won’t include flights to or from Mexico. 

The average cost of living in Mexico can range from $600 to $2,000 a month, with a comfortable life costing about $1,000 for a single person. Your costs will typically reflect where you live, both in terms of the area of the country and whether you choose city or rural living.

Housing is the biggest monthly expense, which is similar to how rent costs make up most of your budget in the United States. You can factor in utilities, healthcare, and groceries, then estimate amounts for transportation, entertainment, and miscellaneous bills.

ExpenseCost in USD
Rent500
Electricity4
Water9
Gas15
Internet24
Cell Phone Service9
Groceries200
Healthcare50
Transportation30
Entertainment/Dining Out250
Miscellaneous150
Monthly Total$1241

Living within your means in an average-sized Mexican city might cost less than you rent alone in a similarly-sized American city! This monthly budget would have you spending a baseline of less than $15,000 a year.

Related: Can You Order from Amazon in Mexico?

Real Estate Prices

An image of a traitional house. It shows a whitewashed stone wall, cactus plants, pot plants, and a pebble footpath

The cost of living in Mexico will change if you decide to buy a home instead of paying monthly rent. Foreigners can buy property in Mexico, whether they intend to live there and become permanent residents or rent it out for extra income.

Buying a home in Mexico is similar to buying a house in the United States, and many houses can often be bought in cash. If you need financing, local banks might lend you anywhere from 50 to 70% of the home’s value. 

Being financed through a bank will mean you’ll pay slightly higher interest rates than in the United States, anywhere from 6 to 10%. 

After you find out how much financing you can get, you can search for houses within your budget. Then you submit an offer to purchase the contract to the seller.

You will pay a deposit of five to 10% of the sale price, and then the contract will be drawn up by an attorney. The attorney will also apply for a trust permit that will be notarized before being finalized by the Ministry of Foreign Affairs.

After you pay taxes and have the deed transferred, the closing will take place, and you will own your home in Mexico!

How Much Does a House Cost in Mexico?

House prices vary according to location, with beachfront homes and condos starting at $220,000. New construction homes cost as little as $80,000, while luxury villas on the beach can cost more than $5,000,000.

When you’re searching for a home in Mexico, consider what is important to you in a property. Some beachfront properties include private beach access, which can be worth the upfront cost since it pays off in privacy.

If you want to have family and friends come to visit you, it might be worth investing in a larger space that is away from the beach and city centers so you can get more for your money. If you plan to rent your home for extra income, you’ll want to find something appealing to tourists.

Related: Buying Property in Mexico

Taxes

Taxes in Mexico include income tax, VAT tax, property taxes, and more. You can get a general idea of how much tax you’ll pay when you live in Mexico, but there is a lot of variation in the rates depending on your circumstances.

Income Tax

Income tax on personal income in Mexico is determined by how much you earn and your residency status. Mexican residents pay income tax on all of their income, regardless of where they earned it. Non-residents living in Mexico are only taxed on the income they earn in Mexico.

To give you a broad idea of income tax rates, residents can pay anywhere from 2 to 35%, while non-residents and people on a work visa will pay between 15 to 30%.

VAT Tax

VAT tax, or value-added tax, is the amount of tax added to the sales of local goods and services, like sales tax. In Mexico, this rate is a standard 16%. This rate is different for goods like alcohol, tobacco, and fuel. Exports have a 0% tax rate.

Real Estate and Property Tax

When you buy property in Mexico, you will have to pay a 2% acquisition tax when you receive the deed. Buyers also pay 5 to 8% in closing costs. As a homeowner, you’ll pay a quarterly property tax that is roughly 0.1% of the property’s value.

If you’re using this property for rental income, the money you earn will be taxed at a 25% rate. However, if you’re a permanent resident of Mexico leasing out an extra property, that money will be taxed at the average income tax rate.

When you sell your property in Mexico, you will pay a capital gains tax. The amount of this tax varies depending on how long you’ve owned the property, but it can be up to 35% of the sale profit.

Retirement Benefits

Retiring in Mexico will enable you to live a lavish, relaxing lifestyle. After obtaining a retirement visa, you can apply for an INAPAM card. This card is issued through the Mexican government to benefit senior citizens.

The INAPAM card entitles retirees to discounts on goods and services, including medical care, travel costs, utility bills, and even property taxes.

Before retiring in Mexico, make sure your social security income is not being double-taxed. Mexico has tax agreements with the United States and other countries to prevent this from happening, but you have to choose one country that will tax your income.

Inheritance Laws in Mexico

If you intend to become a permanent resident in Mexico, it’s a good idea to use an attorney there to draw up a will. Wills drafted in other countries will still apply in Mexico, but it may take years in the court system until your heirs can resolve the estate.

Having a will written in Spanish will help ensure your Mexican property, belongings, and bank accounts will be paid out to your heirs with no issues.

The Average Income in Mexico

An image showing a collection of paper currency from Mexico

The cost of living in Mexico is lower than it is in the United States. About 11 million Mexican employees earn minimum wage, which is $6.36 per day. In comparison, the minimum wage in the United States is $7.25 per hour. 

The average annual income in Mexico is about $10,500, but most citizens live on less than that. From those income stats alone, you can see the scope of how far your money will go in Mexico.

Immigration Costs

The Mexican government allows Americans to stay for six months on a visa, which will give you a good start to get familiar with the country. This six-month visa is reset every time you cross a border and return to Mexico. 

If you won’t be leaving the country every six months, you’ll need to find a long-term solution. To show you’re financially stable, you’ll have to show the government that you earn at least $1,300 every month.

Retirement visas are easy to get, requiring only an application, proof of finances, and an interview with a consulate officer. Retirees don’t have to go through the temporary residency process at all and can become permanent residents as soon as the process is complete.

FAQs

Even after learning how much various expenses cost in Mexico, you might still have questions about living or retiring in the country, among other things.

Can I Use USD in Mexico?

The national currency in Mexico is the peso, referred to as MXN, the way Americans use USD. Many places list prices in both MXN and USD and accept both forms of currency. You can use a mix of pesos and dollars in Mexico.

You can get pesos in your home country by ordering them in advance. Having a few hundred dollars in pesos will ensure you get a good exchange rate. It’s also nice to have some on hand so you can tip and pay for transportation as soon as you arrive in the country.

Other than that, you can exchange dollars for pesos at banks or money exchange shops. The exchange rate will vary, so you might want to shop around.

How Much Cash Can I Bring Into Mexico?

There is no set limit about how much money you can bring into Mexico. You’ll have to fill out a form stating how much money you’re carrying. If the amount is more than $10,000, including cash, checks, and money orders, you’ll have to complete extra forms for tax purposes.

How Much to Live Comfortably in Mexico?

The budget outlined above will provide a basic lifestyle in Mexico. If you want to have a car, a regular cleaning service, and the freedom to go out often, you might want to budget for $2,000 a month, so you don’t feel restricted.

How Much Do You Need to Retire in Mexico?

The monthly budget outlined above can allow retirees to live comfortable lives in Mexico. For a couple who would like to have a car, cleaner, and health insurance, you would raise your budget to $2,500 a month.

On the plus side, if you’re eligible for Social Security payments in the United States, you can still receive those payments while you live in Mexico. Therefore you won’t have to live off of your savings because you’ll still get income each month.

Wrap Up

If you’re interested in living the expat life, settling in Mexico is a great way to go. You’ll have proximity to your home country and be able to travel back and forth easily. You’re most likely already familiar with the food and aspects of the lifestyle, so there won’t be an extreme culture shock.

With the ease of getting a traveler’s visa in Mexico, you can try out the country before committing to life there. However, once you settle in, you’ll be able to live a very comfortable life for just a fraction of what it costs in the United States.