Cost of living in Mérida, México

Here’s what pushed me over the edge:

For what I pay each month for US health insurance, in Mérida I could pay for private health insurance and rent a two-bedroom house.

US: Monthly health insurance premium ($5k deductible per year): $278

Mérida:

• Monthly health insurance premium ($400 deductible per incident): $72
• Rent for two-bedroom house in middle class neighborhood: $205

One of my café "offices" in Mérida, Mexico

It looks like I could save $7700-12700 a year if I moved my base to Mérida. Here’s a breakdown showing what I’ve learned so far about the major costs of living here.

 

Health care costs

If I had spent the last year in Mexico instead of (mostly) in the US, it looks like I would have saved about $5600 in health care costs alone.

Sample fees
Root canal:

• US: $845
• Merida: $180

Breast MRI with contrast:

• US: $3500
• Merida: $487

Because out-of-pocket costs are so low, some expats go without insurance. They give good reviews of the private hospitals, which often have US-trained doctors, and report that doctors spend more time with you and listen better. The insurance plan I’m looking at also includes two house calls a year.

 

Housing costs

These figures are based on what others report spending here and on my actual expenses during a month in the summer and two months (so far) in the winter.

Potential annual costs in USD

• Rent: $2460
• Heat: $0
• Electric: $725*
• Propane for cooking: $120
• Water: $50
• Trash: $15
• Internet: $445
• iPhone plan with unlimited data: $492
• Laundry service: $237
• Total: $4544

*The electricity estimate is based on my actual use for one month in summer and one month in winter and assumes 7 months of summer. However, I tend to use a lot less electricity than most people. The northerner who rented my winter Mérida house last year used at least 5 times as much electricity as I did in the same period. So my electricity estimate likely won’t apply to normal people from the north.

Food and drinking water

Drinking water delivered to my door: $120 /yr

Food: I haven’t been closely tracking my food expenditures. Produce is cheaper than in the US, but most restaurants are only slightly cheaper than they are in my midwestern home town. Imported food (Thai curry paste, etc.) is about the same price or slightly higher. I’m assuming that my food costs won’t go down dramatically as long as I continue to have expensive tastes.

 

Transportation costs

One of the appeals of Mérida for me is that I probably wouldn’t need a car. I’ve been fine with buses and cheap taxis.

Many buses and 1 round-trip taxi per week: $215 / year

I haven’t felt the need for a rental car but could see getting one for wandering the countryside without depending on buses. I haven’t checked their prices.

 

Business expenses

My business expenses would remain roughly the same, since most of them are charges from online services that aren’t location specific.

Happily, the cable internet in my current rental is a million times more reliable than the shared wifi at my summer rental. Even though it’s only 2Mbps, it has worked well for what I need, and so far the customer service is good. I filled out the application forms on a Wednesday and the technicians came as scheduled on Friday to install it. There’s still a bit of a slowdown in the evenings, but even then it’s perfectly usable.

 

Savings compared to my US life

So far, it looks like I’d save about $7700/year if I simply locked up my US house (it’s paid for), moved my base to Mérida, switched to Mexican health insurance, and paid the same federal, state, and county income taxes as I do now. It assumes that I would leave my car in the US and stop paying insurance and registration for it.

The savings increase to about $12,700/year if I sell my US house, invest the proceeds at 3%, and end my tax residence in my current state. It assumes that I still pay 15.3% self-employment tax to the US and pay the same in Mexican income taxes as I’ve been paying in US federal income taxes.

 

Important reminder: I am not normal. I’m comfortable with a “lower” standard of living than many northerners. I didn’t turn on the Mérida water heater until December because I don’t mind cool showers when the air is warm. I don’t need a dishwasher or lots of water pressure. I sleep in a hammock. There are no cabinets or hot water in the kitchen. When it was 94 degrees in November, I was fine with a fan. In the US I use so little electricity that the electric company replaced my meter because they thought there must be something wrong with it.

The other expat homes I’ve seen here are closer to a US level of comfort and consumption. If you want to live in a completely air-conditioned four-bedroom home overlooking a golf course, you can. It will probably be cheaper than in the US but nowhere near as cheap as I’ve shown here.

Some confirmation

When this post appeared on my other blog, Marc Olson left this comment:

It is interesting how close we come on our budgets when it comes right down to it. I posted my budget last year, if anyone is interested in a comparison.

More perspectives

“Some folks live nicely on $800 USD per month, others need $3,000-$4,000. If you shop for yourself and cook, and don’t use the A/C, and rent a very modest place in a working-class neighborhood, you can live on $1012/month Canadian with two people.”

“So far we have averaged 1320.29 in U.S. dollars per month” with no air conditioning

See this page on Yucatán Living for lots of detail.

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