It’s hard these days to avoid reading something about the rising cost of living in Mexico.
YouTube videos targeting expats are everywhere — carefully mapping out how much the costs of certain items and experiences have increased in different parts of Mexico. The commentary reached a fever pitch this past week with the peso hitting 16.30 to the US dollar, an almost 9-year high and a 30% move in just the past two years.
It is undeniable that there is a noticeable difference in the prices of most goods and services these days, even when paying in pesos and not thinking about the price in dollars.
This of course is due to the wave of high inflation that has affected pretty much every corner of the globe over the past several years. When one adds the impact of the recent peso appreciation, some price increases are downright startling! This has created some sticker shock and “Mexico soul searching” for more than a few expats. For decades now, expats in Mexico have been able to rely on a weak peso, which would often offset any inflation and make the country an affordable place to live for those from the U.S. or Canada. Those days are over.
Let me share a simple real-life example. I like to go to our local farmers’ market for breakfast on Saturday mornings. Last week, I ordered my usual, from the same three vendors: a fresh-squeezed orange juice (it would be really hard for me to go back to Tropicana at this point!), a fresh-baked cinnamon roll from a local bakery (sorry Cinnabon!) and two tacos with freshly made blue corn tortillas.
Two years ago, this meal cost me 86 pesos. Today, the exact same meal from the exact same vendors (all using 100% local products, nothing imported which could distort the costs) cost me 130 pesos. In other words, just the pure inflationary cost increase in pesos of my local breakfast is 51% over two years or 25% per year! Now, when we add in the appreciating peso impact, the increase is even more dramatic. The meal two years ago at a 22 peso to US dollar exchange rate cost me US $3.91. Today, that same meal cost me US $7.88 (at 16.5 pesos to the US dollar). This means that, in dollars and taking into account the inflation, the same meal from the same vendors increased 102% in price in just two years!
My point here is not to debate if the meal is worth US $7.88 or to compare how much the meal would cost in San Francisco or Dallas. I am simply pointing out the scale of the cost increases for expats in Mexico.
While costs of some goods and services have increased A LOT in Mexico over the past several years due to inflation and a stronger peso, does that mean living in Mexico now costs as much as living in the United States? Not at all. Let me explain.
There is another very important component that I think most of the YouTubers fail to point out — and that is the differences in levels of consumption. When I refer to consumption, of course I am generalizing as the consumption of each individual and household is different. In general, as I have personally experienced and have heard many expats agree, they consume far less in Mexico than in the United States.
In the U.S., consumption is usually quick, affordable and easy: online ordering, easy return policies, nearly constant sales promotions, ample parking and short check-out lanes all make it effortless. However, in Mexico, buying things can require more effort: service is often slower, returns are nearly impossible, lines are longer, parking is harder. I find this makes me buy less. Depending on where you live here, you might walk to the grocery store and as a result, end up only buying only you can carry home. People often have smaller cars and homes here which equals less consumption. Changing the décor of your home often is as simple as some new plants or flowers (less consumption). I’d go so far as to say the pressure to “keep up with the Joneses” is felt less by expats living in Mexico.
The bottom line is if you import the same lifestyle you had in the United States when moving to Mexico, you’ll really feel the pain of the increased costs. If you modify your consumption lifestyle, you will spend less, as well as be a lot less frustrated.
As a result, even if items cost a lot more than they used to, or even if they begin to approach U.S.-level prices, because there’s a tendency to consume less in Mexico, the overall cost of living is still much lower.
So, how much does it really cost to live in Mexico? Having lived here now for four years, I have been able to carefully do an “all-in” comparison of our monthly total living expenses in San Miguel de Allende versus Chicago. The result is that we spend 30-40% less in any given month here compared to up north.
Has this lifestyle change led to less fulfillment, less satisfaction, less happiness? Quite the contrary — at least in our case, we are healthier, happier and feel more fulfilled than ever.
I would love to hear your thoughts in the comments section. Do you agree with my analysis of the cost increases? Do you agree with my thoughts on consumption in the United States compared to Mexico?
Travis Bembenek is the CEO of Mexico News Daily and has been living, working or playing in Mexico for over 27 years.
A full meal in San Miguel is probably 40 to 50% cheaper than it’s NYC equivalent. My daughter and 4 of her friends just spent 4 days in San Miguel a couple of weeks ago and they were amazed about how cheap San Miguel is (i am talking about having breakfast at Posada Corazon and hamburguer night at The Restaurant). And San Miguel is probably, along with Cabo, one of the most expensive places in Mexico. So if an expat was paying $4 for breakfast and now complains about paying $7, he can go back to fry something in Alabama or Florida or wherever he or she is from…😂
Well, Mr. “Yankee Aggression”..I’m from Mississippi and the food prices have more than doubled in Puerto Vallarta, MX in the last 4 years because people (dumbocrats) are running from their red states and cities because of their tax and spend policies have driven them out because they can’t afford to live in the USA any more and dumbocrats will not admit they were wrong and mover to Texas, Mississippi, Florida or any other red state because of their Trump Derangement Syndrome and the love of marxist OBiden.
Real estate has quadrupled in 4 years because of dumbocrat flippers that come from San Francisco. LA and SD. I bought my condo in PV for $250kusd and now its pushing $1.25musd just because of the dumbocrats and they complain about the HOA fees and every year vote for a 6%+ increase and my hoa fees have tripled.
I know and met these people and have talked extensively with them about how they drive themselves out of their own homes and condos. I’ve seen people in California that own a $50K tear down (we call in Mississippi) that gets valued at a Million dollars and they mortgage it repeatedly and go blow the money traveling or cars until they can’t afford their mortgage because they have to act like movie stars.
It’s getting to where i can find many more places cheaper to eat in South Mississippi than PV and I spend 6 months in each every years for the past 20 years. The $4 breakfast is gone in PV and South Mississippi. $8.50 in PV but not in South Mississippi anymore due to OBidenomics. You want to compare NYC prices to Mexico….thats ignorant…I’m sure people in Hawaii would say the same as you. Thats some of the most expensive real estate in the North American continent. There is nothing “Relative” about it. If we don’t get Trump back in office November 5th, we are ALL screwed.
Mexico is booming right now due to OBidenomics driving people economically out of the USA ironically for the same reason illegal Immigrants are pouring into the USA from even poorer countries. The strong Peso is fueled by open borders, drug smuggling, illegal immigration, human trafficking, sex trafficking, weapons smuggling, off shoring of all of the USA manufacturing (especially autos) and the cartels can’t bank the money so they construct resorts and high rises to park their money.
These generations are the most backwards, upside down lunatics i’ve seen in my 66 years. D.E.I and C.R.T are racist and destroying everything for everybody. The 4th branch of us government (education) are destroying our children and grandchildren and is spreading to Mexico.
Compared to San Francisco, it’s about 40-50% less expensive in San Miguel, with the added benefit of having a great “ quality of life” whatever that means to you personally. Yes, things are more expensive in SMA(vis a vis the rest of Mexico) but that’s true for any place that’s desirable to live.I have to say, compared to living in Hong Kong and San Francisco, I’ve never been happier!
Our personal experience after living in Mexico for 16 years is the cost of restaurants/prepared food and government including those pricey toll roads are by far the most inflationary items. A combination of conservation and energy efficiency improvement plus solar energy has our utilities still far below what they were in the U.S. before we came here. Here, we have to neither heat nor cool other than fans for a few months in May and June and a room propane heater for a few weeks around December.
Medical has gone up but is still far cheaper here. We could reduce food costs by shopping at the mostly Mexican Tianquis in surrounding towns but our consumption is much less now and the cost difference doesn’t justify getting the car out when we can walk now.
Cell phones are far cheaper here. Internet is fast enough and much cheaper.
It isn’t nearly as cheap in Mexico as it used to be but the combination of quality of life and climate is still unbeatable here. We have invested in Mexico over the years and no longer depend on the U.S. for income which may be a good thing if things continue to deteriorate there. I fully expect the U.S. dollar to lose reserve currency status because of the wild deficit spending there and we plan on a 10 peso exchange rate at some point in the future.
We have been living in Los Barriles for 17 years and are now in second home, both built by us.
Our first home was built back when the peso was 10 to one and a three bedroom three bath very complicated home with pool fire pit you name it cost us $325,000 currently in was built seven years ago when the peso was really friendly and it cost just about double. The one thing that is stayed pretty constant is that the price we pay for services Gardener house cleaning, etc. are still much less expensive than the states. The other thing we realize is that southern Baja is over run by gringos. If we go an hour and a half south to Cabo San Lucas the prices are 50% more for food and entertainment pretty much anything that is controlled by tourism..
Homes in los Bareilles that were seven or $800,000 are 2 to $3,000,000. Our food cost are pretty similar to what you printed with San Miguel. Two years ago, we spent a couple of weeks in Oaxaca must say that we spent 30 to 40% less on food and the quality was 50% better than here in southern Baja.
All of this has become pretty much of us so what as we love it here we love the people we love everything about it so we’re stuck and very happy to be so.
by gringos.
I have lived in Mexico City for 12 years now and I do miss the time when the peso was 24 to the dollar but still at the current rate it is still much cheaper than rent is now in pretty much any state in the United States.
I have no plans to relocate.
Ken
For anyone looking for prices 40% lower than Chicago or San Francisco or wherever…those places exist in abundance in the United States. Whatever happens to the peso in Mexico, you’ll still be able to live somewhere north of the border, just not in those expensive places.
I moved to Mexico from living in the US where I was poor and couldn’t afford to live–and that was in the a town and state where things were cheap! Drinks for $4 and meals for $15…exactly what people coming here from big cities in the US (and Toronto etc) spend and exclaim about how cheap things are in Mexico. You could have had those same prices in my hometown.
Before this recent inflation and exchange rates, I spent about 60% of my budget on standard living expenses, which left me about 40% for discretionary things like going out to dinner, domestic travel, shopping etc. Now it’s more like 80/20 so my discretionary (living life) budget has been cut in half. So I’m surviving in Mexico and I’m grateful for that–this wouldn’t even be possible in the U.S. But at the same time, I’m not thriving like I was.
I live in a poor neighborhood, I don’t live even near anyplace gentrified, and after over 2 years in my current neighborhood I’ve never seen a foreigner of any kind. If I tried to live where most ex-pats live, my disposable income would evaporate.
The effect of all this has been much greater for those whose expenses take up a larger portion of their income.
This isn’t directly related but thanks to increases in the minimum wage–which are great for Mexicans!–the minimum income/savings requirements for visa applicants have tripled in about five years while the cost of living has increased about 50% in most areas.
So there won’t be too many people like me immigrating from wealthier nations any more. Right now you need to show a monthly income of at least $4300 USD to move here (for a single person) which is more than enough to cover living anywhere in Mexico, even in gentrified or touristy areas.
Great article Travis. Yes, the cost of living in Mexico has gone up, but one can change priorities and “do local” to live just fine.
Has anyone noticed how most Mexicans are naturally happy and adore the Virgen de Guadalupe?
I never came for the lower prices, and never will.
Those that do can expect major disappointment.
I constantly have to correct my compatriots about costs as they all seem to have memory issues! Yes, things have gotten more expensive everywhere and having just recently made a quick trip to the States… WOW, has it gotten expensive there! Your assessment is spot on whether it be the increase in costs via inflation or currency differences. Regardless, Mexico is substantially less expensive than anywhere up north, and, that is before the quality of your lifestyle here is factored in.
If $18 Big Mac meal is true, Sandborn equivalent in Queretaro is $12 but with better quality, service, and environment.
Big ticket items like a $250,000 house real estate taxe are $600 a year vs $5,000 in Texas; yearly car insurance is double in Texas ($2,200) than in Mexico ($1,100); my electric bill can be $250 in Houston area vs $7 monthly in Queretaro. Adds up.
I used to live in the SF Bay Area in a nice neighborhood with views of the bay. We had 2 modest cars and a modest life style. Sure, food and basic living circumstances were much greater, but house ownership and maintenance, taxes, insurance, were shockingly expensive, and they drove basic monthly expenses into 5 figures. Here in Cuernavaca, a medium-expensive city, our monthly spending is low 4 figures. In the past 5 years our living expenses here have gone from extremely cheap to very cheap compared with SF area. And, yes, Travis has a good point about consumption; we consume less here. However, we have fallen victim to amazon.com.mx.
The choice of goods has sky-rocketed, and next-day reliable delivery to one’s doorstep is the rule. Jeff has pursued us into our lair.
My living experiences in Mexico bloomed in 1958. Since then, the peso versus dollar discussions have been relentlessly misaligned. It is of no difference with regard to the Canada or the USA dollar. All writings about comparisons are flippant and seldom are factual with regards to economic conditions. If a person experienced a $1.00 or a 5-peso haircut in 1952, they’ve no reason to anger themselves in 2024 over the $35 – $65, or NP500 haircut. If the likes of such people had paid attention in high school they would recognize the slogan of international politicians: “In campaign, it’s about thee, In elected office, it’s about me.” NAFTA didn’t fail. The pols just came to realize that they weren’t gouging enough to suit themselves. It happens every 10 – 15 years. That’s history, but the dumbed down get dumber as the vent their opposition. Stupidity is ignorance maintained. Those living in foreign countries have yet to learn the lessons…but they do well at maintenance.
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Hola! Love your articles. I have a son who is a U.S. Citizen and chose to move to Guadalajara a few years ago. He still works for an American company remotely. He loves it there and speaks Spanish fluently. We would love for your newspaper to run an article on any known American companies that are looking for expats already liviing in Mexico for employment or training of new hires etc.
Wonderful life experience for your son to be in Guadalajara. Imagine how well you could live making a $100 grand in Guadalajara which is basically minimum wage now with a degree in California.
Maybe a “Classified Ads” section. HAHAHA
It’s interesting that my Mexico phone, wifi and power bills haven’t changed in 3 yrs.
I hate hearing people say they “live in Mexico.” It’s nice to have a house here but never take it more serious than that. God made a beautiful world. With your savings from being in Mexico the Guadalajara airport should become your best friend to get out as much as possible.
Travis what people often forget is that 55 plus are the wealthiest in the history of the United States. No one from that age group should be struggling with inflation in México.
Noone mentions price of gasoline which is more expensive on average. $US3/gallon in Denver. 24 pesos/litre in most of MX. X 3.8 = 91.2 pesos/16.8 = $US 5.33/gal.
No wonder small motorcycles are so popular in MX. Other things are cheaper so overall, MX wins. Not as inexpensive as it used to be 😃
that is probably the single, greatest irritant i have here, and since it’s a gov’t entity it’s unlikely to change – the PEMEX infrastructure costs alone drives my corporate budget-focused brain insane – in my old neighborhood there was literally 2 PEMEX stations across the street from each other & another within a km
it also amazes me how a lot of natives drive, like gas is free
I know there is a balance I see it when I swing past
Thanks Travis. The longer you live here, the less relevant are comments comparing what things cost up north. Saying it’s “still 40% cheaper” doesn’t address how Mexico has in many ways (dining, grocery shopping) lost its “inexpensive” reputation. A pasta dinner for two with two drinks for $80 bucks is jaw-dropping in how quickly things have gone up. Don’t move to Mexico expecting your lifestyle to be “cheap”, unless you’re willing to truly go native (and that means seldom eating at restaurants or shopping at box stores). Gasoline pushing $25 pesos/liter is also astonishing — over $6 US per gallon and never a downward trending line even when global barrel prices have moved lower. I’m also questioning why imported items have not become cheaper. That’s what a stronger local currency should deliver, right?
Greg, $80 meals. I save those for when I go back to California. Nothing is nice enough in Ajijic to justify that. I hear stories of people spending $3-4 grand a month to live in Ajijic. That is absolutely ridiculous. The quality of life is simply to low for that.
If you are well off and it’s a second home that is different but for your primary residence no way.
I disagree with the use of an exchange rate of 22 pesos to a dollar used for your caluculation for the higher cost to live in MX. For the past 3-4 years, it has been closer to 20 pesos to a dollar even though it has been up to and a little over 22 for short periods. I carefully watch the exchange rate and make changes at an investment house of $5-10,000, but watching where the exchange market is going. In 2021 I averaged about 20 pesos to the dollar.In 2022, I averaged 18.5 pesos to the dollar. In 2023/24 I averaged just over 17 pesos to the dollar. I have been leasing a high end apartment, taking out 3 year leases over the past seven years. My average increase in my “all inclusive” rent is 1% per year. I get hit with higher restaurant bills, tolls, gasoline (although i only fill my tank about once per month if not traveling, Overall, it is the exchange rate which is my personal greatest exchange rate. Where I live , we still have not fully recovered from covid in eating out and entertainment. i do live in a low key, but major tourist area.
Everything mentioned in the article is true, at least for me. Having said that, one of the things I find most affordable in Mexico as compared to the U.S. is insurance. My car insurance here is around $6,500 MXN per year; so just under $400 USD for the entire year. It would be at least $100 USD per month in the U.S. And health insurance from Seguro Social is less than $700 USD per year.
With respect to food, not only is it generally less expensive here, it is also healthier with fewer added sugars and preservatives. And most of it is harvested within a few hundred miles of where it is consumed.
One last thing worth mentioning; in the U.S. is was quite a DYI’er. Not because I necessarily wanted to be, but mostly because I couldn’t afford to hire people for a lot of routine maintenance tasks around the house. But being a DYI’er also meant purchasing and maintaining a lot of tools. Here it is cheaper to hire someone who already has the tools and the knowhow to do those tasks than it is to acquire the tools and do it myself.
Thank goodness we have the incredible fortune to be able to bitch about the rising costs of life’s luxuries, while shamelessly celebrating that our housekeeper, gardener & handyman are still inexpensive. Imagine being a Mexican citizen and having prices go through the roof and yet not increasing your fee for fear the poor gringos will go elsewhere for the service. Sometimes when your blessed, it’s best to complain in silence. I am fairly certain the locals don’t care about me and how comfortably I am enjoying retirement in my 50’s, or if my breakfast cost me more. You know, when they are busy working and will be until they die. And making comparisons to San Francisco, New York & Chicago… US cities where 90% of Americans cannot afford to live. If you complain of any prices in Mexico, you need to have your head examined. We have consumed the best meals, enjoyed great culture, traveled internationally, celebrated the arts. Life is so good, and better in every way in Mexico for those of us lucky enough to be here. Let’s not act like entitled Americans. My grandfather would say every year at tax time; if we paid a lot in taxes, we made a lot of money, shut up, there are others who would be happy to have these problems.