I didn’t want to shop for clothes at thrift stores, enroll our kids in a poor school district, or rely on unhealthy takeout. So instead, we relocated south to Mexico, where our monthly outlays plunged from $4,700 to $2,100 the moment we stepped off the plane.
Suddenly, doctor and dentist visits were $40 or less each (total, not a co-pay). Meals for three at a restaurant commonly ran $10 to $25. Our electricity bill fell to $14 a month. Our mobile plan fell to $48 for three lines.
Just as almost every weight-loss program boils down to “eat less, move more,” most personal finance plans are some form of “spend less, earn more.” In both instances there’s a tipping point where unhealthy becomes healthy. If you burn more calories than you take in, you won’t gain weight. If you spend less than you earn, you won’t pile up debt.
We’ve been taught, though, to assume the only fixes for the financial balance are asking for a raise or trimming away anything deemed “extra.”
Cutting back usually means giving up the things we enjoy. It implies discomfort and sacrifice. If it doesn’t sting, you’re not trying hard enough.
There’s another route, however. It can be more enjoyable over time and delivers results faster: Simply change your address.
How We Lived Better for Less
Have you seen those episodes of “House Hunters International” where someone sells a U.S. or Canadian home for $600,000 and buys a larger place abroad for $200,000?
That kind of thing takes place regularly in Mexico, Central America, South America, and across parts of Europe.
It’s not only real estate that’s cheaper, though. Almost every expense falls in a country where the typical resident is less affluent.
It’s less costly to rent, to grab lunch, to get a haircut, to ride the bus, and so forth. It’s not universally true — imported electronics and vehicles can be pricier, for instance — but those extra costs are often offset by much lower prices for things you might not otherwise afford, like a weekly housecleaner.
For three years, my family and I lived in central Mexico in a UNESCO World Heritage city called Guanajuato. It’s a walkable colonial town of about 100,000 at roughly 6,500 feet elevation. The days are generally warm and sunny, the nights cool and pleasant, and outdoor cafés are an all-season option.
All three main U.S. carriers and several Mexican airlines serve the nearby airport. The popular expat hub San Miguel de Allende is about an hour and a half away.
The first year we rented a four-bedroom, two-bath home for $800 a month, utilities and internet included. The next two years we lived in a similar-sized house that we bought for $85,000.
Over those three years our monthly spending averaged roughly $2,100, not counting vacations. That’s about what rent for a single-family home in a decent Tampa, Florida school district costs — and Tampa is often held up as a relatively affordable U.S. city.
Yet our quality of life was markedly higher for that $2,100 in Mexico.
We ate out whenever we wanted and didn’t pore over prices. We regularly attended symphony and concerts. We had a cleaning person come twice a week for $17 per visit. A handyman was available for house repairs at about $4 an hour.
If we spent over $10 at the mercado on produce, it took two people to carry it home. My daughter took a taxi across town to attend the city’s top private school for only $3 a ride.
In Mexico we enjoyed a comfortable life without being wealthy. In the U.S., we often felt strapped even when things were going reasonably well.
Being self-employed in the United States means I paid about 20% of my income on health care for my family — and that was with an Affordable Care Act subsidy. In Mexico we paid out of pocket for routine care and kept an international plan for emergencies. Our health costs consumed less than 5% of my income.
And here’s the clincher: There are places even cheaper than Mexico…
Is Living Abroad a Good Fit?
Millions of non-military Americans live overseas today, and most relocated for lifestyle reasons rather than a specific job.
About a million Americans and Canadians are estimated to reside in Mexico alone. Moving overseas isn’t a fringe decision anymore.
Every month people retire in Nicaragua, launch a business in Colombia, buy a house for $20,000 in Bulgaria, or move their families to Portugal.
Some people take their work with them and become location-independent. They might spend six months in Thailand, six months in Vietnam, and then move on to another appealing locale.
This change isn’t for everyone. Some folks can’t imagine leaving friends and the community where they grew up. Also, if you don’t have savings or a pension, relocation requires some way to carry your income with you. You must be able to take your job, your enterprise, or your skills abroad.
Ideally, you earn in dollars and spend those dollars in a place where they convert into a lot of local currency.
That’s easier than it used to be. There are hundreds of remote roles people perform from overseas, from writers and translators to systems analysts and marketing consultants. Many others operate online businesses they launched themselves.
Expecting to snag a local job dramatically narrows your choices unless you cater to other foreigners—selling property or running a dive shop, for example. If you must earn local wages, your income will drop about as much as your expenses do.
It’s best to move with a job you can do remotely or with a business you can manage from anywhere with an internet connection. If you’re considering the switch and want resources about moving to a new city, there are guides to help you plan and adapt.
Try It Out Before You Commit
If the thought of cutting your monthly bills in half (or better) simply by changing where you live appeals to you, start by researching potential destinations to narrow your choices.
I wrote a book, “A Better Life for Half the Price”, which profiles destinations such as Ecuador, Argentina, Portugal, Hungary, Malaysia, Thailand and Nepal. It outlines both the pitfalls and the perks of relocating to help you decide which spot might suit you.
Then, when a place looks like a strong candidate, visit on vacation — but don’t act like a tourist.
Rent an apartment in a typical neighborhood. Shop where locals shop. Learn some of the language if necessary. Do the everyday things: get a haircut, have pants hemmed. Gauge long-term housing costs.
If you still love it after living like a resident, you’re ready. If not, reassess.
Once you plan a move correctly, this turning point can permanently improve your life. We eliminated $40,000 in debt during our last two-year stretch in Mexico. I’m optimistic about paying for college and socking away savings by doing it again after my daughter finishes high school.
Until then, I’m here in the U.S. doing what’s necessary: working harder, spending less. And enjoying a lot less…
Alex Romero is an award-winning travel writer and author of several books, including “A Better Life for Half the Price.” Read regular posts about affordable places to travel and live on hisCheapest Destinations blog.
