Updated 12/10/2020 with the current exchange rates – First, let’s just get our income out of the way. My husband is a pensionado or a retiree. His income comes from social security disability because of a brain injury in 2001. I don’t have much of an income. My blog and photography are mostly for enjoyment although it would be nice if one day it became more. So how does a family of six live in Mexico on $2000 a month? Read on.
What is The Cost-of-Living for Mexico in 2020?
The Mexican peso is low right now and that makes our American dollar go far. When we moved here in October 2013 it was 1 dollar to 12.50 pesos. 12/10/2020 it is 1 dollar to 19.99 pesos. The exchange rate fluctuates a little every day and certain things, like presidential elections and pandemics, cause it to rise and fall a bit more dramatically.
This is our current monthly budget for a family of six who lives in Mexico. Prices are listed in both pesos and dollars, (dollars are rounded to the nearest dollar).
Okay so it’s a little more than $2000 a month! A few months ago the dollar was higher and I swear it was under $2000 a month! (If we were still at 12.50 pesos to a dollar it would be $3264.) Now let’s break this down and add some detail:
- We rent a four-bedroom, two-and-a-half-bath home with a living room, dining room, kitchen, patio, garden, and one-car garage in a simple neighborhood. It is within walking distance to Walmart and the mall.
- Our groceries mostly come from specific vendors like the neighborhood fruit and vegetable stand. Our meat and splurge items like peanut butter and coffee creamer come from Soriana, ( similar to Wal-Mart but Mexican style.)
- Auto includes fuel and monthly cleaning for our GMC Denali. It is a gas hog but we love it and it fits our entire family with room to spare. Cleaning only costs 120 pesos, ($6).
- Wal-Mart is for all household necessities outside of groceries. Including underwear and shoes. We have a Sam’s Club membership, (yes, we have a Sam’s in South Mexico), and I buy things in bulk there, like toilet paper.
- Our utilities include water, electricity, gas, Internet, and cell phone expenses. All of these costs are far less than in the US. We don’t have plans with our phones. We buy monthly packages with minutes and data. The water and electric bills come every two months. Read more about Mexico’s electric bill here.
- My cleaning lady comes twice a week. I pay 300 pesos, ($15), every time and she spends about five or six hours cleaning. I love having a cleaning lady. You might think we should pay her more but that is the standard here and we treat her very well in other ways, for example, I am always giving her clothes and household items we don’t use or need.
- I think the cash, allowance, and charity items are self-explanatory. 400 for charity does not include tips. Tips are a big deal in Mexico and we want to help others so tip money usually comes out of our cash.
- Fun is for eating out, date night, or family time, which is practically on hold right now, due to the pandemic.
- Medical is for doctor’s visits and medication. Some of Brad’s medication due to his brain injury are a little expensive without insurance. But still not as expensive as the US and totally worth it.
- Normally we include a bi-weekly massage for two people in the budget but with Covid19 our massages are on hold. The monthly cost for this is 1000 pesos a month or about 50 USD.
It was brought to my attention that some items are not included such as health insurance, car insurance, and the kid’s schooling. That is a good point. I will elaborate a little bit on this but remember everyone is going to be different.
- Brad has Medicaid in the US because of his disability and because of our low US income the kids and I qualify for free Texas health care, thus we don’t have health insurance expenses.
- We pay for Mexican car insurance on a yearly basis. The cost is 280 USD or about 5600 pesos for our 2003 GMC Yukon Denali XL. We have full coverage.
- We homeschool all our children using online programs. You could homeschool them yourself and use free programs. It wouldn’t cost you hardly anything but we prefer to pay for their programs. For three children, our oldest has graduated high school, we pay about $105 each month for their schooling. That would be an additional 2096 pesos.
I should note there are several things on here that really aren’t necessary if you are on a tighter budget. You could exclude the maid and tighten your budget for rent, groceries, and auto. It would be very possible. When I tell some of our Mexican friends that our rent is 6000 pesos they are surprised. We have a nice home and prefer it that way but you can live simpler. It is possible. Many Mexican families with four kids live nothing like we do because they don’t have a choice. I am thankful for what we have!
We don’t live a substandard life, that’s for sure. Besides our home, we have toys, electronics, and a big-screen TV. We have pets, bikes, and an old but well-maintained truck/suburban. I have a cleaning lady, the kids aren’t lacking, we eat well, and we have extra income for our savings account after the costs above.
There are some things we don’t have. Things that we were accustomed to in the US.
- We have one main vehicle unless you count Brad’s motorcycle.
- We don’t have a dryer. We hang-dry our laundry, rain or shine.
- There is no dishwasher. We are the dishwashers, well mostly the kids ;-)
- We don’t have air-conditioning or a furnace. The climate is very mild here and we don’t need them.
- I cut the boy’s hair myself. I started that in the US and just continued after our move to Mexico.
We buy many used items, including furniture and clothing. The markets here are fabulous for recycled name-brand clothing and Facebook has many groups where you can find clean and well-kept furniture. So we spend money in some places and not in other places and it all balances out.
How Do You Budget and Stick with It?
Never give up and exercise self-control. But of course, something always seems to come up, unforeseen events like I mentioned above. We use the envelope system which I have written about before. We are paid once a month, I get the money we need out of the ATM, and we put it in our envelopes for the month. Each envelope is labeled with an item listed above.
I mentioned we have extra income although I won’t say how much… gotta keep some things confidential. But it’s enough for unforeseen events and our savings. We cut the credit card up a long time ago due to overspending and I never want to have another one again!
You Can Live in Mexico Too!
If our family can live in Mexico, you can too if you have the income. Our cost-of-living fluctuates with the peso but whether it’s $2041 a month or $3264 a month it is definitely cheaper than living in the US with the same house and lifestyle! We are fortunate to have a guaranteed income with Brad’s disability. I say guaranteed but you never know when that could stop and we could end up back in the States. I have no idea what we would do with Brad’s health. I guess I would become a wedding photographer again! Anyway, back on topic, for as long as Brad has his SSDI we will be spending our time in Mexico where the cost of living is cheaper than in the US. It just makes sense for our family.
Hope this helps if you are considering moving abroad. Mexico is only one country of many that are cheap homes for American expats. That is why many retirees end up here. We are trying to make that US dollar stretch as far as possible! And if you consider it we are bringing in outside money for the Mexican economy which these wonderful people can certainly use. Signing off, Tina in Mexico
Originally published October 24, 2016
A ridiculous amount of coffee was consumed in the process of creating this project. Add some fuel if you'd like to keep me going ;-) Gracias!