SAVING MONEY IN COSTA RICA
How Much Does it Cost to Live in Costa Rica?

An important factor that determines the cost of living for foreigners in Costa Rica is their lifestyle. If you are used to a wealthy lifestyle, you'll spend more than someone accustomed to living frugally. Either way, you will still find Costa Rica to be a bargain.

Despite having one of the highest standards of living in Latin America, purchasing power is greater in Costa Rica than in the United States or Canada.

San José's cost of living ranks close to last when compared to 144 cities worldwide. To see where Costa Rica ranks, see http://www. finfacts.com/costofliving3.htm. The cost of living in Guatemala City or Panama City is about 14 percent higher than in San José. Corporate Resource Consulting, a firm that compares costs of goods and services, rates San José among the least expensive cost-of -living cities in the world. It is second to Quito, Ecuador, in the Americas in terms of afford ability. CNN reports that Mercer Human Resource Consulting also finds Costa Rica an inexpensive place to live.

In most areas, housing costs less than what it does in the United States and hired help is a steal. Utilities (telephone service, electricity, and water) are cheaper than in North America. You never need to heat your home or apartment since Costa Rica's climate is warm. You need not cook with gas, since most stoves are electric. These services cost about 30 percent of what they do at home. Bills for heating in the winter and air conditioning in the summer can cost hundreds of dollars in the United States, neither of which is necessary in the Central Valley. Public transportation is also inexpensive. San José and surrounding suburbs occupy a small area. A bus ride across town or to the suburbs usually costs $0.25 to $0.50. Bus fares to the provinces costs no more than $10 to the farthest part of the country (see Chapter 10). Taxi travel around San José is also inexpensive.

A gallon of regular gasoline costs about $4.20, making Costa Rica's gasoline prices among the lowest in the Americas (To figure out the cost of gasoline per gallon in dollars take the actual price per liter in colones, divide it by the exchange rate in colones and then multiply by 3.8). Only oil-exporting countries such as Mexico and Venezuela have cheaper gasoline. However, you do not really need a car because public transportation is so inexpensive and accessible. If you must have a new car, remember that they are very expensive here due to high import duties. In Costa Rica people tend to keep their cars for a long time and take good care of them. We recommend buying used cars since they are usually in good mechanical condition and their resale value is excellent. Food, continuing education, entertainment (movies cost about $3) and, above all, health care, are surprisingly affordable. Both new and second-hand furniture is priced very low. You will more about these benefits later on.

When you have lived in Costa Rica a while, learned the ins-and- outs and made some friends and contacts, you can cut your living costs more by sharing a house or apartment, house-sitting in exchange for free rent, investing in high-interest yielding accounts in one of Costa Rica's many banks, working full or part-time (if you can find legal work), starting a small business or bartering within the expatriate community. Doing without packaged and canned imported brandname foods and buying local products, eating in small cafés or sodas instead of expensive restaurants and buying fresh foods in bulk at the Central Market like Costa Ricans do can also reduce your living costs. You can also help yourself by learning how to get a better rate of exchange on your money and by learning Spanish so you can bargain and get lower prices when shopping.

If you take lessons from the locals and live a modest tico lifestyle, you can save a lot of money and still enjoy yourself. By not following a U.S.-shop-till-you-drop mentality, you can live reasonably. Taking all of the aforementioned and personal lifestyle into consideration, the minimum needed for a decent standard of living for a single person ranges from $1,200 to $1,500 monthly. A person can indeed live for as little as $35 a day, excluding housing. Some single people scrape by on considerably less and others spend hundreds of dollars more, again depending on what one is accustomed to. A couple can live well on $1,500 per month, and live better on $2,000. Couples with husband and wife both receiving good pensions can live even better. Remember, two in Costa Rica can often live as cheaply as one. Any way you look at it, you will enjoy a higher standard of living in Costa Rica and get more for your money. Considering that the minimum monthly wage is $287 and the average Costa Rican earns only $250 to $350 a month, you should be able to live well.

Here one expats views of the cost of living here: If you go completely native, you can even live on $400 a month, counting $75 a month to rent a room with no bath but kitchen privileges where there is no hot water to disinfect the communal dishes. But would you like it?

Most Costa Ricans eat small amounts of meat, rice and beans, and mostly fruits. They dress cleanly and neat if not stylish. They do not, at this salary, have cars. Their homes are not plumbed for hot water, nor do they seem to miss it. Their children are not given textbooks in their public schools. They ride the bus, they seem happy, their clothes are often homemade, they own miniature washers and hang their clothes out to dry. They often share housing, with several earning family members occupying the same house, making for crowded conditions. The older generations leave a piece of their backyard to the newer generations. When they can scrape together the money, they build a house for the new bride and groom.

On the other hand, wealthy Costa Ricans, live on what seems to be, by observing their restaurant eating habits, their clothing and their large 4 x 4's, in excess of $4000 per month. They buy CD's, eat at restaurants where the tab is often more than $20 per plate, send their kids to expensive private schools costing up to $500 per month, have country places and live in $300,000 homes.

One American retiree stated, Most Americans I know in Costa Rica are frugal, live on a fixed income, drive older cars, and are just getting by. Many have had to get temporary jobs or start their own small businesses. They live on $1,500 a month. You need to realize that this may exclude many perks that we as Americans are accustomed to having: good quality clothes, travel, electronic toys, eating in steak houses rather than beans-and-rice places, using imported condiments and other nice imported foods that double your food bill.

Another foreigner said, The long and the short of it is, it can be hugely cheaper to live in Costa Rica. Like others have said, the average tico family lives on $4,800 a year. They're not wallowing in abject poverty, either. They have plenty to eat, attractive clothing and a clean appearance. They also have a TV, they own their own home and they might have a computer. Nothing is stopping us from also living on $4,800 a year.

The question is how you want to live. It is no different in Costa Rica than in the United States. There are families who live quite comfortably on $30,000 or $40,000 a year, and families that wouldn't feel comfortable spending less than $80,000 (or $100,000 or $150,000, etc.). Some things are more expensive in Costa Rica (goods), some are less (services). You can live very well here for less money than would buy you good living in the United States, but it may not be the same kind of good living'you'd enjoy in the States. Costa Rica is a different country; adjustments are always required.

If you are prepared to shed some of the luxuries you enjoyed back home (i.e., big kitchens, nice bed linens, long luxurious baths, fast food [if you consider that a luxury], high-quality spices, etc.), then you can live very inexpensively. But you will live like a tico, and ticos live in a third-world country. Prepare for the differences, embrace your new life and enjoy every minute of the pura vida, and you can live the good life a la tica (Costa Rican style) for less money than you ever could in the United States.

When you take into account all these factors and others, such as good year-round weather, the friendly Costa Rican people, the lack of political strife and a more peaceful way of life no price is too high to pay to live in a unique, tropical paradise like Costa Rica.

Jim, a fellow expat remarked, Costa Rica is a place where one can live whatever lifestyle one desires and can afford to live. I am a 72-year-old pensionado who has been living in Costa Rica for more than three years now. I am retired on Social Security and live on less, yes, I said less, than $700 per month. I do not feel that my lifestyle is much better or worse than it was in California. In the United States I lived on more than $25,000 a year. Now I own a small plot of land on which I have built a small (750 square feet) Swiss chalet-style log cabin and have a view that many of my California friends would literally die for.

Here is what another expatriate wrote to an on-line forum: I am discovering that it is actually much easier than I would have dreamed to live in Costa Rica on Social Security benefits alone, even though mine are quite meager. I am astonished when I realize that I am living a comfortable middle-class life on less than $1,000 a month. That includes traveling around the country and paying to stay in hotels when friends come to visit occasionally. I am actually saving money while living on Social Security and haven't had to touch my savings. I did come with the intention of simplifying my life, which I have done. I do not own a car. I enjoy taking public transportation. I do not buy every electronic gadget and gizmo that comes down the pike. And you know, I am not missing anything. I feel richer than ever.

Another American stated something similar: I've been living here now for one year (exactly), and I have spent more than $1,000 per month in only one month so far. I didn't expect to live so cheaply. I do not deprive myself of much of anything. For amusement, I travel about the country quite a bit, staying in fairly nice hotels. I eat well. I rent a two-bedroom, gringo-style apartment and have all modern conveniences. I also have a serious book- and CD-buying habit that I support.

The big money-saver for me is not owning an auto. Instead, whenever I want or need, I rent a car or truck and its driver,  for the hour or for the day. I also use public transportation  buses, of course, and taxis,  a lot! I go where I want, when I want but I don't worry about auto repairs, buying gas or insurance, or getting a vehicle inspected every year. I promise that at the end of the month, my transportation costs are way lower than the transportation costs of all my auto-addicted friends. Of course, your mileage may vary, particularly if you cannot imagine living without a car in order to drive to the corner pulpería.

Besides, I've lost 20 pounds in the past year, which I attribute to walking. Remember walking? What a concept! The only problem is trying to walk in places where you can avoid the autos!

I was bragging to some friends about living on less than $1,000 per month. Two of those friends accused me of being a spendthrift.'Both have lived here for more than 10 years, and neither spends more than about $600 per month.

Before closing this section, we want to emphasize that you should not be alarmed by high real estate prices you may hear about or see advertised in English-language publications such as Costa Rica Today or the The Tico Times. This recent rise in land prices is a result of the current land boom and increasing popularity of Costa Rica. Inflated real estate prices do not reflect the real cost of living in Costa Rica, which is still relatively low when compared to North America and Europe . Even more important, the Costa Rican government must keep the cost of goods and services affordable for the Costa Rican people in order to avoid the social problems found in most other Latin American countries.

House (small, unfurnished)........................................................ $400
House (large, luxurious).................................................$1000/1500
Apartment (small, 1/2 bedrooms, unfurnished)........................... $300+
Apartment (large, luxurious) .................................................. $700+
Property Taxes (a year on a small home) ...................................... $100

House (small)................................................................. $50,000+
House (large)................................................................. $85,000+

Electric Bill (apt.)................................................................$15/25
Water-Sewage (apt.)................................................................... $8
Telephone (850 impulses)........................................................... $13
Telephone (cell 200 minutes)....................................................... $24
Cable TV................................................................................ $27

Taxi ............................................................. ¢365 first kilometer, and ¢340 thereafter per kilometer (Jan. 2007)
Bus Fares (around city) ............................................................. $.45
Gasoline (regular gas per gallon)................................................ $3.94
Gasoline (super per gallon)....................................................... $4.11
Gasoline (diesel per gallon)....................................................... $2.80

Maid/Gardener (per hour)...................................................... $1.25
Restaurant Meal (inexpensive).............................................. $5.00+
Soda (a diner or coffee shop) Meal ............................................. $2.00
Restaurant (mid-range)......................................................... $10.00
Banana .................................................................................. $.05
Soft drink .............................................................................. $.50
Pineapple............................................................................. $1.00
Papaya ................................................................................... $.70
Avocado (large)....................................................................... $.50
Lettuce .................................................................................. $.30
Cereal (large box of corn flakes) ................................................. $3.50
Bread (loaf) .......................................................................... $1.00
Tuna (small can) ....................................................................... $.75
Orange .................................................................................. $.08
Rice (1lb.) .............................................................................. $.45
Steak .............................................................................. $4.60 lb.
Quart of Milk ........................................................................ $.95
Beer....................................................................................... $.85
Airmail Letter around ......................................... $.33 to the U.S.

Doctor's Visit ....................................................................$25/35

National Health Insurance (yearly for permanent residents)...... $450.00

New Automobile ...............................................$15,000/$50,000

* These prices are subject to fluctuations.

Money - Banking - Tipping - Paying Bills - Housing and Real Estate Investements - Affordable Hired Help - Health Care - Taxes - Panamanian (Offshore) Corporations - Insurance

"Baby boomers are redefining retirement - and leading the move to a new generation of dream countries"

AARP Magazine

Christopher Howard's The New Golden Door to Retirement and Living in Cost Rica, is important when doing research about moving to Costa Rica.

By Hillary Chura
New York Times
July 30, 2005