May 23 2011

Update on Our Cost of Living in Costa Rica

Instead of trying to explain the cost of living hypothetically, I thought I would instead explain our cost of living as it actually is for us.

At this point, we have been in Costa Rica a little more than two years, and living/renting in “the cabinas” for two full years, so we have a pretty fair idea of our expenses and monthly budget.  Again, we strive to live the “retire for less in Costa Rica philosophy but costs are always relative to your personal circumstances.  What’s less for us may still be high for you.

There are several things that are going to be lower than in the States, but ultimately it depends on your lifestyle.  If you truly want to change your consumer habits and simplify, you will obviously lower your costs.  Several areas of savings will be:

  • Gas and electric
  • Rent or mortgages
  • Health care
  • Food

Here is how it breaks down for us. First of all, my Social Security is $924 per month, but our monthly budget is approximately $1700. We make the difference up with savings, giving tours, and our Internet business.  Our rent is $600 per month for a small two-bedroom cabina.  The rent includes:

  • Sky satellite TV
  • High-speed wireless Internet
  • A gardener to take care of our beautiful surroundings
  • Utilities
    • Propane gas for cooking
    • Electricity for hot water, lights, and refrigerator
    • Water
  • Washer and dryer (this is communal, so it’s shared by residents…presently four long-term residents and three vacancies
  • Weekly house cleaning – a nice housekeeper cleans our cabina every Friday, changing sheets and towels, sweeping and mopping floors with disinfectant, and cleaning the kitchen.
  • Alarm system for security
  • Furnishings – including two queen sized beds, bed linens and towels
  • Kitchen with gas stove, refrigerator, microwave, coffee pot, and dishes/utensils for four.

Naturally, gas and electric is $0 since it is included, so there is a big savings.  In Baltimore, where we lived, gas and electric was going up every year with no end in sight.  We averaged over $250 per month, with some winter months close to $400.  God knows what it is now!

Food: we spend approximately $300 per month on food, paper/cleaning/laundry products, fresh flowers, and wine. We were thrifty in the States but are spending less here in Costa Rica.  Our eating habits have changed very little.  We always ate a lot of fruits and vegetables, and of course in Costa Rica, we still do.  Fruits and vegetables are beautiful here and cost very little.  Meats on the other hand are close to what we paid in the U.S., with chicken being more expensive.

So what we did was reduce our meat consumption to about four ounces per meal, though usually we only have meat at our dinner meal.  The exceptions are the days we go to the beach, about twice a month as it’s only 45 minutes from where we live.   At the beach, we often cook beef strips, hot dogs, or chicken on one of their grills and really chow down.  Of course, we always have to bring some bananas to feed the monkeys in the trees who come down to eat out of our hands.  Bananas are cheap, but it falls under entertainment anyway.

Another huge area of savings is health care.  Our present monthly health insurance cost through the Caja, Costa Rica’s national, universal health plan is $42 monthly for both of us.  Recently, we were able to get this payment reduced from $78 monthly. In addition to the $42, our out-of-pocket costs are approximately $80 more for a prescription that the Caja does not carry, plus another $10 for a health food store product that helps me avoid kidney stones.  Boy, is THAT worth it!  So Gloria and I are trying to work the system to its fullest while trying to use what is available in our local area of San Ramon – doctors, dentists, etc.

Back in the States, our monthly health insurance premium through Cobra would have been almost $800 per month, not including a prescription plan, and about $1000 per month including prescriptions but with high co-pays. When Gloria was working full time in the States, our health insurance premium came to approximately $180 per month, plus co-pays for doctors and medications.

We believe it is this one area, health care, that has people in the States most afraid.  I know that it scared us.  The costs are staggering and the uncertainty about the future can be very scary for many.  Ah, yes, the future of health care in America – who knows!

Summary of big savings areas compared to what we spent in the States:

We keep a spreadsheet will all of our monthly expenses from rent right down to tips for the parking guys.  Here are the summaries from our spreadsheet for three recent months:

Expenses for January 2011

Expenses for January 2011

The expenses under “pets” include kitty litter, food, and treats for our two cats, and vet bills when necessary.  Yesterday we took Tori, our two-year-old cat to the vet because she had been bitten by an animal of some kind and it appeared to be infected.  The vet examined her and gave her two injections, an antibiotic and something for the pain and fever.  We gratefully paid the 4,000 colones ($8) and promised to come back in two days for more antibiotics and a follow-up exam.

Personal care expenses usually consist of our visits for haircuts and the like.  I get my hair cut for 1,500 colones and a beard trim for 500 colones (a total of $4).  Gloria gets her hair cut and colored for 10,000 colones and a pedicure for 5,000 colones (a total of $30).  We don’t spend a lot on clothing as we brought more with us from the States than we can wear.  When we do buy items, it’s often from the local Ropa Americana where we’ve bought almost new sweatshirts for $2 and a denim jacket for $3.  Gloria often needs to buy new flip-flops for about $4 as she practically lives in them – no hose and high heels for her!

Expenses for February 2011

Expenses for February 2011

Transportation expenses include car insurance (about $320 every six months – this insurance is optional and we plan to reduce this cost by $100 next time by dropping some of the coverage), gas (currently $5.67 per gallon, with usually two fill-ups per month), parking, tolls, bus fare, an annual inspection (Riteve, about $20 if nothing is wrong with your car), and annual registration (Marchamo, $160 for our car, but the amount is based on your car model and year – it decreases every year), and of course, maintenance as needed.  Here in Costa Rica, the roads are generally not in the best shape, so your car takes a beating.  Brakes, shocks, and clutch, in addition to regular oil changes, need to be closely monitored.  Auto parts are expensive, but the labor is cheap, opposite of the U.S.  Having a car is optional in many places in Costa Rica because of the great bus system, and you can save a lot of money by not having a car.

Expenses for April 2011

Expenses for April 2011

Miscellaneous expenses include language lessons which one or the other of us is constantly taking.  We pay $70 for a block of 10 hours at the local Green Mountain Academy where we get private lessons from a professional instructor.  For us, this is a priority, and well worth the cost.
As you can see, eating out can vary quite a bit.  If we are hanging around San Ramon, it’s less, but if we are visiting San Jose or one of the tourist areas, it can be more.  Often, when we are in San Ramon at lunch time, we’ll get an inexpensive lunch at the Central Market – just $4 for both of us. You can read about it here.

As I mentioned in the beginning of this article, your expenses will depend on the daily choices you make.  If you want to live at the beach, you will need to pay the higher energy cost for air-conditioning.  If you live in one of the wetter areas, you may need a dehumidifier.  If you want the conveniences you had in your home country like a dishwasher and running a clothes dryer whenever you want, your electrical bill will be higher as well.  We chose to live where we live because we don’t need heat or air conditioning, and avoid running a dehumidifier because we keep our wardrobes small and hang our clothes out in the morning sun during the rainy season.  We enjoy taking the bus with the locals, especially when we are going into San Jose, so we reduce the cost of driving our car.  We also rent in a location where all of our costs are included.  But if you want premium Satellite TV or daily housekeeping service, you will pay more.  We choose to live simply and for less, and we’ve never regretted the choice.

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