We're often told that it is cheaper to live in places such as Panama, Nicaragua or Belize than in North America, but is it true? And if so, how much cheaper? A survey titled "Expat Report: Is It Cheaper to Live Abroad?" recently released by Best Places in the World to Retire provides the answers from nearly 400 expatriate respondents. (The survey has a margin of error of plus or minus 5%.)
Participants (mostly from the U.S. and Canada) were asked to compare the cost of living in Central America with the cost of living in their home country. Among them, 43.1% reported that the cost of living in Central America was 25% to 50% less than in their home country, and 34% said that for every $100 they would have to spend in their home country, they would have to spend only $50 or less in their new expat home.
Several categories of expenses helped account for the lower cost of living, and in some cases, there was a lack of certain expenditures. Examples include paying for heat or (in some cases) property taxes.
Michael M., from the U.S., living in Panama for two to five years, wrote, "We paid $600 / month on our house for property taxes in Rockwall, Texas. In Panama, we have another 15 years on the tax exemption," so for the next decade and a half, he pays zero property taxes.
Just how much less expensively one can live abroad was illustrated to us by Linda Jensen, formerly from the U.S., now living in Panama. Linda and her husband, Arne, live in Boquete, a beautiful village in the mountains of Panama where the temperature is almost always around 75 degrees. "It took over $2,400 a month to live in a town in Texas that at that time was 25% lower than the average for cost of living in the U.S. Here we can make it on $1,600 easily."
Happily for our expat respondents, the lower cost of living abroad translated into less worry about money. Asked what the level of their concern about money in their homes abroad, 35.7% reported "much less" and 27.7% responded "a little less." Only 10.7% reported "a little more" or "a lot more," which, of course, could result from many factors particular to the individual.
In general, expats took advantage of the extreme difference in the cost of domestic help by hiring maids and gardeners much more readily than they would have in their home country. A middle-aged woman from Canada now living in Belize wrote, "Labour in Corozal, Belize is very cheap. Unskilled labour is $12.50 US for a nine-hour day. I have a house-keeper! :)"