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Posted by on Mar 25, 2015 in Cost of Living, Costa Rica, Moving to Costa Rica, Retirement | 21 comments

Costa Rica Cost of Living – A Busty Beach Budget

Costa Rica Cost of Living – A Busty Beach Budget

Ok, now that I have your attention with that titillating title, I want to discuss a viewpoint born out of last weeks blog post – Costa Rica Cost of Living: Apples to Pineapples. That article mentioned how, when you consider expat stories of living on a smaller budget here, compared with the States, one must take into consideration all factors.

I also mentioned the lack of online content regarding expats who are not on as thin a budget – let’s say those above $2,000. Enter Mike. Mike wanted to provide some fair and balanced reporting – an example of a couple living in the Southern Zone with a budget of $6,000 a month.

One of the problems with the Internet in regards to cost of living is that there is no shelf life for articles or blog posts. In other words, that article that claims you can live like a king on $2,000 a month, the one that is at the top of your search query, could be ten years old and no longer valid. But because it ranks well with the Google…

What I would like to do with this article is to provide an alternative to the “living on Social Security” or small income/nest egg scenario that is typically covered by Costa Rican expat blogs and articles. To do that, I will tell a bit of Mike and his wife’s story, their plans for living here and then detail his budget overlaid with my budget so you can see where the cost differences are.

Let’s go.

Mike and his wife are in their early 50’s, Mike, most recently, was an executive with a couple of start-ups in the tech industry. They were considering both Mexico and Italy to retire to when they found Costa Rica about three years ago. They took four trips covering the country from Guanacaste to Uvita. By the second trip, it was determined the couple would start their retirement in Costa Rica… I say start, as other countries were still on the radar should Costa Rica not be a long-term fit.

Once it was determined to retire to Costa Rica Mike and Julie sold everything except 10 suitcases worth of stuff, and moved to Costa Rica with their dog. They chose the Southern Zone as their home and the couple has determined to spend time in each of several towns in rental homes to determine if purchasing a home or land to build on makes sense.

They have applied for residency and when they moved here they purchased two vehicles. The “city” car – a 4 wheel drive SUV with the luxury of air-conditioning, and a second vehicle an old Land Cruiser that is both a project and a daily driver. It needs to be stated that even though Mike and Julie budget $6,000 they typically only spend around $5,000, under spending in a couple of their budget categories.

Here is their budget and my and Jen’s equivalent:

Housing and Utilities

Mike and Julie
Rent.
$1,500 a month. This amount gets them a 2-bedroom ocean view villa with a pool. Mike states it is certainly possible to rent a place for much less money here and also much more money. With networking, a place could possibly be found for next to nothing by doing house sitting.

Utilities
Electricity – $300, Gas – $20, Internet $30, Sky TV – $60, and cell phone service – $30.

Total: $1,940

Greg and Jen
Rent
$625 a month. This amount gets us a 3-bedroom, 2-bath, 1200 sq ft chalet style home with a great view of the mountains of the central valley. Networking and a long-term commitment allowed us to secure, what to us is, a great deal. Rent includes Internet service, lawn maintenance, and cable TV.

Utilities
Electricity – $40 we have year around ideal temps and do not require heating or cooling nor do we have a pool pump to run. Also, we are cognizant of our energy usage and we “manage” it wisely. Water – $10, Gas – $10. Cell phone service $20 a month – we rarely use even half of this.

Total: $705

Transportation

Mike and Julie
$700 – Sometimes under, sometimes above. Getting the Land Cruiser in good shape has required increased maintenance and repairs.

1) Gas/diesel
2) Riteve – Mandatory annual inspection
3) Marchamo/Private Insurance
4) Maintenance & repairs

Greg and Jen
$50
I want a Land Cruiser to pour money into… really, I do. But until that time comes we are busing it. So, we really don’t have expenses to itemize. We rarely take a cab – so infrequently that it is not a budget item. We go into town maybe 3 times a week at $0.80 each person, each way. Then maybe 2 trips to San Jose or Alajuela a month at $2 each person, each way. $50 leaves us with money left over.

Health Care

Mike and Julie
This is a category that they consistently come under budget.  This is budgeted at $550/mth and includes:

1) Private health insuring
2) Out of pocket healthcare
3) Pharmacy
4) Dental

Greg and Jen
Not a budget item… yet.

We currently “fly by the seat of our pants” as far as catastrophic illness goes. We are looking at options for supplemental private insurance and will be covered under Costa Rica’s healthcare program, caja, soon. We estimate (because of our age and residency type) that once our residency is approved our compulsory caja payment will be around $400 a month – causing us to increase our budget from $1,500 to $1,900 – a significant increase.

As it is, we are relatively young and healthy and other than some dental work, which we paid for out of pocket, we have not been sick nor incurred any medical costs in the 20 months we have lived here. After losing 40#’s and changing my lifestyle I was able to eliminate my blood pressure medication, the only prescription either one of us had.

Living Expenses

Mike and Julie
$950/mth.

1) Personal care
2) Groceries & Alcohol
3) Dining out
4) Shopping
5) Household items

Greg and Jen
$540
This covers groceries, house supplies, alcohol, dining out, and house cleaning services. If we ever go over a budgeted item it is here.

Pet Care

Mike and Julie
$170 a month Includes: veterinary, medications, food, and boarding.

Greg and Jen
We do not have a pet at this time.

And the last category:

Discretionary

Mike and Julie
Like the Health category the discretionary budget for Mike and Julie is almost always under budget. The total for this category is $1,500 and it includes:

1) Charity
2) Golf
3) Entertainment
4) Travel

Greg and Jen
$205
This budgeted item does not always get spent but includes things such as gifts for a party, unexpected travel expenses, or other unknowns.

Totals for the two budgets:

Mike and Julie – $6,000 (typically spend ~$5,000)
Greg and Jen Seymour $1,500

There is no right or wrong way to budget your move here – it all is dependent on what your goals are, reasons for living here and comfort level is. Mike and I agree neither one of our budgets is necessarily correct. Budgets are based on desires and circumstances.

Clearly there is a difference in cost for adding air-conditioning and a pool, as well as choosing to have a vehicle, and proximity to San Jose – should you need to go to the big city. These are some of the reasons we chose to live in the Central Valley without a car.

For us having time to pursue our passions is more important than convenience so we modified our lifestyle to fit the budget that would support that goal.

Thanks Mike for reaching out and sharing your budget with us.

What do you think? Do you have a different perspective or an idea you would like to share? Leave a comment below.

Until next time,

Greg Seymour
Author of:
Living in and Visiting Costa Rica
100 Tips, Tricks, Traps, and Facts

 

 

 

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Gregorio

Greg Seymour is a quitter. At 41 Greg and his wife Jen quit their jobs, sold damn near everything they owned and became Intentionally Unemployed and retired early to Costa Rica.
In addition to writing on this blog, Greg has written for other online publications and has written two popular books about living in Costa Rica:
Greg Seymour Amazon Author Page

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Latest posts by Gregorio (see all)

A Dental Experience in Costa Rica
Costa Rica Cost of Living – Apples to Pineapples

21 Comments

  1. WOW….someone was reading my mind. I’ve been sending you telepathic messages to do this article and BAM, you did it….and with perfection !

    I think there are many ‘Mike and Julie’ types’ out there that merely want to get out of the ‘system’ they are living in and enjoy year round spring/summer climate.

    Thanks again, would love to see more articles like this !

    A topic you may consider at some point….interest rates on CD’s in Costa Rica and what are the risks of depositing a large amount of money in them ?
    Lets work backwards for a second…lets say your trying to cover $1500 month rent (ie offsetting it with CD income), you would need a $300k CD yielding 6% (doable in CR last time I checked).
    Frankly….I’m still not sure why Costa Rica can offer 6% yield on CD’s while the US gives virtually nothing. Sure there is currency fluctuation/risk, but if your living in CR then it really doesn’t matter !

    • So glad I hit a chord and caught your thoughts.

      I would love to write the post about interest rates. I am not sure I understand the risks myself yet. I am getting about 6% and am paying my rent with the interest. Quite nice, but I am not sure what the risk is. There are also other investments that return 10 – 12% – once again, I do not know the risks. I imagine part of the equation is the rate that money is loaned out here – it is outrageous.

      All that to say – let me look into it and see if I can get comfortable with providing that type of information to people.

      • 10-12%….Yes, a realtor I spoke with in Playa Hermosa Guanacaste suggested that was doable, but not insured (FDIC stlye) by the country, whereas the 6% was insured. Your comments make sense, but I’d love to read about anything you can come up with…..seems like an arbitragers dream (ie borrow US dollars and buy CR CD’s)…..I’ll get my bags packed sooner than later !

        • Well….I have the answer to my own question and I’m posting it here for anyone that was also interested in WHY CD’s return a much higher rate than US CD’s.

          The answer is simple….it’s the CPI or cost of living index….whatever you want to call it. The US (albeit nobody believes the numbers any longer) has approx 1% CPI increase. Whereas Cost Rica has a CPI of approx 5%. The CD’s rates typically will maintain a rate just above CPI increase (inflation). Bottom line, if the Costa Rica bank were to pay you in US denominated dollars, you will get 1 or 2%, conversely if you take your CD return in Costa Rica currency, it will yield the 6% or greater return.

  2. As with everything in Costa Rica, the phrase “your mileage will vary” applies. Same goes for “your monetary needs and expenditures will vary!”

    Really all depends on what you’re looking for, what you’re comfortable with and what makes YOU happy. To each their own – and hopefully everyone is equally HAPPY to even have the opportunity to be living in their version of paradise!

    • I couldn’t have said it better myself.

  3. Hi Greg!

    My husband and I are in the planning stages right now in the SSSSSSHHH chapeter(jens book lol) We have so many questions so many what about this and what about that.
    But some of the questions we have are, if we need to get to a doctor while on our 90 day visa, can we and how much would it cost? We are in our late 30’s and healthy but just in case. Also when you say private health insurance and caja is that the same thing? We are thinking we would hold off on getting residency maybe wait until we can apply for the pension.. Not sure we have some thinking to do!
    thank you for your info! love the blog

    thanks,
    The Waggs 🙂

    • Hi to The Waggs,

      I believe (and could be totally wrong) that if you have an emergency you could go to an emergency room and be treated gratis. I have been told this first hand, but do not know it for a fact. If you are concerned about it and are going to be here a while you might want to pick up private insurance – which is different from Caja. Caja is the Costa Rican socialized medicine and is compulsory once you become a resident… in other words you must pay for it.

      It makes sense to hold off on residency. It is a pain making border runs every 3 months, but it is also expensive to apply for residency – especially if you are not sure how long you are going to live here.

      Shoot me an email with other questions if you like costaricacurious@icloud.com.

      Mums the word,
      Greg

  4. Love this very well done comparison of budgets- though this is really more my husband’s area of interest: He liked it, too…btw.

    I love your opening statement and use of the PUNS, besides the fact this was clear and easy to read and understand!

    Nice job young man!
    Jeanie

    • Thanks Jeanie (and Mark). Thanks for reading and commenting.

  5. I also appreciate your including this alternate type of budget to contrast with the typical “how little can I live on” type of budget.

    My wife and I are similar to Mike & Julie, but we are in our early 60s and live in Tamarindo, Guanacaste – we also have an ocean view condo, but we own ours (still must pay over $600 HOA/mo. fee). We own one SUV in CR (vs 2 vehicles in the USA). We spend a little less on electricity than they do – we have A/C but try to use it only one or two nights a week; otherwise we use fans and have some breezes to keep us cool enough. Our biggest expense seems to be groceries-liquor-restaurants. We like to have wine with dinner (although we look for low cost white wines, but still more costly than the USA); we buy quality beef from a meat importer (Nicaraguan beef vs CR beef); and we shop at Auto Mercado, buying a mixture of US and CR products.

    Our ideal retirement was a tropical beach with an ocean view and we are living our dream in CR!

    • Thanks Bill for providing some additional information. It seems this post struck a chord with many. I will try to post more like it in the future.

  6. 25/3/2015

    My name is Kevin, I’m 55 and I moved to Costa Rica Dec 2013 rented a beach house in Golfito for 3 months with a plan to find some property. It was extremely uncomfortable, even though I had air conditioning it was hot and humid, coming from south Texas, Galveston Island I’m not a stranger to sweltering heat. But in Golfito it was like something I wasn’t prepared for.

    Anyway, A dear friend of mine had property up in the mountains near a town called San Vito, after spending some time there, I fell in loved the ambiance of this small town that had all the things I’d been looking for. All year round it’s comfortable for me, I have Air conditioning but in 2 years I’ve used it less than 10 times and only for no more than 3 hours at a time.

    I bought my property 5 kl from town and 2 kl from a main road, it’s right above a river that can be heard easily in rainy season. half hector or little over acre. there were 2 dwellings on the place, 1st house around 1000 sq ft was made into a bodega / tool room / BBQ area and a small apartment. the 2nd home was torn down and I hired a local contractor to build the main house, it’s a 3 bedroom 2 bath home, split buildings with a breezeway or hallway that joins them together.

    I have a well on the property and also have spring water that comes from behind my place, like most of the locals, it’s plastic hose that is used to bring it to the house, so in short, water cost me other than maintenance is less than $100 per yr….. Sky $78, electric $120, phone $45 per month.

    I also have a 2003 cr-v Honda that other than sticker shock of how much autos cost here, It’s insurance cost me annually $175 and riteve or inspection sticker cost $20 per year. Now also living so close to Panama enables me to purchase gas for almost half of the cost it is in Costa Rica.

    So to sum up, after purchasing the property and building my home to my specs cost around $110,000 Auto $13,000 monthly cost including food and gas is under $500 per month.

    I spent years researching for the perfect place to live in Costa Rica, my 1st thoughts were the pacific cost on the beach and then I found San Vito and it filled the bill for me, only an hour from some of the most beautiful beaches in C/R that aren’t crowded if I want some beach time, but the beauty is I can come back to 3300 elevation with temps from 60 to 68 at night and a hot day at 90 and average day 85.

    Hope this helps answer’s questions for some of you and in closing I will say that I’ve had some bumps in the road and for someone that doesn’t speak fluid Spanish there has always been someone to help along the way and other than a few brief times of missing the familiar and family back in the states, I truly love the lifestyle and having access to clean healthy food that has made such a difference in my health and how I feel every day here. It is living in paradise for me.

    Thanks,
    Kevin

    • Thanks for your perspective and info Kevin. $500 a month is impressive, even taking into consideration paying cash for house and car.

    • Kevin….thanks for the info, if you read this, I have a question for you regarding food.

      My wife and I have been vegetarians for years and mostly organic. Which leads me to pretty well know research that indicates Costa Rica leads the world in the use of pesticides for more robust food production. Clearly, there is some kind of fallacy in this idea, otherwise, its health effects would come into play more so than whats told or reported.

      Anyhow…..to my question, is organic fruits/vegetables readily available and are they still priced affordably ?

      Thanks

  7. Greg, this is your best blog ever! This is the specific info I need to get a handle on my future. I can’t wait to meet you and thank you personally….. I’m still a few years away….

    • Thanks Vince. Look forward to meeting you someday. Keep in touch.

  8. I’m starting my own on line travel service business and would like to move to Costa Rica in the next year or two. How do you go about applying for residency? Where is the best place to start, I am from Canada.
    thanks for your input in advance.

    • Hi Laurie,

      I would start 2 places. First go to the ARCR (Association of Residents of Costa Rica) http://www.arcr.net. They have up to date information on residency and the logistics of moving here. There is a forum for questions and quite a bit of written information available for free. Additional help is available through a yearly membership fee.

      Second, I would join a couple of Expat Face Book pages. The responses can be snarky and rude sometimes, but you can also get very useful information:

      Expats in Costa Rica (4800 members) https://www.facebook.com/groups/127573880603797/
      Gringo Expats in Costa Rica (3600 members) https://www.facebook.com/groups/57769307059/

      These resources should get you started.

      Best of luck,
      Greg

  9. What is the best way to find places to rent? I have searched some of the real estate sites, but nothing comes up that is interesting. I did find an apartment in Grecia and from the description is about 2-4 miles out of town, and is $550.00 a month and has a view=so it says. Thanks

    • Hi Barbara,

      In my opinion nothing beats boots on the ground research. What we did when we moved here was to rent a short-term apartment for 3 months with the idea that we would use that time to network to find the best deals. It worked. In 3 years we have lived in three places. The first was the apartment we found online. Then we spent one year in a two bedroom house and the last two years in a three bedroom home. Both homes were not advertised at all. We would have not found them online or via a realtor–only by networking and word of mouth.

      A benefit to finding your rental this way is you will most likely get a much more favorable rental rate than if you went through a site or realtor.

      We live up on one of the ridges 8 miles from town. The views are incredible and the weather much cooler than closer to town. I assume 4 miles out would be similar… if it is on one of the ridges (San Luis, El Cajon, San Miguel, etc..).

      Getting a short term apartment in the beginning also allows you to move on easily if you find the town is not a fit for you.

      I hope this helps,
      Greg

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