Costa Rica: What’s the Cost of Living?

img_2507My main home at the moment is Costa Rica. I’ve been spending 3 to 5 months of the winter here for the last few years, and this year I’ll be here for over 6 months.

After that, I will be traveling around the world for around a year. Then, I’ll probably come back to Costa Rica to settle here semi-permanently, probably spending 6 to 8 months a year here, and traveling to other places or visiting North America the rest of the time.

A lot of people wonder what the cost of living is down here. They fancy a simple life in the tropics, and would like to be able to do this for a fraction of what it’d cost in North America or Europe or Australia.

First of all, there’s no doubt that Costa Rica is a cheaper place to live than all other first-world nations. However, a lot of the savings come from the fact that Costa Rica is still a developing country.

It may not be a “third-world” country (you won’t see abject poverty here like you do in Mexico or Honduras), but it is certainly not a first-world one either. “Second-world” would probably be the best description, but that doesn’t mean much!

The average Costa Rican (most commonly called “Tico”) is friendly, hard-working, welcoming to foreigners and happy (the Happy Planet Index survey classified Costa Rica the “happiest country in the world” recently).

Most Costa Rican families earn less than $10,000 a year. Even a well-educated person might only earn $1000 to $2000 a month. Construction workers, police men and other similar jobs get less than $500 a month. Yet, almost everyone seems to be well-fed, well-clothed and clean and not lacking in the basic necessities.

Certainly, it would be possible for a couple to live on less than $1000 a month in Costa Rica, with a higher standard of living than in North America, but most foreigners will not be able to do that, and here’s why:

1) You could buy a house really cheap, or rent a “Tico” apartment, but it will be lacking in some basic things that most Westerners (including me) take for granted. For example:

– You won’t get hot water running out of every faucet. Instead, it will be cold water. For your shower, you’ll have a shower heater that gently warms the water as you take a shower, which saves you a lot in electricity but won’t be anything like the good hot showers you’re used to.

– Most Tico families live packed in small quarters, by American standards at least. A Tico house or apartment may be too small for your needs.

– Tico-qualtity construction. It’s not that the houses are poorly constructed here, but rather that the attention to quality and details is not the same. For examples, many Ticos don’t think twice about putting a tin roof that looks terrible and is quite noisy when it rains (more on noise later).

2) Ticos have a higher toleration for noise, but do you?

I found that the average Tico can stand much more noise than the average North American. In many Tico neighborhoods, there’s a big problem with dogs barking at any hour of the day or night. The average Tico doesn’t seem to care, but it personally drives me completely crazy! You might also hear motorcycles early in the morning (most Costa Ricans wake up between 5:00 and 5:30 a.m. and are not tiptoing around just because you like to sleep until 8:00, fireworks at night, roosters that seem to have lost their inner clock and announce the “day” at around 3 in the morning, and more.

I know some Americans that can live in the middle of all of this, and I even did it myself for the experience of living in a Costa Rican community, but  habits acquired during years of upbringing in a quiet subburban Canadian neighborhood are impossible for me to eradicate.

I can stand some noise, but dogs barking all night drive me crazy. So like most expats, I live in a quieter part of the country, and of course, I pay a premium for that peace.

3) The average Tico lives on mostly rice and beans, some meat, and not a whole lot of fruits and vegetables.

You could live on almost nothing in Costa Rica if you ate like the Costa Rican. Then, your monthly food bill would probably not be higher than $100 for two. This would buy you a lot of rice and beans, some vegetables, some meat, and cheap sodas. This is not the worst way to eat, but certainly not the healthiest. (They consume a lot of sodium on a daily basis in seasonings)

Because of my extreme diet of mostly raw foods and fruits in massive quantities, my food bill is much higher than if I lived on the Costa Rican diet. However, I calculated that I still save about 30 to 40% in my food costs by living here.

Fruits and vegetables are dramatically cheaper than in North America, and much fresher too. However, buying any imported foods will jack up the price. I could spend a lot less if I didn’t occasionally indulge on some imported organic seasonings, organic dates for recipes, and other treats.

4) The average Costa Rica lives without a car. Can you?

Driving a car is obviously a big expense. The average Tico doesn’t own one, because they are too expensive. Brand-new cars in this country are more expensive than in America by about 30 to 50% if not more, because of high import taxes. Most people get around by bicycle, buses and sharing rides.

I did live in Costa Rica for two years without a car. I would occasionally rent one in order to do some weekend trips. But I also lived in a more densely populated area where owning a car wasn’t as important.

However, not owning a car can seriously limit what you can do and where you can live. Most nice places are a little out of the way on little dirt roads.

I now have a used Toyota 4Runner and honestly I couldn’t be without it. First of all, the beautiful place where I live would not be reasonably accessible without a car. The car allows us to easily shop at the farmer’s market, go to the beach hassle-free, visit the country, pick up our mail, etc with enough room for us and all of our stuff.

The good news is that although brand-new cars are expensive, there’s a good market for used cars, and they are often well-maintained and will last you a long time. With no cold and snow, cars can be kept for longer than up North.

So let’s be honest:

Most Westerners are used to a high standard of living. There’s nothing wrong with that, and obviously you can’t expect to suddenly lower your standards when living in another country.

I do enjoy the slower pace of living in Costa Rica, and my life is a lot simpler when I’m here. I don’t care as much about the latest gizmo, and I spend a lot more time in nature enjoying simple things.

However, I do also enjoy beauty, convenience, peace, quiet, security and comfort.

I rent a condo that would be completely out of price for most Costa Ricans, but quite inexpensive compared to what the same thing would cost in North America (we basically feel like we’re living on a little resort, with a pool and jungle nearby, and a completely modern furnished condo with two bedrooms and modern ameneties, for less than $40 a day!).

I drive a car, but spend a lot less time driving than I did in Canada, and more time walking and exercising.

I buy quality food, but it costs me much less than in Canada.

I order stuff on Amazon (like books and kitchen gadgets), and get it shipped to a private mail service with an address in Miami that redirects to Costa Rica and handles customs for a reasonable fee.

I enjoy a great standard of living, but overall spend about 25 to 30% less than I would in Canada, and considerably less than I would in Miami or other more expensive city in America or Europe (where the savings would probably be in the 40% range).

I could spend a lot less than that if I lived like the average Costa Rican, of course, but then I would be giving up a lot of quality of life.

Overall, Costa Rica is an affordable destination for living and traveling. Basic but clean rooms can be rented for less than $20 a night, and the mid-range options will give you more for your money than you would get in Western countries. For those considering retiring, a couple could live pretty well on $1500 a month. It would be a pretty frugal lifestyle, but quite luxurious by Costa Rican standards. $2500 a month for a couple is more realistic for the standard of living most foreigners are accustomed to.

If you own your own house, or grow your own food, you can considerably cut down this monthly budget! If you have other questions about living in Costa Rica, let me know in the comments.

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