Every year I do one of these cheapest places to live posts. Some of the info is evergreen, some is timely, but if you want you can check out the posts from 2010 and 2009 in the archives. Many destinations stay predictably cheap, some go up or down a lot depending on exchange rates (see News Flash: Travel Prices Fluctuate).
I’ve gotten a few insights from the comments over the years. One is that some people watch way too much TV and don’t seem to realize that 24-hour cable news thrives on scaring them. The other is that people have very different reasons for asking this question: “Where can I live for cheap?” So this time I’m breaking it up a bit by life situation. That has a huge impact on the answer.
Arbitrage – Earn $ in an expensive country, spend it in a cheap one
For the past 12 months I’ve lived in Guanajuato, Mexico, living on roughly 60 percent of what I spent living in a mid-sized city in the U.S. (Nashville, TN–where I had a 9-year-old mortgage). On that 60 percent we have not had/needed a car, but have lived a much richer life: eating out more, not worrying about the bar tab, having a weekly maid, taking a taxi whenever we felt like it, etc. Our living expenses average around $2,500 total a month not counting long vacations or international business travel. We pay medical and dental expenses out of pocket since they’re so cheap—no need for insurance.
I earn money in the U.S. and from Europe, but spend it in a country where only about 1 in 10 people earns more than $25 a day. There are plenty of wealthy people here and the middle class is rising fast, but it’s still a bargain for most items.
The thing is, Mexico is the 14th largest economy in the world, with only Brazil being bigger in Latin America. So it’s not the screaming bargain it once was and you’ll certainly find lower prices further south. You could really go wild on the arbitrage scale by living in one of The World’s Cheapest Destinations. Apart from Brazil, Chile, Costa Rica, and a few specific cities (like Buenos Aires and Panama City), you could live very well in Latin America for a fraction of what you’re spending in the U.S., Canada, or Europe. People are complaining about inflation and higher visa fees in Argentina, but an article in Americas Quarterly magazine says a college professor teaching 31 hours a week is lucky to make $1,000 a month in Argentina tops. Most have extra jobs on the side as they don’t earn this much.
If you earn $2,000 from some portable job you can take with you, you’re instantly living better than most locals. Take that downstream to poorer countries like Ecuador, Honduras, or Guatemala and you might be looked at as one of the “wealthy elite.” Many expatriates live in those places for under $1,000 a month without trying very hard.
The visa situation changes in other parts of the world, but if you can get that sorted you can take advantage of the same arbitrage in other places. On the new development side though, note that the dollar is faring much worse now than it was a year ago, so Thailand, Malaysia, and some other spots in Asia will cost you more than before. They’re still a fantastic deal though, if you can put up with the regular visa runs. One new spot to consider is Sri Lanka. Long a war-torn place that most people steered clear of, it’s finally peaceful and bargains abound.
If you’re the adventurous type, consider places where lots of apartments formerly filled by foreigners are now empty: Tunisia, Egypt, and Jordan for a start. This would be a great time to kick back in the Sinai for a while…
Living on the Cheap while Vagabonding
If you’re just traveling around the world from place to place, not needing to settle down for any reason, then the cheapest places to travel are generally the cheapest places to live. It gets a little trickier if you need high-speed internet access and Skype to keep some semblance of a business going, but even that part gets easier every year. If nothing else, you can usually get one of those USB sticks through the cellular phone company to receive a signal if your guesthouse/apartment isn’t wired.
The beauty of this approach is that you’re not bound by a long-term lease and you don’t have to be bothered much about short visa lengths in Southeast Asia. Kick back in the real bargain places like Laos, Cambodia, rural India, Nepal, Indonesia. When it’s time to go, just go. Here’s a good place to start: 6 Places to Live for Super-cheap.
If you’re getting paid locally, this is such a case-by-case basis that it’s hard to make generalizations. The trick anywhere is to make more money than you’re going to spend. When I taught English in Turkey, I broke even. Barely. When I taught English in South Korea though, my wife and I saved 30 thousand dollars in a year. So just because a country is cheap doesn’t mean you should move there to work. You may be better off going up a few rungs, whether you’re a scuba instructor, college professor, translator, bartender, or fruit picker. Here are some books on the subject.
If you’ve got cash in the bank and a steady check coming in from a pension, IRA, or social security, you are really in the sweet spot. Some countries want you badly and are willing to throw out all kinds of incentives to get you to come spend money in their country. Cash is king and you will be treated like a king if you set your sites on one of these places, like Malaysia, Philippines, Panama, Mexico, Ecuador, or Belize. Goodies may include tax incentives, free importation of goods, retiree discounts, and an easy path to a residency visa. In some cases you’ll get a discount on plane tickets within and out of the country. Nice! Just put your country of choice and “retirement incentives” in Google. If you’re coming up empty, check for e-book reports that lay out the details in the resource links at the end.
Figure out though if you want an expat center or immersion center. In the former there will be lots of people who look like you, speaking the same language as you, but prices will be much higher. If you pick a place that’s not dominated by foreigners, you’ll get more of a monetary advantage from moving.
Locking in Temporarily Cheaper Real Estate
If you’re a business-minded investor who has the time to sit on a house for a while, this is a historic investment opportunity in many housing markets. Prices have dropped 25-50% in parts of the U.S. because of the housing bubble bursting and to call it a “buyer’s market” is laughably understating the problem in many states. If you were in the market for a beachfront condo in Florida, or a house in Arizona, you’ve got plenty to pick from if you can wait out the turmoil.
Latin American countries have seem similar declines in markets where Americans were buying, from Ajijic to Zihuatanejo and south to Costa Rica and Roatan. Canadians and ever-wealthier locals have taken up some of the slack, but not much. Some markets are out of whack though, like Argentina, where locals are putting all their savings into property because of inflation worries and distrust of the banks.
Prices have also plummeted in places where the economy is in tatters and it’s probably going to get much worse before it gets better. Some of these are very desirable places to live, spots that may have seemed unattainable before, like Spain, Portugal, Greece, and Ireland. Any place that’s been on CNN a lot, like Thailand was last year and Honduras was before that, usually turns into a buyer’s market quite quickly.
Ready to get going? Here are posts with some good resources.
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