Browsing Posts in Cheap Latin America Travel

Budapest train

What’s the biggest perception difference between an experienced budget traveler and one planning to take off around the world?

The first has learned what really breaks the budget over time. The latter generally has it all backwards.

Here are some paraphrased quotes from people who have sent me e-mails or asked questions on message boards I’ve been on.

- “Yes, I know we’re going to a lot of expensive places in Europe, but we’re going to sleep in hostels.” (Person who had Norway, Denmark, Holland, Belgium, England, France, Spain, Italy, and the Greek Islands on their itinerary.)

- “We’re on a tight budget, but we really want to hit all every continent except Antarctica on our trip.” (A trip that was just 12 months long.)

- “I’m trying to find a cheap round-the-world flight that includes South America, Europe, Asia, and Australia but I’m not having much luck.”

These statements are inherently at odds with traveling on a budget. They’re hoping for a magic bullet answer that is the equivalent of defying the laws of physics. If you don’t tackle the big budget items, you had better have lots and lots of money saved.

You can ignore most of the “Top-10 Ways to Shave Your Travel Costs in Europe” articles that are meant to be click bait. Most of the time they’re just about messing with the margins, the small stuff. It’s like trying to fix the U.S. deficit problem by cutting funding for the arts. To really make a difference we would need to reform social security, truly fix the health care system, or cut defense spending. All three at once to achieve anything dramatic.

hostel prices

For the price of a hostel bed here, you get a really nice hotel room for 2 in a cheap destination.

Location

Budapest is a fantastic bargain. Nobody will ever call Oslo a bargain, or even London for that matter. You can buy a round of drinks for all your friends in Hungary for the price of one in Norway.  The price of a hostel bed in Copenhagen will get you a spacious hotel room for two almost anywhere in Eastern Europe. One nice restaurant meal in Switzerland will feed you for a week in Portugal.

Now take that further and go to Central America, Southeast Asia, or the Indian Subcontinent. Prices drop in half again, for almost everything you could possibly spend money on. So don’t think of how you can shave costs by self-catering and staying at hostels. If you cut the entire “basket of goods and services” cost by 2/3, messing with the margins isn’t necessary.

And as I’ve said often, getting out of the big capital cities will usually help no matter where you are.

long-term travel

Did you really leave home to do this every day or two?

Velocity

The more you’re moving around, the more money you’re going to spend every week, every month. It’s not far-fetched to say that someone visiting 24 countries in one year is going to spend twice as much as someone visiting 12. The one visiting 8 will spend even less.

If those 24 countries are on multiple continents that require long-haul flights, bump the budget up by thousand of dollars. Even in places where transportation is cheap, being on the move a lot requires constant spending on some kind of tickets. If you’re in one place for a month though, it’s just your feet and local buses or subways. Plus when you get to know an area, you don’t have to throw money at hurdles because you’re in a hurry. You can figure out cheaper/better options for everything from lodging to groceries to bus options for leaving town at the end.

Many people setting out on their first round-the-world trip act as if their life is going to end the moment they return home. They have to do it all, see it all, on this one grand adventure. Hey, you’re 28 years old; is this really the last time in your life you’re going to get on a plane and go somewhere? On my three round-the-world trips, I never even set foot in Latin America. Now I’ve been to a dozen countries in Latin America. They didn’t disappear from the map. I still haven’t been to New Zealand. But I think it’ll wait for me.

round the world flight

This route STARTS at $7,250.

Distance

I’ve written a few articles related to my book on traveling in the cheap clusters of the world. This one is getting a bit dated, but apart from Turkey getting more expensive it’s still pretty accurate.

The idea is, you take a long-haul flight to a cluster of cheap countries, then go overland from there. The most common one is to get a flight to Bangkok and then you can hit a half-dozen other countries without getting on another long-haul flight. You can get a cheapo flight from Singapore to Indonesia or a not-so-bad one from Bangkok to Nepal or India, which is the start of another cluster. The cheapest cluster option from the U.S. or Canada is to fly to Mexico or Guatemala and then make your way south by land and boat. For the Brits, a cheap flight to Budapest or Prague can then turn into lots of jaunts by train and bus to the least expensive parts of Europe.

The easiest way to ratchet up your long-term travel budget in a hurry is to try to check far-flung places off your list on one trip. Sure, you may have always dreamed of visiting Japan, New Zealand, South Africa, Israel, and France, but if you’re trying to find a ticket hitting all those areas, it’s going to be the price of a used car, no way around it. Save some for later.

What lesson did you learn the hard way between planning and actually traveling?

Panama beach

Panama can be one of the world’s greatest places to live on a lower budget than you could in a developed country, especially if you’re a retiree. It’s also a place favored by thousands of very wealthy Latin Americans and business tycoons, however. So whether you find the place a bargain largely depends on where you live and how you live.

As I’ve been mentioning lately, I’m working on a book called A Better Life for Half the Price, about moving abroad to a cheaper destination to lower your monthly expenses. Panama doesn’t figure into my World’s Cheapest Destinations travel book except as a brief honorable mention. While it’s cheaper than Costa Rica, it’s nowhere near as good a value as some other countries in Central America. It is a poster child for publications such as International Living though and has been for at least a decade. That’s for a lot of good reasons:

- It’s a very stable country politically.
- It uses the US dollar as its currency and inflation is minimal.
- The banking system is good.
- Health care is excellent and affordable in the cities.
- Taxes are low, including on alcohol and electronics.
- Regulations are minimal for setting up a business.
- It’s easy to get a residency visa.
- The pensionada program for retirees has terrific benefits.

Panama is no backwater dirt-poor country though relying on what they can grow or dig out of the ground to build wealth. There’s a large middle class employed in all kinds of decent-paying jobs, from call centers to quality construction to the Panama Canal to banking. Most multinational companies have a base here and the whole country is like a big duty free zone.

luxury real estate Panama City

I did an interview that will air soon with Taylor White of the Overseas Property Insider Podcast. He’s stacking cash buying and selling real estate in Panama City, so he subscribes to the philosophy of “You’re going to spend what you’re going to spend, no matter where you are.” For some people that’s true and they didn’t move to Panama City to save money. Taylor spends about as much as he did in San Diego. You can spend a few hundred grand on a fancy condo with a view and there are plenty of temptations in terms of high-end restaurants, clubs, casinos, and beach resort excursions. For many, especially wealthy Latinos, the capital of this country is a “work hard, play hard” city akin to Miami. Living here can cost far less than Miami if you’re careful, but you can easily spend as much as you would there if you want.

There are retirees living in Panama City for less and the live abroad magazines and newsletters continually highlight people getting by on two U.S. social security checks—around $2,400 per month. A typical basket of goods and services is lower here, especially domestic help, transportation, domestic food, wine, and entertainment. Real estate is high for the region though as this is considered a “safe haven” investment for Venezuelans, Argentines, and others.

Outside the Big City

There are plenty of other places to live in Panama, however. Many retirees are attracted to the Chiriqui highlands around David and Boquete or the Bocas del Toro islands. Both these areas have far lower prices to rent or buy.

Panama adventure

Former Texan Richard Kongable lived in a few places in Panama before moving to a rural area near Volcan, on the side of a mountain. I tried a few other places in Panama before settling here,” he says. “I like that I never need heat, I never need air conditioning, and there’’s always a gentle breeze. I’m on the edge of a valley, with a volcano on the left and two rivers. I can see islands in the ocean even though it’s an hour and 20 minutes away.”

Richard rented his house for years for $300 a month and thought he was going to have to leave eventually when the American owner put it up for sale. Instead the owner fell into health problems and needed to sell in a hurry, so with no buyers in sight Richard got the 1,600 square foot house for half price: $25,000. He estimates that his family of three spends about $1,700 a month, including car expenses and about $300 a month for his son’s private school.

Retirees Kris and Joel Cunningham pay $385 per month for a house in a nice middle class neighborhood on the edge of David, Panama and they love it. “We have woods and a river behind us, there’s only one way into the neighborhood so it feels really safe. We’re surrounded by local professionals who are just lovely people.”

The Cunninghams were paying $1,200 per month in Sarasota, Florida where they lived before on their mortgage and taxes. If they had been renting, it would have been more. “The house next to us, similar to what we have now, was renting for $1,500 per month,” she adds.

They have been living on her husband’s social security payment and have a little savings from selling their house in Florida. Kris was about to start receiving her own social security payment when I talked to her, which will double their income and enable them to meet the income requirements for the pensionada program: $1,000 for one person plus $250 for each dependent. “It’s already so cheap though, I feel kind of guilty getting all those extra discounts,” she says.

Kris Cunningham says she has been pleasantly surprised by low costs in Panama, particularly groceries. “Food is definitely a great deal, especially fruit and vegetables. If you spend $20 on those in our local market it will be more than you can carry. We paid two or three times more for almost everything at home, including meat and fish. If you buy what the locals buy and cook, living here is very cheap.”

There’s the key advice that applies almost anywhere in the world: eat what’s local and you’ll probably be both healthier and wealthier. The usual advice that goes with that is to avoid imported products. With some of the cheapest wine and liquor prices in the world here though, you don’t have to make any adjustments in what you drink. This is one of the few places in the world where California wine is cheaper than in Napa Valley and Chilean wine is cheaper than in Santiago. (See this post on prices to booze it up in Panama.)

carnitas-mexico

Want to get a tour of Guanajuato with me and chow down on some good Mexican Street Food? Follow that link and sign up if you’re heading my way.

The problem with having a job that you can do from anywhere is that you end up doing your same job everywhere. A big reason my family ended up in Guanajuato is that most of the tourists are Mexican tourists and we actually use our Spanish regularly. It’s also a beautiful place to walk around, with weather that encourages you to be outside almost every day of the year. When I’ve got my head down cranking out articles and blog posts, however, dealing with freelancers and advertisers, sometimes I look up and go, “It’s Friday already?”

sope GuanajuatoSo if you come to Guanajuato and want to get a tour that mixes some sightseeing, market tours, and lots of chowing down, come get me out of the house. We’ll get some buns from a bakery and see where they make them. We’ll tour a local market and then later a larger covered one. We’ll sample carnitas, gorditas, tamales, and more, washing it down with fresh-squeezed juices.

We’ll ride a funicular up to a lookout point and walk down the alleys where people have only one way to get to their home: on foot. Then we’ll have some street stand ice cream and go our separate ways for a siesta.

chorizo tacos

I’ve taken out three groups so far and I’ll post some testimonials on the site later with their impressions of my tour guide and food fact-quoting abilities. Hopefully by now I know a thing or two about the highlights of my adopted town and the best vendors to buy from. Check the rest of the site out here for details: Guanajuato Street Food Tours.

Hasta pronto!

Guanajuato Mexico

One of the views from my house

I moved back to Guanajuato, Mexico for the second time this past August and as a couple readers have pointed out, I haven’t written much about it on this blog. That and a few consulting sessions lately with people thinking about moving to Mexico has pushed me to do some catch-up on that today.

If you’ve got some time, check out the video below to get a sense of why I liked this small city the first time I came here and why it keeps pulling me back. The aesthetics are great and it’s been here since before any English set foot in America. What you can’t really see in that video are two aspects I also love. First, most of the traffic moves through tunnels under the city, so it’s a very pedestrian-friendly place to live. Second, the weather is gorgeous almost all year. We’re at an altitude close to 6,500 feet here, so it can get a little chilly at night a couple months of the year, but the climate is agreeable enough most of the time that houses aren’t built with heat or air conditioning. It’s usually blue skies, sun, and highs around 80.

I can turn down a bit of the stress in my business here because I’m spending less than half what I did in the USA on basic living expenses. The first time we were here we rented two side-by-side apartments for a total of $800 a month, all utilities and internet included. Now we own a house outright, so we’re pouring money into improvements and furniture instead. Here are some hard numbers though for regular monthly expenses:

- Daughter’s private school is a shade less than $300 per month
- We spend about $100 a month on transportation getting her there & back (it’s not walking distance)
- We average about $50 a month on other local taxis and buses.
- Here’s a picture of one month’s water and electric bills, in pesos. The 114 peso water bill is equivalent to $8.77 and the 324 electric bill is equivalent to $25. Gas comes out to about $6.50 per month.

Mexican utility bills
- Drinking water in 5-gallon jugs averages about $15 a month, delivered to our door.
- Internet is $25 per month for 5mbps. I’d pay more for a faster speed, but can’t get it.
- Mobile phone charges (1 with data, 2 regular) $54 for 3 of us
- Our maid comes once a week and cleans the house top to bottom. That’s $62 per month.
- Food varies wildly, but a liberal estimate is $300 a month on groceries, $200 eating out
- Entertainment and fun $200 per month
- Medical/dental come in spurts, but let’s say $200 per month

Property taxes are paid annually, but would be $16 if paid monthly. Our house repairs, renovations, furniture, and other purchases vary depending on how flush we are that month. But if we estimate $600 per month, that puts the total monthly expenses at around $2,160 not counting travel.

I want to emphasize that this is for a family of three that’s not being all that frugal. We eat out far more than we did in the USA, I don’t hesitate to order a beer or two when we’re out, and we take advantage of things like $6 symphony tickets and $4 ballet performances. You could certainly live here for far less if you wanted and many people do. Considering that we were spending $2,000 a month in Tampa just on rent though and another $1,000 on health care, our Mexican living budget feels like a screaming bargain. We can spend another $1,000 on travel, visas, and shopping and still just be up to what we used to spend on those two items alone.

Guanajuato callejon

Within four months of moving back here I’d lost 10 pounds. I didn’t diet, drink less, or go to any gym. Getting around in this city requires lots of walking at high altitude though and like most people, we need to climb a lot of stairs to get to our front door. Above is the entrance to our callejon—the alley that goes up to our neighborhood. When delivery men brought a refrigerator and stove, they had to carry it up these stairs you see at the right. Walking Guanajuato

My day to day work life hasn’t changed much, which is a bit of a problem in terms of getting better at Spanish. At some point soon I need to break off some time and go back to classes for a while in order to advance. I’m just not using it enough each day because I’m holed up in my home office, working in English. (My daughter is taking middle school classes all in Spanish though, so she’s golden.) I try to take a walk each day or go out for lunch to enjoy where I’m living and I have a glorious view from my office window.

I’ll write more on Guanajuato and living in Mexico later, with more of the hundreds of pictures I have sitting on my hard drive. Meanwhile, if you’re passing through, get in touch! If you want to see the city through my eyes and my stomach, sign up for my Guanajuato street food tour.

Want to learn more about living a better life for half the price? Sign up for the Cheap Living Abroad e-mail newsletter.

 

Nicaragua cost of living

$2 appetizer platter at a nice restaurant in Nicaragua

“If you make $1,000 a month, you can drive a small car, take your family out to decent restaurants sometimes, and visit a place like this on the weekends.” That was an offhand comment from my Nicaraguan guide Pablo when we were at the overlook area checking out Lake Apoyo between Managua and Granada. “On that salary, you are middle class here.”

A lot more people are stepping up to that level in Nicaragua as the economy keeps improving and its relatively low crime rate make it a place international companies want to invest. If you’re coming from a developed country though, it’s an incredibly cheap place to live.

I do an annual post and individual country rundowns on the cheapest places to live in the world and there’s one key thing they have in common: most people earn less in that country than most people earn in yours. The big picture really is that simple. If you come from a country where the median income is above $40,000 per year, as it is in the USA, Canada, or Australia, then you’re clearly going to feel richer if you go live in a place where the median income is more like $6,000 a year. Even if you’re just living off a Social Security or pension check.

shopping Nicaragua

1/5 the price of Safeway, Kroger, or Tesco

These official numbers are kind of clumsy, of course, whether you’re talking about median income, per-capita GDP, or some other yardstick. Some “work” isn’t counted correctly, bartered goods don’t figure in, and naturally people under-report their real income if there are tax implications. Still, whether an average worker in Nepal makes $600 a year or $900 doesn’t make a big difference for my point. Compared to the Nepalis you’re loaded, even if you’re making the equivalent of a fast-food burger flipper.

If you’re living in a more expensive place, however, your money is worth less. Your purchasing power is crappy. Per-capita GDP may be almost six figures in Norway, but you’ll pay out the nose for virtually everything you would spend money on. It may be only 1% of that in Cambodia, but you can find a good meal for a couple dollars. In a sit-down place with a waiter. Then in the U.S., you have to factor in health care costs, which are astronomical if you’re not covered by a company health plan. This illogical, for-profit arrangement does not exist in most of the rest of the world.

Which brings us back to my travels in Nicaragua earlier this month. I was working on a few articles on assignment, so I had an English-speaking guide driving me around, one who had grown up in Miami and then moved back to Nicaragua when he was in high school. He wants to get back to the USA at some point, to take his kids to Disney World, but he’ll keep living where he is. His electric bill is usually eight or nine dollars. His house is paid for. His family eats very well on what he makes.

Granada house for sale

House in the center of Granada, for the price of a BMW…

I had coffee with a retired couple living in Granada and I’ll profile them in the book I have coming out later this year. “My pension alone is 3-4 times what the average Nica makes,” Jim told me. We spend around $1,800 a month, which is extravagant by local standards. We live in a big air-conditioned house with a swimming pool and pay $650 a month in rent. We eat out whenever we want, wherever we want. Medical care is so inexpensive here we don’t even have insurance. We just pay for things as they come up. I had to go to the best hospital in Managua for surgery and it was cheap enough that I put it on a credit card.”

Another couple I’ve been corresponding with there has lived in Leon, Granada, and now San Juan del Sur for around $1,400 a month, while having a really good time. They’re sensible with what they spend, but not all that frugal when it comes to having fun. Their housing is only $300 of that.

Flor de Cana

$4 – $8 for a bottle of rum with set-ups in a bar

I like Nicaragua and I could live there, but this is just one country out of many that will have a detailed chapter. It’s one of the best deals, yes, but there are plenty of countries out there where the per capita GDP is 1/4 or less than what it is where most people reading this blog are from. Some of them have pretty good infrastructure too: popular destinations like Mexico, Turkey, Thailand, and Colombia. It’s just that a “middle class life” has a much lower price tag.

After surveying people who have signed up for the Cheap Living Abroad e-mail newsletter, the verdict is in on the book title:

A Better Life for Half the Price

The second and third choices will get worked into the subtitle.

For those who are serious about cutting their expenses in half and upgrading their life in the process, there will be other packages available with worksheets, webinars, and more. Details to follow, but sign up here to get the inside scoop.