Just because you’re traveling or living in a cheap destination doesn’t mean things will be cheaper across the board when you pull out your wallet. Some prices may be more expensive than you’re used to at home.
Does it surprise you to hear that many Mexicans crossing the border legally to come to the USA are simply on a shopping trip? That they are adding to our economy, not looking for a job? Even though salaries in Mexico are a fraction of ones in the USA, residents are coming to El Paso or San Antonio or San Diego to hit the shopping malls. A guy who works for Chihuahua Tourism told me that their capital city is flooded with TV ads for American shopping centers around the Christmas holidays because so many people make the trip then to stock up on gifts.
You will hear the same stories of people traveling across borders for better deals in Europe, South America, and Asia. Prices just aren’t consistent when it comes to physical goods, so sometimes the pickings will be better in expensive countries than in the cheapest destinations. Sometimes the flow will even reverse based on exchange rates, like between Canada and Mexico or Poland and Slovakia.
Here are some general patterns to keep in mind though if you’re looking at moving abroad or doing a round-the-world journey.
Usually Cheaper in the World’s Cheapest Destinations:
Some items and services are a lot less money in the cheap destinations of the world. Most of the time, prices for these goods and services will be significantly cheaper than in a developed country such as the USA, Australia, Canada, or the UK.
Locally grown produce
Services fulfilled by labor (babysitting, house cleaning, a haircut, massage)
Locally made products
Repairs of almost anything (back to that labor thing)
Taxes on purchases in non-VAT countries
Drugs (legal and not)
Public transportation by land
Internet/local SIM cards
Usually More Expensive than in the USA
The reason stock markets freak out when there’s threat of a trade war between the USA and China is that we buy a lot of goods from China, usually with almost no tariffs. Plus despite the political messaging, we still manufacture a lot of goods stateside, in some very efficient factories. We also have cheap gas prices, which holds down distribution costs. Big box retailers squeeze every penny out of suppliers. So we get bargain prices on these things that other countries can’t match.
Computers and smartphones
Clothing and toys from China
Many cosmetics from big multinationals
Imported food and alcohol
Name brand “luxury” goods (including Nike and Adidas)
Name brand travel gear/luggage/clothing/sunglasses
Foreign brand soda
Online shopping and shipping
Items influenced by a monopoly status vary a lot from place to place. Phone and landline internet charges are generally higher in Mexico, cheaper in more competitive markets not controlled by the world’s richest man. On the other hand, utility costs are usually subsidized or break-even, so unless you use an above-average amount of power or water, you won’t pay a lot.
Beer is expensive in some places because there’s one company and high taxes, in others there’s competition and lower sin taxes. Domestic flight prices depend on many factors, including competition and whether fuel subsidies exist.
In a country with lots of dark-skinned people, or where people cover up in the sun, only tourists are buying sunscreen. No company is going to set up a factory to make it locally. Where there’s no culture of drinking wine, naturally wine imports are going to be limited and expensive.
So what does all this mean for you? “Buy local” is not just good for the environment. It’s a practice that will save you money almost everywhere. Eat what’s in season and what’s popular where you’re traveling.
Keep your electronic valuables safe with the right tools (and maybe some pickpocket proof pants) and don’t be posing for selfies in a crowd in rural India when what you’re holding is worth more than a year’s salary locally. You might as well paint a target on your forehead.
Make room in your pack for sunscreen, bug repellent, and your favorite name brand toiletries. Pack the lightweight travel clothes and convertible pants, but remember that you can buy t-shirts along the way for cheap. You can get things like razors, toothpaste, and shampoo for cheap almost anywhere, but maybe not deodorant or tampons.
What have you found to be surprisingly expensive when you were traveling in one of the cheap destinations around the world?