Tuesday, May 31, 2011

The Cost of Living in Merida

From time to time Christine and I will have conversations with friends back in the states about what the cost of living is in Mexico. Their are two areas of purchasing in our budget: Necessities and Extras.

Necessities are things like Rent, Utilities, Gas, Car Insurance......the usuals. Then there are the Extras.....things like eating out, Home Depot projects, Bicycles, Trips to the Beach, Extra curricular activities, pets, ......all that stuff.

On a daily cost basis you need less to live here for two basic reasons. One, rent is cheaper and two, you spend less on gasoline for your car because you don't drive as much. Here are our monthly bills, on average:

Rent: $625
Electricity: $175
Water: $10
Cable/Internet: $45
Drinking Water: $30
U.S. Cell Phones: $105
Mexican Cell phone: $20
Groceries: $600
Gasoline (Car): $100
Car Insurance: $30
Private School Tuition: $100 monthly

Basic Expenses run about $1,800 USD or more depending on what part of town you want to live in. We live in Montes de Ame which is a Colonia in the northern part of town where all of the malls and good commercial development is. We are in the part of town that is closest to Progresso, about 20 miles north of us. There are several desirable areas for Expats to live in but most are from the Centro area of the city and outwards more towards the north.

Remember, we are a family of four with two boys. Our sons share a bedroom in our two-bedroom home. We live in one unit of a three unit condo. It's new construction and each unit has a small backyard. We share a wall with one of our neighbors on part of on side of our home. Sound travels through concrete and steel so we have to be careful how much noise we make. In homes here you have to buy your own stove, microwave, refrigerator, washer/dryer, .......anything that has moving parts. Some landlords will provide A/C units in the bedrooms and living area if they can raise the rent. If you provide your own A/C units the cost is less for rent obviously.

The "Extras" of life are flexible on a month to month basis. Depending on what amount of provision the Lord allows us, we try to budget for about $300 in additional expenses monthly. This includes sowing projects for Christine which she gives as gifts to friends, trips to McDonalds for the boys, eating out at places like Chili's or Los Trompos, alms and offerings, ........We generally have a budget for these things and it can fluctuate.

A bicycle costs twice as much in Mexico as it does in the U.S. Non-necessities in stores like Sam's, Costco, and Wal-Mart generally run anywhere from 50% more to as much as two or three times as much as the U.S. Why? Businesses are required to collect 16% IVA sales tax for the Mexican government. They must also pay 30% taxes on all corporate profits to the Federal Government. That means that they must raise prices to offset these costs. And they readily pass this off to the Mexican people. This creates a chasm between rich and poor as the poor cannot afford most items. Minimum wage in Mexico is $80 Mexican pesos a day. That's about $6.75 USD for eight hours of work or about .80 cents USD per hour. Amazing isn't it?

Most Mexicans live off budgets of about $1,000 USD per month. Some own their homes. Some Rent. The ones that rent usually try to keep their monthly rents around $300 to $400 per month, depending on where they choose to live. Some pay much more than that. It just depends. But most are in that range. The one thing that all Mexicans spend money on is clothes. Most dress well. When I say well I mean they are always clean cut, clothes pressed, very clean, hair is perfect, .......This is very important to the people of the Yucatan, even if they can't afford other things.

We run with about a $2,100 USD budget right now. A single person could live here for $1,000 USD monthly easily, especially if you owned your own home. The Peso/USD exchange rate right now is at about $11.75 pesos to $1.00 USD. When I go to the ATM and take out $5,000 Pesos it costs me about $425.00 out of our bank account in the U.S. We pay for everything in cash here, including our rent. We don't have a Mexican bank account right now because we haven't needed it. When the time arises we will probably move in that direction as we feel led. ATM's are everywhere. Banks are everywhere. Also, with ATM fees, your bank in the U.S., Canada or Europe probably has a partner bank here in Mexico that will allow you to make withdrawals free of charge. We use Bank of America and they partner with Santander Banco here in Mexico for their clients. FYI.

Life is slower here. People drive less, talk more, take longer to eat a meal. When you eat at a restaurant the waiter won't bring you the bill unless you ask for it. Maid service runs about $3.00 per hour, depending on what you negotiate. You can hire your maid to cook, clean, do your laundry, ......And if you have a maid's quarters they will stay at your house if you hire her. You can hire gardeners to mow your yard for $8.00. We don't have a maid or a gardener. I would rather do that myself just to keep my hands busy.

Things for Ladies. Manicures and pedicures for a woman runs about $8.00. That's right ladies. $8.00 USD. Christine had her hair done at a salon once in the past year...The cost? About $8.00 USD

TIPS, TIPS, TIPS. Everyone gets tips down here. In most parking lots there are men with red handkerchiefs that help you back out of your parking spot. They get $0.25 or so for the help. You tip the kids that sack your groceries at Wal Mart. You tip the guy that helps you load those groceries. You tip the guy that washes your windows at the traffic light. And of course you tip waiters. I have been told you tip 10% to waiters in Mexico. Christine and I have logged many years in the restaurant business so I refuse to tip that low. That usually means the waiters always remember us at our usual restaurants and always have a smile on their faces when we come in the door.
Taxis to the airport run about $12.00 USD. Much cheaper than in the U.S. where it may run you $50 plus tip for a twenty mile ride. Drinking Water is delivered to your door weekly for a small tip, usually $1.00 USD. A 5 gallon bottle runs $22 pesos. Propane to run your hot water heater, stove and clothes dryer (if you have one) run about $25.00 per month. City water runs about $10.00 per month. It's unbelievably cheap. I am not sure what trash pick up costs. No one has every sent me a bill. I have asked for one but they refuse to give me one. I have heard it costs about $3.00 USD per month. They pick up your trash three times a week.

The cost of Gasoline here is about $2.85 per gallon at the moment. It is much lower than in the U.S. and most parts of the world right now. We don't drive that much. I rarely fill up my tank more than once every two or three weeks. There have been a few months where I only filled up once in a month. This means you only get your oil changed about once every 9 months or so. You can get your oil changed for about $25 dollars, $50 if you want synthetic oil and need about 6 quarts. Car Insurance runs about $30 monthly depending on the vehicle.

Visas are another expense for long-term living here. Non-Tourist Visas are applied for on an annual basis and are good for a full 12 months. FM3's run about $175 annually per person. FM2's run  around $275 annually. Each FM3 or FM2 is good for 5 years but must be renewed annually. Also, remember that in addition to the fees stated you will have attorney fees to processing your visas. I advise people to get their FM2's or FM3's before they leave the U.S., Canada, or Europe. Get the visas in your country of origin if possible. I have heard from others that it is faster and easier. If you wait to get here like we did and use a Mexican attorney you are going to have to pay an additional $100 to $150 per visa for his/her help is getting them done here. FYI.

Private School Tuition varies from school to school. Most private schools here are bilingual. This means that half of the classes are taught in English, half in Spanish. We home schooled both boys this past school year but are switching gears for next year. We just enrolled Joseph in Calvary Christian School this week. The application fee was $200 USD. The monthly tuition is 11 payments of $100 USD monthly. This is very inexpensive for private school education. The downside is the classes are larger. He will have 27 students in his class next year. We made this decision because one, he needs the social interaction and two, he needs the experience socially to accelerate his growth in Speaking Spanish. Joseph's best friend from church goes to this school so hopefully it will be a blessing for him. Some of the teachers are Americans and most everyone in the school is bilingual or working on becoming bilingual, both students and teachers, Mexicans and non-Mexicans.

Oh, and the Weather.....Different than any place I have ever lived. I grew up in Texas where it is very Hot. It's not the hot weather here in Merida that can slow you down....It's that it is hot about 8 or 9 months out of the year, not just 5 months like in Texas. And it is always humid, even when it doesn't rain. We have basically had no rain in 2011. I have seen it sprinkle twice this year. That's it. Nothing accumulating. Everything that is not being watered with a water hose, isn't extremely drought tolerant or doesn't have roots extending 15 feet under ground is completely dead right now. The last time we had a good rain here was about 6 months ago. I first came down to Merida in May of 2010 and it rained twice the week I was here so this drought is not normal per the Yucatecans I have talked to.

Yet it always feels extremely humid here, even when the wind is blowing out of the south. It's very odd weather. If you don't like the heat, well, you won't like it here. We drink water all the time and when we don't we feel extremely tired.

The rainy season starts in mid-June and runs all the way through October/November. During this time you get rain almost every day, sometimes twice a day. It usually rains for about twenty or thirty minutes and then blows on through and the sun comes back out. That's when it really feels like a sauna. But come November, it gets noticeably cooler, especially at the beach where the winds are always blowing pretty hard. The temperature at the beach is also consistently about 8 to 10 degrees cooler, especially in the winter months of November through February. These are the months where you hardly have to turn on A/C and your electric bill goes way down.

This is a little glimpse into our lives and the cost of living in our city. Hope that helps.

God Bless,