The High Cost To Live In Costa Rica...

Fact or Fantasy?

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For the years leading up to our retirement, pretty much all our research touted Costa Rica as being this unbelievable paradise where one could live like royalty for next to nothing.  And on first blush, a cursory investigation will bear that out. 

But truth be told, once you plant your ass in country and begin your new life here, you come face to face with reality... it may not be so cheap to live in Costa Rica!

Don't get me wrong, our cost of living has dropped by over 50% since moving here.  Initially, it was closer to a 66%, but recent changes in lifestyle and location drove our costs up a bit. 

However, with a little effort we could possibly get back to that magical two thirds number but it will require some changes that Fran and I may not be willing to make.


Since moving here, we have been tracking ALL of our expenses and have a good handle on where our money is going.

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I feel confident reporting on those areas which are higher than, equal to or lower than our relative costs in the United States.




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THERE'S NO PLACE LIKE HOME...

Home and property ownership is significantly lower in Costa Rica than it is back in North America.  While you may pay (out of pocket) the same cash or even more for a place to live, you will generally receive much more here than you will receive back in North America. 

With the real estate economy still in a tailspin, the ability to bargain (especially with gringos who are upside down back in the U.S.) is stronger than ever.  For example, we live in a 2 bed 2 bath, fully furnished house, only 400 meters from the beach, with a pool and a fenced in yard.  We pay $1000 a month in rent.  We pay electric and the landlord covers water and pool/yard maintenance.  Where can you get something like that in the U.S.?

Add to that savings, Property Taxes and Insurance.  For a median priced house in the $200-400,000 range, depending on where you live in North America, you will spend $4,000 to 8,000 per year.  In Costa Rica, you will spend around $500 per year.

It should be noted that Fran and I are permanent renters.  We have no intention of buying property or houses.  However, for those with the cash, the time is right and getting better by the day.  But remember...Buying is very easySelling is hard as hell.  If you have any doubts about the purchase, DON'T!  Rent before buying!

 


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THINGS THAT YOU WOULD BUY IN A GROCERY STORE...

Food Is A Good Thing

If I can make a blanket statement it will be, "your food budget will be the same in Costa Rica as it was back in North America."  With that said, there are items here that cost way less while the price of some items will make your sphincter pucker!  It's all up to you.

If your grocery list includes lots of processed foods from the U.S., expect to pay (up to twice) what you would pay back home.  However, fresh fruits and vegetables can be had at a fraction of what you would pay in the States. 

If your decision is to live healthy, your food budget will be about the same as it was before moving to Costa Rica.  RELATED ARTICLE

 


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Smoke 'em if ya got 'em...

To all you smokers out there... if you are tired of paying $6-12 a pack for your cancer accelerators, you'll be pleased to know that you can contribute to your early demise for much less money here.  Cigarettes in Costa Rica cost about $1.00 a pack! 

So if you still have the need to feed that "monkey," you'll be happy to know you can do it for a lot less in Costa Rica.  J


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Happy Hour Can Be Expensive...

The national beer in Costa Rica is Imperial.  It's regarded as Costa Rica's Budweiser.  One would expect it to be fairly inexpensive.  WRONG!  At the grocery store, expect to pay about $1.25-1.50 per can or $6-7.00 for a 6 pack as opposed to a can of Bud setting you back (in the States) about $0.75 a can.  In a bar, you'll pay $2.50-3.50 for a 12 oz bottle.

Hard liquor is also more expensive here by a factor of at least 40%.  If your tastes extend to higher quality stuff (as do mine)... availability may be unlikely.  But if you enjoy vodka drinks, you can find suitable (non-martini quality) stuff for about $5.00 a liter.  Ya want the good stuff.. be prepared to pay!



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DOCTOR DOCTOR GIVE ME THE NEWS...

Our single biggest reason we moved to Costa Rica was the high cost of healthcare in the United States.  Even with the promises of "Obama Care" looming on the horizon, I have little faith that the United States will ever dig themselves out of this horrendous black hole of a law.  But be that as it may, this is what we are experiencing.

Back in the States:

In the States we were paying $1,800/month ($22,000 a year) for excellent coverage under COBRA (a federal program which guarantees the continuation of healthcare benefits following an involuntary loss of employment).  On top of that we still had co-pays for doctor visits, hospitalizations and prescription medications.  That came to another $8-10,000 per year.  So, just to maintain our current health, it was costing us between $30,000 and $32,000 a year.

Here in Costa Rica:

We are members of the CAJA, Costa Rica's nationalized healthcare program.  Our monthly premiums cost a two-person total of $48 a month or $576 a year.  For that, we pay zero for doctors, hospitals or medications.  WOW... isn't that friggin awesome! 

But wait, that's not the whole story! Like most, if not all nationalized healthcare systems, expect long lines, inefficient processes, adequate medical care and generally performed in a Spanish language dominated environment.  Wait times for routine diagnostic tests and procedures can be measured in months.  Elective procedures can be scheduled even farther out.  And by the way, an elective procedures is any procedure that will not kill you today!

Fran and I have opted to utilize a "blended" option, whereby we combine the benefits of using CAJA with that of a private physician.  This option allows us to see our doctor or a specialist, whenever we want.  No wait time.  Average out of pocket expense for an office visit runs between $40 to see a family physician to $70 for a specialist.  CAJA does not cover private physicians, however, our private physician is licensed to write CAJA prescriptions.  That means we see him if we are not feeling well, he'll write the script, we get it filled at the CAJA Pharmacy and pay zero for the meds.  However, for meds not available through the CAJA, we pay 100% out of pocket.  Example.  Fran and I both take Plavix.  In the States we would get a 1 month supply and our co-pay was only $50.  Here, we get a generic Plavix called Expandia (not available in the States) and pay only $40.  Now what's wrong with this picture?

Here is the bottom line:

From January 2010 through September 2010, we spent $900 for various doctor visits and diagnostic tests.  In addition to that, we spent $2,200 on prescription medications for a grand total of $3,100 in nine months.  That's less than $350 a month or $4200 a year.  Compare that to our obscenely ridiculous U.S costs of $32,000 per year.  We are spending 1/8th of what we were spending back home in North Carolina. 

Now assume we never moved.  Even accounting for Medicare (provided it does not go bankrupt), it would be quite likely that over the course of the next 20 years, we would spend more than $500,000 of our nest egg just to maintain our current levels of health. 

In a nutshell... that was and is our reason for moving to Costa Rica.  Shame on the United States of America for not providing for its citizens!

 


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UTILITIES... The essence of life

Electricity...

Electric power throughout Costa Rica is said to be 100% self-sustainable by way of wind, hydro and geothermal solutions.  Costa Rica does not rely on third-party oil for it's internal power demands.  In fact, we make so much electricity, it is sold off to neighboring countries.  With that said, Costa Rican's pay a fortune to use electric.

Our cost per KWH (kilowatt hour) is charged on a sliding scale, ranging from $0.10-0.30 while the US averages a mere $0.09 overall.

At our first house, we lived at an altitude of 3700 feet.  We had no need for either A/C or heating but we did need to run dehumidifiers in order to combat moisture and mold. 

Now we live at the beach.  We knew our consumption of electricity would increase due to the need for A/C and to maintain our 220v pool pump.  But when it's all said and done, our electric bill in Costa Rica is virtually the same as it was back in the States.  As far as I'm concerned, that's a wash.

Now to be fair... I know people who spend a lot less on electricity but their needs are greatly different than ours.  Suffice it to say, if one lives in a Tico style home and lives a Spartan life, it is very possible that their monthly electric bills can run in the $10-40 range.  But we consume more, therefore we must pay more.  The good news is we can, therefore we do.  n the other hand, I have friends who lived in the western parts of the U.S, ran A/C on a 24/7 basis, had a pool etc. and were spending $700-800 a month in electric.  Today, their electric bills are less than $250.

 


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Water Water Everywhere...

Water in Costa Rica is (for the most part) high quality and very plentiful.  At our previous home, we spent (on average) of $7.00 a month for our water. 

While our landlord assumes the water expense at our current home, the bills are only a fraction of what they would be for a U.S. home with a swimming pool.


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Communicating With The World...

As inquisitive human beings, we are informational sponges.  It is in our DNA to be all knowing, all the time.   In order to do that we must be able to send and receive information at will.  Fortunately in Costa Rica the cost to do that is relatively low.  For example... we have two cellular phones.  Each phone comes with 100 minutes of talk time and unlimited texting.  We pay $7.00 per month per phone for a total of $14.00 a month.

At home, we have a combined telephone/DSL Internet line.  That service allows for unlimited voice and internet use with speeds of up to 2MB down and .5MB up.  We pay (on average) $38.00 a month

And as for cable TV, we have a no frills service that gives us 99 channels with quite a few being from the U.S. or other English speaking providers.  For that we pay $22.00 a month.

All totaled, for cell phone, land line, internet and cable TV we are paying about $75.00 a month.  Compare that to our Cadillac plan with Roadrunner in the States where we received TV, Phone and Internet for $150 a month and two cell phones with Verizon for around $200 a month. That's a monthly savings of $275 or $3300 a year.

Now I know what you are going to say... you're not comparing apples with apples.  We'll you are right to a certain extent.  We are paying less and we are receiving less, but do we really need to be driving a Mercedes when A Toyota gets you there just as nice?



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EVERYDAY CRAP - General Household Merchandise

This is another of those categories that just depends on what you buy and where you buy it.  The rule of thumb says, if the product is American branded, you are likely to pay at least twice as much for it then you would back in the States. 

Paradoxically, buying local products may save you money but the overall quality may very well suck!  That's true especially for consumer electronics.  I also found that there is no comparison between products like American branded Scott Paper Towels, Facial Tissues or toilet paper and their Costa Rican counterpart.  You will pay 50-100% more for the American branded product but when it comes to blowing your nose or pampering your nether regions, plush will always win out over triple grit sand paper.

 


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TRANSPORTATION - Getting Around In Costa Rica

Buying or Shipping A Car

You will be in for a rude awakening when it comes to getting around in Costa Rica.  For starters, be prepared for sticker shock when buying a car here.  Due exclusively to Costa Rica's Draconian import tariffs, whether you buy a new or used car or bring one in from North America, be prepared to spend nearly twice what you would pay for a car in the US. 

If there is any good news here is that the import tax for new cars is based on the wholesale price of the car while the tax on used and imported cars are based on their retail price.

 


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Fuel For The Heart:

Hang on gringos... gasoline costs twice that of the U.S.  By the time you convert liters to gallons and Colones to Dollars, the cost of fuel here runs around $5.00 per gallon. 

If it's any consolation, gas stations are nationalized and all charge the same price.  Generally on a monthly basis, fuel price changes are announced nationally.  Remember the good old days where the gas station attendant checked your oil, tires and cleaned your windows?  That spirit is alive and well in Costa Rica.  So I guess there is a value add.


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Auto Insurance:

Every Costa Rican car carries some level of insurance.  This is guaranteed through a special tax levied each year on every car called the "Marchamo."  It's kind of like a personal property tax decreases as the car ages.  In the Marchamo tariff there is a liability insurance component.   Many other drivers opt to purchase additional liability insurance. 

Minimum insurance will cost (on average) $100 for 6 months or you can opt for policies that include a comprehensive plan.  These average $100 a month.  However, be advised, crimes against automobile property in Costa Rica are widespread. Theft of your contents are NOT usually covered.  As for us, we have decided to go with the cheapest form of coverage.  Sure beats the $2,000 a year premiums we were paying back in the States.


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Keeping Your Car Running:

It's amazing when you look at all the cars that populate the roads here.  While you will see some newer cars, the majority of the vehicles here look to be 10 to 20 years old. 

Costa Rican people tend to fix things rather than toss them aside (like North Americans).  And as a result, they have become very resourceful in keeping things running.  In the time I have owned my car, I have found that the cost of maintenance and repair is significantly lower than in the U.S. with one exception...  taking your car to a dealer for repairs.



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WHO LET THE DOGS OUT?

Veterinarian Services and Pet

If your dog or cat gets sick or needs the services of a qualified vet, prices for vet services in Costa Rica are a fraction of what they are in the U.S.  We had our two female labs spade at two different clinics.  Both sprayings were single day events and cost only $50 each and that included take home meds. 

One of the dogs went in for her annual checkup.  That required a series of injections including rabies, Parvo and Distemper and our total out of pocket for that visit was only $16.00.  That's pretty damn inexpensive.  Compare that to what you would pay in the States.

 


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Dinner Time...

Now feeding your pet is a different story.  If you are accustomed to serving your dear mascota (pet) U.S. branded foods, be prepared to pay out your wazoo.  Our Ashka eats Purina Dog Chow (50# bag for $50.00).  Úpe needs Science Diet due to a food allergy and we pay $50 for a 30# bag.  These numbers are at least twice what they are in the States.

Many of the locals opt to use a local brand of dog food called Super Perro.  But both Úpe and Ashka turned tail and ran.  I have no idea what's in that crap but they sure did not like it.  Úpe actually gave me a dirty look.



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DOMESTIC ASSISTANCE...

Housekeepers and Gardeners

Retirement allows one to shed the things they hate doing in favor of outsourcing those chores to others.  In Costa Rica, this is accomplished at a fraction for what one pays back in North America. 

The current rate for domestic and yard work help generally costs about $2.00 to $4.00 per hour.  We have a housekeeper that comes once a week at 8:00 am, works her butt off until about noon.  We feed her lunch and pay her $14.00.  Fran's happy because she doesn't have to do the floors and crapper.  From her perspective, our housekeeper is well worth what we pay.

Yard work and landscaping work comes closer to the $2.00 per hour rate.  Sometimes I almost feel a twinge of guilt as I kick back, drink a beer and watch these guys work their collective butts off.  But then I realize that I'm 60 years old and I'm retired.  Pura vida!

 


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ENTERTAINMENT...

The cost of entertainment is all over the place in Costa Rica.  Literally.  Much depends on WHERE you are, WHO you are and WHAT time of the year it is.  Let me explain...

An expat, with North American expectations, living in areas like San Jose and Escazu will pay more for things like dining out, bars and clubs.  Organized tours are likely to cost more because of transportation requirements.  And let's face it... if you are a gringo, you are likely to pay more for everything, just because you're a gringo. 

The same holds true if you live in more touristy types of areas along the Pacific coast.  However, friends tell me that entertainment costs along the Caribbean coast are more forgiving on your budget.  Moving out to less populated areas like smaller towns in the Central Valley or down in the Osa Peninsula also tend to be less expensive.

Money Saving Tips:

  • Always ask for a cash discount.  This phrase may save you 10% or more on most purchases, "¿Puedo tener un descuento para pagar en efectivo?"

  • If items are price marked in dollars, they generally are marked up for gringos.  Either avoid buying at that store or ask for a greater discount.

  • Most major attractions (national parks, organized tours etc.) offer significant discounts to Costa Rican residents.  Whip out that cedula.  Depending on the venue, you may experience savings of 50-75%.  As an example, we went to a well known national park (associated with a volcano).  The price for admission was $15.00 (USD) per person.  I asked if they had a discount for residents, "¿Tienes un descuento para los residentes?"  The answer was YES and we paid 1000 colones each (approximately $2.00) to get in.  That was a savings of $26.00!

 


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