I recently read an article in Forbes titled, “Quit your job and live abroad in places so cheap you might not need to work.” I was so fascinated by this that I decided to add up the numbers of my cost of living to see how I fared in the scheme of things.

I’m going to give you real, hard numbers instead of talk in vague generalities. Knowing your personal values and being financially literate about your lifestyle is one of the key proponents of living like a millionaire on a retirement budget.

Work and love brought me to live in Merida, Mexico, 27 years ago. So I am not an expat, per se. However, there are plenty of Boomers and young people as well, who are choosing to make Merida their home because of a low-cost, high-quality lifestyle.

Here Are My Numbers

I own my home, so I have no mortgage costs. My yearly house taxes are $175 US. To give you an example of a home rental cost, I have a friend who rents a modern, three-bedroom house with a two-car garage and a dipping pool in the back garden for $550 US a month.

Whenever I dream of going back to the U.S., and look at rental prices for apartments – not to mention houses – quite simply, it freaks me out. What I can afford, I wouldn’t want to live in.

Monthly Expenses

As sweeping and mopping floors in Tropica is not for the faint hearted, I have a maid who comes in three days a week. I pay her an excellent local wage of $180 US per month ($45 US per week).

My gardener comes one afternoon a week to cut my small plot of grass, clean the pool, wash the car and do some handyman work around the house for $60 US a month ($15 US per week).

My mobile phone costs $12 US a month for unlimited calls in Mexico and to the United States. A landline plus Internet costs $23 US per month. My basic cable package is $35 US a month.

I have a small car and spend $28 US a month to fill it up with premium gas. Utilities, which consist of electric, propane gas and water, total $200 US per month. I spend about $400 US a month on food, and that includes dining out – restaurants are not expensive here.

This takes me up to $938 US a month. I did not include the house rental, since I own my home. If I added that in, the monthly total would be $1488 US per month, still within the bounds of my social security check.

Of course the numbers can vary based on the ups and downs of the exchange rate, something to be considered whenever living abroad.

The Big, Necessary Expenses You Can’t Escape Anywhere

The expenses that I’ve shared above do not include the must-have, annual expenses of house insurance ($300 US), car insurance ($500 US) and health insurance. How does this compare with your part of the world? Maybe you can tell me in the comments box below.

Health insurance is everyone’s favorite topic. Whilst I have Medicare to cover me in the U.S., I don’t live in the U.S., so that’s a moot point. I purchased a blue chip, international health insurance policy from BUPA that I can use anywhere in the world.

It costs me $5500 US a year, with a $1000 US deductible per year. (Yes, you read that right: per year, not per illness. And there’s no co-pay.) The hospitals in Merida are excellent. I appreciate the human and caring medical system in Mexico.

My health insurance does not cover doctor’s visits or medications until I spend the $1000 US deductible. After that, everything is covered 100%. So basically, my health coverage costs me a flat $6500 per year.

Traveling is Pricey

Whilst my cost of living is low, I spend money on airfares. Yucatan is far away from everywhere, and if I want to visit family and friends, it adds up. Sometimes there are deals, but not regularly. When I fly, it always takes at least two, if not three, flights to get where I’m going.

And since I won’t do more than two flights a day, that means I’m paying for airport hotels. Spending money on travel is the price of living low cost for the rest of the time in Mexico.

Other Trade-offs of Living a Low-cost Lifestyle, Especially on Social Security

In Merida, there is a local cultural life that is affordably priced, and much of it is free. As an art, theatre and dance lover, I do miss the world class cultural life that those who live in the U.S., Europe and Asia enjoy.

Sometimes I feel culturally starved. However, thanks to cable TV and the Internet, I can get good doses of culture, virtually. I make sure to get my fill when I travel. Thanks to Kindle, my reading expenses have cut down drastically.

The climate in Merida is “challenging.” It is frequently over 100 degrees F and there are other tropical considerations such as bugs, tarantulas, scorpions, mosquitos and mold in the rainy season.

Heat and humidity is charming when you’re on vacation, but difficult to live in year-round. You either love it or you hate it. So add in air conditioning, albeit at tropical low prices, as an expense.

Generally, clothing is expensive in Merida and the options are not very good for a former New Yorker, style maven such as I am! It’s amazing how much time (not to mention money) I save by not shopping or going to malls most of the year. I do shop for clothing and shoes when I travel, leaving town with an empty suitcase and coming back with a full one.

These are all the intangibles to consider when adding up your cost of living. Some people wouldn’t trade their lifestyle for the world. I admire the adventuresome expats who move to a new country and adopt a new culture to make a new life.

It requires energy and fortitude. For me, Merida just happens to be my home and my life as a princess turns out to be right in my budget.

Are you considering moving to a cheaper location in retirement? Would you move to a place simply because the cost of living was lower? What would it take for you to move somewhere? Are you adventuresome? Or happy exactly where you are? How are you surviving on Social Security? Please share your thoughts below!