“How much less expensive is it living in Mexico?”
That is the most common question I receive from friends, family, and TDV readers.
And, it is a question that is impossible to answer in the abstract.
Some capital goods made in the United States and China are actually more expensive here in Mexico. But nearly everything else costs less.
Living in San Miguel de Allende – in the high central desert – we are blessed with a lot of vegetables, all grown nearby. Because most of the food we buy is fresh, our overall food bill is about 60% of what the same food would cost in the United States. Others find the difference less, but they are buying boxes of Kellogg’s Frosted Flakes and other US packaged foodstuffs which are expensive here.
Labor is perhaps the best value. A housekeeper here runs about $3 US per hour and a gardener-handyman about $4 an hour. A friend of ours in Austin, Texas pays her maid $100 US per day and actually thinks she is getting a good deal. I can get the same housekeeper for $100 a week for 5 1/2 days.
I have written for several publications on the cost of living issue over the years, but something I have never compared is the cost of government. Contrary to those who believe Mexico is still a Third World country, it is not. But its government (for reasons beyond the scope of this article) is at least 50 years behind its northern neighbor when it comes to taxing and fining its population into submission.
It has been estimated that a large percentage of Mexico’s economy is cash-based, mostly to avoid the reach of taxes. And, when it comes to punishing those who live here with fines that have become so common north of the border, Mexico mercifully has a long way to go.
A good example is traffic fines.
In Los Angeles, California, the cost of being towed away for being parked where they determine you shouldn’t is $117 for the first hour of the tow truck’s operation and $59 for each additional half hour of towing. The storage fee for your car once they get it to an impound lot is $36.50 US per day.
In San Miguel de Allende, Mexico, the cost of being towed is 275 pesos or about $25 US. The cost of storing your car while impounded is $2.50 US per day. If you can’t or don’t want to get your car out, you can leave it there for up to three years and get a big discount, the total cost being $300 US. The fine for obstructing traffic here is $25 US, $20 for driving without a license and for driving under the influence of alcohol is $220 US. Unless you hurt someone, no jail, no lawyers, just show up the next day with a couple hundred dollars and you are square with government.
The cost of a “driving while intoxicated” conviction for a first-time offender in Los Angeles, California, on the other hand, (with no accident) ranges from $9,000 to $24,000 by the time you pay a lawyer to keep you out of jail. Because of negligent hiring and retention exposure under the laws of some States, the fine may be only the beginning. Many employers in the US will fire you if you plead guilty or are convicted of driving under the influence and many more will fire you if you’ve even just been arrested for it.
Most traffic infractions in Mexico are overlooked and the ones that aren’t don’t dent your wallet too badly. And, unlike the US, most fines can be avoided completely if you know how to pay a “mordida,” that is, a bribe to the officer who stopped you and wants to take your license as security you will come to the police station and pay the fine. The best tactic is to never offer a bribe. More than one gringo has learned that lesson the hard way. Rather, you say in your bastard street-level Spanish, “Officer, would there be a way I could pay you and then you pay my fine downtown?” He will think a moment and likely find that to be a grand idea and will even discount the fine for early payment. His children eat better that night and the government goes without.
Mexico is not, contrary to popular belief, a lawless state. To the contrary, there are many laws here. For example, in 2010 Mexico passed a law that for real estate transactions, cash payments of more than a half million pesos ($38,750) are forbidden and, for automobiles or items like jewelry, art, and lottery tickets, cash payments of more than 200,000 pesos ($15,500) are forbidden. The law carries a minimum penalty of five years in prison and, to my knowledge, has been universally ignored.
For the others, like traffic laws, it costs to violate them, just not very much.
Our friends at EscapeArtist have a new and updated section about living in Mexico, go check it out.
Useful “boots on the ground” info like this is par for the course in TDV Groups which cover locations around the world. If you’re a TDVer looking to expatriate, odds are there’s already a TDV Group that can get you the detailed info you need from the people who have already established a good life and successful business there. ]
Jim Karger is a lawyer who has represented American businesses against incursions by government and labor unions for 30 years. In 2001, he left Dallas and moved to San Miguel de Allende in the high desert of central Mexico where he sought and found a freer and simpler life for him and his wife, Kelly, and their 10 dogs. His website is found at www.crediblyconnect.com.