Which Lifestyle Would Cost Our Family Less - Oregon or Costa Rica? - Part 2: Non-Tax Expenses

Comparing Non-Tax Expenses

In this part, I include estimates of monthly costs for food, medical, vehicles, utilities and housing. Part 1, about tax costs, is here.

Food Prices

Comparing food prices between Costa Rica and the U.S. is a complex business. Most expats experience sticker shock in part due to the included 13% sales tax and the fact that so much food in Costa Rica is imported. Want a box of Apple Cinnamon Cheerios? That’ll be about six bucks please. Can you get by with 1-minute oatmeal? Good, because that’s only about 75 cents for a 200g bag. If you look at food here in a 1-for-1 comparison to U.S. products, Costa Rica loses.

 

Costa Rica Farmer's Cheese, available everywhere

Dairy products are about the same or higher than in the U.S. because producers are protected by steep tariffs on imported milk, etc. from, say, Nicaragua. About the best you can do by weight is local farmer cheese at $2.15/lb. but it’s only aged 30 days. We found one store with what we consider a smoking deal on run-of-the-mill sharp cheddar at $6/lb. Many other cheeses are 50-100% more, especially artisan cheese.

Judging by a flyer from our once-local Fred Meyer store in Oregon, I’d say meat prices are on a par in each country, but canned tuna here is out of sight. You have never seen more ways to can tuna than in Costa Rica. They mix it with almost anything to reduce the actual fish content and lower the price.

Except for imported fruits (e.g. grapes), Costa Rica generally wins hands down in the fresh fruit and veggie department. They are plentiful, many are grown locally and sold in farmer’s markets and the variety is stupendous.

Granadilla fruit. Ignore the frog-egg look, it's delicious

That does not mean norteamericanos will find their favorite hybrid apple or peach, but they will find cheap tomatoes and lettuce, a large selection of potato-like tubers, onions, carrots, etc. and a huge choice of tropical fruits such as papaya, pineapple, mangos, berries, bananas (more kinds, more delicious), plantains and many fruits you’ve probably never seen such as guanábana, cas, mangosteen, matasanos, maracuyá, guayaba, guava, granadilla (looks like frog eggs), … well, you get the idea. Depending on your property’s elevation, you can grow many of these yourself.

If you can adjust to a diet more like what locals eat including lots of fresh fruit, like to glean roadside fruit and do a little gardening you will have a lower food bill compared to what you spend in the U.S. If you can’t, there are stores for that, namely AutoMercado, but be prepared for a lighter wallet.

If you want another take on food prices, I highly recommend Paul Yeatman’s blog Retire for Less in Costa Rica as he often tabulates his and his wife’s total expenses by the month and does a great job at it.

Vehicle Costs Are Decidedly Higher in Costa Rica

I’ve been over the ground of vehicle costs in Costa Rica before. They cost a lot to buy, are a bit less in terms of maintenance because of lower labor costs (in spite of increased wear and tear) and fuel is still the most expensive in Central America if not Latin America. Overall, amortizing the initial cost, I’d say owning a car is going to cost you 25% or more than in the States.

Medical Costs Might Be Higher in the U.S., Might Not

Caja Costarricense de Social Seguridad

As residents, we are obligated to pay a monthly premium of $95 (that is income based by the way) to Costa Rica’s universal health care system, known colloquially as Caja, whether we use it or not. If we could take full advantage of the Caja (many expats do), our health care costs here would probably be much lower than in the States, but the tradeoff with Costa Rica’s universal health care system is a severely reduced level of service in most parts of the country.

To be fair, Caja continues to improve, and some areas have it better than others, but we still prefer private medical care, which is abundant, good and about 25% the cost of U.S. retail. That percentage goes for dental as well. We do not carry any other medical insurance, but the cheapest I’ve seen is $100/month.

In the U.S., before the ACA was enacted, our insurance would have been nearly as much as our mortgage payment and without it, we faced the risk of being wiped out if someone in the family became seriously ill. That situation has changed for the better in our income bracket.

If we were to move back to Oregon, we would qualify for a special category Silver-CSR plan. That flavor caps the total family premium at a percentage of income and has a reasonable deductible. If we infrequently needed to approach the deductible limit, I estimate our health care costs would be about equal to what we pay here in Costa Rica using private care.

In fact, a GP doctor visit or specialist visit in the U.S. would actually cost less than it does in Costa Rica with a Silver-CSR plan. Naturally, this situation is highly dependent on the details of your personal situation in terms of health and income.

Utilities

A comparison of bills for gas, electric, water and Internet leave the U.S. a little short. We had a modest home of 1,500 sq. ft. in mild-winter Western Oregon. We brought the windows and insulation up to code and installed a high-efficiency gas furnace and water heater. If I recall correctly, we paid an average of $160/month for gas and electric. Water was around $20/month and 2Mbps Internet around $40/month. We didn’t have cable TV there, don’t have it here.

 

Costa Rica Utility Worker

I’ll allow $20/month for our spring water bill counting tank amortization and ongoing maintenance. Our electric bill is $120/month and that is for only about 500 KwH. Thus, we save $80/month on utilities compared to our Oregon home.

 

Housing

I’ve always said that health care and housing are Costa Rica’s two biggest bargains compared to living in the U.S. For lower income families, however, the health care argument is now weaker, but the housing bargain still remains.

 

What I had in mind, but the wife had other ideas

We were, in 2008, able to build our own custom home for about $50/sq. ft. The seven-plus acres of forest and view property we have here, we would be unlikely to afford in Oregon. If you are a renter, the bargain is even better, especially in rural areas, as Costa Rica seems to enjoy an unusually favorable low ratio of rent-to-purchase prices.

And housing is at the center of what we consider an improved lifestyle, which brings us to the final, subjective, non-financial evaluation of which place is “cheaper.”

The Choice Comes Down to Lifestyle

In an expenses-only analysis, I’d say between taxes and non-tax expenses not counting housing, Costa Rica usually wins, but not by a huge margin, at least for us. However, I know a lot of expats here claim to live on about 60% or less of the income they needed in the States and I believe them.

The more you can adapt to local conditions and tone down the marketing programming every U.S. citizen is subjected to, the more you will save. If you can forgo a car, for example, and use the widespread public transportation here, it’s a no-brainer.

Non-Financial Advantages

You can’t measure everything by monetary criteria though. Being able to jettison our mortgage and take advantage of generally less expensive living expenses here was key to being able to retire early, which is a huge plus for me. But, there was also the ability to achieve a life-long dream of living in exotic surroundings in a year ‘round mild climate.

Other advantages include:

• Living closer to nature and partaking in small-scale farming. Bird-watching and growing our own coffee, bananas and tropical fruits are big kicks for us
• Getting to know some of the most friendly and helpful people on the planet
• Due to lower energy needs, cleaner energy and our re-forestation efforts, we enjoy a carbon-neutral lifestyle
• Being able to travel to S. America more quickly and cheaply than from the U.S.
• A daily life that seems much less regulated and “dramatic” than in the States
• The opportunity to more cheaply and conveniently explore S. America

 

Conclusion

Yes, Costa Rica is more expensive compared to its neighbors and compared to most countries in South America. The infrastructure leaves something to be desired, especially if you prefer rural life. Bad roads are our biggest headache. Despite that, for many people Costa Rica offers an excellent retirement destination where we can relax, stretch our interests and improve our health.

It is not for everyone surely, and there is plenty to complain about if you are so inclined, but for now at least, it is the place we happily call home.