I wrote recently about the value in expats getting accurate information so that they can mold their expectations appropriately about what living in Costa Rica might be like. I truly think there’s another type of “expectation” that is quite interesting to observe.
Many, if not most, gringos come to Costa Rica looking for a lower cost of living (among other things, of course, like milder temperatures and new adventures). Certainly for retirees, the idea of living on their social security or other pensions more comfortably than in the U.S. (or Canada) is a frequently heard sales pitch.
And it’s not an inaccurate one. Most gringos can and do live on less money here than they did in the U.S. So it’s a natural extrapolation to think that the “cost of living” is measurably less here than in the States.
And that’s where you would likely be wrong unless you really understand the differences in how most “middle class” folks “expect” that they’ll live in the North America and what they’ll “accept” living here.
Now, before I go any further, let’s just get it right out there that I’m going to be talking in broad generalizations and, of course, there will be exceptions to those generalizations. So if you feel that any of what I describe here doesn’t accurately reflect you, great. No need to get huffy about it. It does accurately describe, at least in a broad sense, a huge percentage of gringos who move here.
So, how did we expect to live in the States?
For most of us, home ownership fit into it and even if those homes weren’t fancy, they were probably fairly large. Certainly 2,000 to 3,500 square feet would be pretty typical and many had homes even larger than that. They move to Costa Rica and downsize.
While our home here is larger than many — and we certainly have friends with houses larger than ours! — most folks seem more likely to end up in maybe 1,200 to 1,700 sf. (Literally half the size they were likely to have had “back home.”) And many adults in their 50s and 60s who haven’t paid rent since they were 25 or 30 years old and bought their first home are finding that they’re very willing to be renters here rather than owners.
Our friends Paul and Gloria Yeatman come to mind as a great example of how far you can be willing to take that — with happy results! — since they left their 2,500 sf home back in Maryland and have been living more simply for the past two years in a 500 sf “cabina” just up the road from us. They’re working hard to stay on a budget and write (and video) about their experiences at http://retireforlessincostarica.com/ . While their choice doesn’t necessarily apply across the board — it’s a more extreme “downsizing” than many are willing to do — it’s actually a great example of the kinds of choices that can be made, if it’s important enough to you.
How about cars? Not even counting folks who drove brand new luxury cars every year (let’s face it, most of them aren’t moving to Costa Rica) it is true that most of us in the U.S. had a car for each adult in the family, sometimes more than one. Those cars were more likely than not to be only a few years old and probably no more than 8 or 10 years old at the very most.
And what changes when folks come here? Almost none have more than one car per household, and most of those were built well before the turn of the 21st century. Ranging from the ubiquitous Land Cruiser of the 1980s (and even 70s) to the 1990s Gallopers, Troopers, Pathfinders, and 4 Runners that are equally common, I’ll bet you could poll most all of those gringo owners and find that they’d had twice as many cars in the States that were probably at least twice as new. Here a few even choose to do without a car at all and get around by bus and taxi.
In the States, while we may complain bitterly about the high cost of insurance, it doesn’t occur to most of us to go without. Home owners, medical, comprehensive car insurance (on multiple cars), maybe even disability and dental…. It’s not uncommon in the States to find families paying several hundred to as much as a couple thousand dollars a month total in insurance premiums. Here they may find they have none at all.
Is it because they’ve found all those coverages are magically provided somehow for free? No, of course not. They just learn to do without. It’s common here to be essentially completely uninsured and because you’ve changed countries, the previously unimaginable becomes routine and accepted. Expected, even.
What’s interesting to ponder, of course, is why we so readily and voluntarily accept this complete change of “life circumstances” here where we wouldn’t have in the States. After all, couldn’t we make those same choices in the States and live more cheaply there?
Indeed you could, although some more successfully than others. We could definitely choose, for instance, to drive an older car and get by with liability only insurance, self-insuring for the rest the way we effectively do here. (And, in fact, when we get to Salt Lake City we plan to do just that.)
On the other hand, if you’re not yet of Medicare age and you’re going to be without medical insurance, planning to pay out-of-pocket here for your medical costs makes that a far less financially-risky proposition. On still another hand (uh oh, I think we’re out of hands), if you are of Medicare age, the amount of money that could suddenly pour out of your pocket for private-pay medical care here, which you’re likely to need at some point, could drastically affect your “cost of living” in one quick motion vs. having nearly free care in the States. (You paid your Medicare premiums all those years, now’s the time you might choose to make use of the care.)
Is there any reason we have to have a larger home in the states than we’re willing to live in here? (And if so, why?) We’ve said for years that part of why you can get by here with so much less “space” in your house is that you spend so much time outdoors, on porches and such And I do think there’s definitely some truth to that. But for most people it goes beyond that, so it’s a good time to be honest with oneself about what you need and why you need it.
After all, if you want to move to Costa Rica to lower your cost of living, you might well be able to do that. But you should be clear with yourself about why that might be possible, and make your decisions accordingly.
Just something to think about….