Life in Mexico: Tips for Living on a Budget

Source: Q-Roo Paul

I began the year with a post detailing our monthly household expenditures here in Mexico.

After that post, I received dozens of emails requesting a breakdown of additional common budget categories such as entertainment, eating out, gasoline and groceries.

Although I did mention those areas in the post, I didn’t assign them a set value.The reason that I didn’t is because those budget categories are flexible. We can easily alter our behavior a bit where needed in order to stay on budget.

When we moved to Mexico, we had to learn to live on a lot less income (about 67% less). That meant developing healthy spending habits and carefully tracking our expenses.

If you’re new to the world of budgeting — or if you’re just curious how we do it — here are a few tips to get you started:

Determine Your Disposable Income

The first thing you have to do is determine your fixed and variable household expenditures such as rent, utilities, car payments, insurance payments etc. Once you determine how much you absolutely have to spend each month, you’ll be able to determine how much discretionary money you have left over for food and entertainment.

For the purpose of this article, I’m going to use a monthly budget of $2,500 USD for two people living near the coast in the Riviera Maya (like us).

I’m also going to use the monthly household expenditures ($600 USD) from our previous article. That amount includes the following: water/sewer; health insurance; car insurance; internet; cable; electricity; and homeowner’s fees.

That means that we would have $1,900 USD for the month to use for everything else that we spend money on: food, gasoline, groceries, travel, entertainment, church, shopping, margaritas, medications, tips, parking, etc.

Track Your Spending

We use a phone application called Spending Tracker to track every single peso that we spend. We convert our discretionary amount into pesos and enter that into the app at the beginning of the month. We then make entries every time we spend money.

The application is available for Android and Apple’s iOS

Determine Your Daily Budget

This one is very simple: at the beginning of the day, just divide the amount you have left by the remaining days in the month. If you spend less than the budget allows, then your daily budget will be higher the next day.

For us, it’s like a game to keep the spending low in order to watch the daily allowance increase. We know that if we do well, we can use the surplus for a staycatation.

I created a chart to illustrate how this type of budgeting works over the course of the month. Normally the chart would be in pesos, but I felt it would be clearer for demonstration purposes to leave it in dollars.

The Daily Budget category is the maximum that I can spend that day to stay on budget.

Graphic created to illustrate how the daily budget increases or decreases depending on spending. The application does not do this automatically.

The spending used in the example is representative of our average daily spending. The amounts can fluctuate quite a bit depending on our activities that day.

For example: if we put gas in the car and then go out to eat prime rib at one of our favorite restaurants, the daily total is going to be higher than normal:

If we spend a lot of money one day, we try to compensate by being thrifty the next.

At the end of the month, you can choose to carry the surplus over to the next month or save it for a rainy day. If you spend too much, the only choice is to carry over your deficit. Hopefully, that doesn’t happen too often.

Let’s Wrap This Up

Although we’re very budget conscious, that doesn’t mean that we just sit at home counting pesos. We travel regularly, eat out almost everyday and enjoy a fun-filled Caribbean lifestyle.

Granted, we don’t have as many possessions as we once did — but the truth is, we don’t miss any of them. It’s more fun to spend money on experiences instead of things.

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About the Author

Qroo Paul
Paul Kurtzweil (Q-Roo Paul) was a deputy sheriff in Florida for 25 years before retiring at the rank of lieutenant in 2015. He and his wife moved to Mexico looking to maximize their retirement income. They later started a blog called Two Expats Mexico ( to share their experiences as well as information about the logistical and legal aspects of retiring south of the border.

10 Comments on "Life in Mexico: Tips for Living on a Budget"

  1. Great tracker! I’ve just downloaded it. I don’t seem to have the daily amount page that you show – or I’m blind. Do you have the upgrade? Mine is showing as a total. Many thanks for your handy hints!

    • The graphic in the article was only created to show how the daily average goes up etc. The app doesn’t do that. You just have to divide the total each morning by the number of days left.

  2. Very good article. I will keep this tracker in mind.

  3. Wayne (Curious Cold Weather Survivor) | January 24, 2017 at 7:50 pm |

    Your articles are fantastic and have me dreaming of a lifestyle in Mexico. As a recent reader, you may have addressed this but if I do not speak or read any other language other than English, is it easy or moderately easy to get by on day to day activities (gas, groceries, restaurants etc). Thanks for the great blog. Wayne

    • Thanks, Wayne. If you live in an area with a large English-speaking expat population (Cancun down to Tulum), you can get along well with just English.

  4. We don’t use a tracker but just look at the balance month to month and you can see the savings. I would say about 1/3 cheaper here then home from Canada but we live much better here :). We went home for one week to visit new grand child $117 for a a bit of food and $171 for booze down her the bill is about 1/3 for same thing. We eat out more here so the savings is about 1/3 from home.

  5. Thank you for sharing your budgeting method. The daily budget balance is kind of interesting. I usually set up my budget for the month and track each expense item. Before we moved to Mexico, we planned our budget $3,000 a month. After a few months of living in Mexico, we learned a very reasonable life here. The current exchange rate also helps us in our favor as well. We can definitely enjoy our life with $2,000 to $2,500 a month including school, sporting events, gym, etc

  6. Susan Allard Snider McKee | January 27, 2017 at 6:57 pm |

    Do you know of anyone who does these bu jets in Canadian dollars. These amounts in US funds seems high. I am not looking to stay in gated comunities or a high end rental. Just something reasonable and affordable. Also I am or will be travelling solo

    • You can set it up however you want. These are just examples but our actual budget is all in pesos. We eat out every day, travel frequently etc — so, that can add up. Our expenses to live in a gated community are not high. This is the disposable income.

  7. Our expenses in Baja Sur appear to be similar except we rarely eat out so my food budget is much less and our waistlines are grateful too. I’ve been stumbling around your site and I like it.

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