Every year on this long-running blog I do a post on the cheapest places to live in the world. There are seldom drastic changes in the cost of living from year to year, but political changes and exchange rate fluctuations can have a significant impact.
The U.S. dollar rules right now, so for the time being the world is on sale for Americans, not quite as cheap for Canadians and Europeans. Still, in any of these locations you should be able to live out the promise of my book: A Better Life for Half the Price. If you’re interested in getting monthly updates on this subject to put your dreams into action, sign up below and you’ll receive a report on where you can live on a tourist visa for four months or more.
The Absolute Cheapest Places to Live
As usual, the cheapest places on the planet to travel are also the countries with the lowest cost of living if you’re willing to put up with plenty of challenges.
Nepal is probably the hands-down winner in terms of what you get for your money. If you were set up with $1,200 a month coming in there—the equivalent of one Social Security check—you’d be part of the wealthy elite. You could live on half that and still be eating well. Getting residency is quite tough though, so most people just do short stints in the country unless they’ve got a work visa or they’ve set up some kind of charity. Oh, and the electricity and internet both go out on a daily basis.
Parts of India are a great bargain as well, though you wouldn’t know you’re in a bargain country if you get transferred to Mumbai or Bangalore for a job. There’s a lot of money and investment in those cities and plenty of millionaires milling about.
Instead look to the smaller cities and Himalayan mountain towns where it’s not unusual to find a house to rent for a couple hundred dollars and restaurant meals for what you spend on a soda in your home country. There are thousands of expatriates and travelers taking a pause that are easily getting by for $600 a month total here, or spending twice that and living the high life.
Indonesia is kind of a mixed bag as well, with prices in Bali up by a factor of five or six from when I first started writing about the place, mostly due to a massive influx of tourists and woo-woo expats following the Eat, Pray, Love spell. Once you get off that island though, prices drop substantially.
If you settle down in a place that’s not jammed with tourists, say on Sumatra or Sulawesi, this is another country where you can easily live a nice life on $1,000 a month or less. There’s just one big problem: it’s tough to get a visa to live here long-term unless you’re working for a company that’s giving you a work visa, if you have an Indonesian spouse, or you’re over 55 and have a decent income.
Cheapest Places to Live – Temporary Opportunities
A strong dollar and cheap oil are having a major impact on prices around the world. If you’re reading this post years later, assume we’ve returned closer to the mean. If you’re American and are waiting for the opportune time, 2016 is going to be your year. Just go!
The interest in Colombia as a place to live has been on an upward trajectory for years, but the fall in their currency against the dollar has turned a good value into a terrific bargain. Here’s what one of my readers wrote recently as a comment: “I live in La Paz, Bolivia and have just been to Bogota for 4 day break – first time back for about 11 or 12 years.
I was surprised at just how cheap it was , certainly cheaper than La Paz for the majority of things. Probably things like local produce are about the same, but for anything imported it was considerably cheaper, often up to 50% cheaper.” The city of choice for most is Medellin, with great weather year-round and a good food and nightlife scene. There are plenty of cheaper places to live around the country if you want something less hectic, but be advised that lovely Cartagena is no bargain.
It’s a favorite of tourists and domestic investors buying vacation homes, so while it’s gotten more reasonable, it’s an outlier.
I reported last year that it was a great time to land in Argentina with greenbacks in hand. “Combine a strong dollar with a local financial mess and you get a great climate for someone entering with foreign currency.” At that point the official exchange rate was 8.6 to the dollar and the real one on the street was 13. Now the official rate is 9.69 and the “blue rate” has passed 15.
Combine that with bargain-priced good wine, almost-free health care, and reasonable housing costs and it starts looking like expat heaven. The ability to stay almost indefinitely on a tourist visa is a big plus too. Just cross to Uruguay or Chile every three months and take a short vacation or return immediately.
The expatriates I interviewed here are living on far less than half of what they spent before, especially those who made a lateral move from New York City to Buenos Aires. Naturally if you get into smaller towns, prices drop dramatically.
I’ve spent three of the past five years living in Mexico and it is cheaper there now than when I first visited in 2002. The most common exchange rate over the years has been 13 to the dollar. Over the past couple years the peso has been dropping though and it’s now around 17 to the dollar. This makes our closest neighbor to the south a screaming bargain anytime you go to a restaurant, buy a beer, take a taxi, or hire a carpenter.
My family of three averaged $2,300 a month in expenses all in while in Guanajuato, paying all medical costs out of pocket, having a maid two times a week, having a handyman come almost weekly to do improvements/repairs, and traveling a lot within the country. We weren’t very frugal at that level either because we didn’t need to be.
We could eat out constantly, go to cultural events, and enjoy life to the fullest. It’s cheaper now than when I wrote this Guanajuato post. Our maid is one of the best-paid in town and she gets $4 an hour.
You can stay 180 days on a tourist visa in Mexico, then get another 180 just by leaving and coming back. If you can show a good enough income, the residency process is straightforward if you want to stick around or put your kids in school. You can usually find a round-trip flight priced just a tad above a domestic one and it’s easy to get by without a car.
If you want first-world amenities and infrastructure, tap water you can drink, and pleasant weather, it’s hard to
top Portugal. This is the cheapest country in Western Europe at any time, but the continuous fall in the euro, combined with a lingering debt crisis, means Portugal’s low costs have gotten even lower.
It’s hard to imagine that you could move from the U.S. or Canada to Europe and actually spend half of what you’re spending now on living expenses, but here it’s possible. Lisbon is more expensive than the rest of course, so the “half price” part only works there if
you’re moving from a big city, but it’s blissfully cheap once you get outside of the capital and even there it’s a bargain by European city standards.
It’s much easier to get residency as a EU citizen than from elsewhere, so there are more Brits living in Portugal than other nationalities. Still, with enough patience and some money to pay a lawyer, it’s possible for other nationalities to get long-term residency. See this post for more on the cost of living in Portugal.
Other Temporary Opportunities
The currency in Malaysia has dropped by a third against the U.S. dollar the past few years, making Southeast Asia’s easiest country an even better value. If you’re a retiree, getting residency here is straightforward if you’re willing to invest in property.
The expat favorite of Thailand keeps seeing an inflow of residents and tourists despite frequent political blow-ups and a baffling visa policy that causes tens of thousands of people to do border runs every two months. The currency ranges between 30 and 35 to the dollar and right now it’s around 35, making rent, street food, and transportation a better deal than before.
The government recently introduced a six-month multiple-entry visa, which will make things a little easier. You can still only stay 60 days at a time, but you know you’ll be able to get back in with no issues each time.
Long-term Cheapest Countries
While the above should stay unusually cheap for the coming year, eventually they will likely return to a more normal price range as currencies return to historic norms. The following have been tied more to the dollar, however, so prices have remained relatively stable. Even if you’re reading this in 2018, these should still be some of the cheapest places to live in the world.
They actually use the greenback as their currency in Ecuador, so inflation is very low and most price changes are due to government intervention rather than market forces. (The prime example is imported booze, which has a 100% tax).
Cuenca and Vilcabamba have been retiree havens for quite a while, especially for those who looked at their meager retirement savings and realized they were going to be in rough shape if they stayed in the U.S. or Canada. Most of them are paying between $300 and $600 a month for rent of a house or condo and nobody I’ve talked to living there is spending more than the equivalent of two social security checks for a couple. Health care costs about 1/10 of what it does in the United States, with good facilities in the cities.
This is one of those countries that’s a better deal for living than it is for travel. That’s because of terrific affordable health care, some of the best residency incentives in the world, and generally reasonable living expenses. On the health care side, it’s not unusual to pay $20 to see a doctor, $35 to see the dentist and get a cleaning, or a shade over $10,000 for surgery at a hospital affiliated with Johns Hopkins.
The capital city is dramatically more expensive than the rest of the country and it’s less pleasant too, so look to other locations to get the real bargains. There are plenty to pick from, ranging from volcanic highlands to tropical islands.Panama has the world’s bestpensionada program for retirees, but really you don’t have to be retired or even old.
You just need to show $1,000 a month in income to get a long list of incentives and discounts with your residency. They use the U.S. dollar here, the government is relatively stable, and there’s a solid banking system in place. A metro is now open in the capital and Copa Airlines is based here, so flight connections are good in multiple directions.
Other Cheap Countries to Consider
I just got back from Honduras and once you get out of the two nasty main cities, the crime rate drops to normal levels. The minimum wage is somewhere around $400 and if you meet someone making $800 a month they’re probably in a management position or are earning a good wage for being bilingual. Without a lot of expatriates driving prices up except on Roatan Island, you’d have to rent an oceanfront mansion to pay more than $1K per month on rent.
Bolivia is a bargain in many respects thanks to its status as one of the poorest countries in South America and some parts are quite beautiful.
Guatemala is kind of a strange one because living on Lake Atitlan would give you killer scenery for a song, but Antigua is getting more expensive every year, with housing prices on par with parts of the U.S. and Canada. There’s also a fair bit of crime, though much of what’s in the news takes place in the capital city, where few tourists ever go.
I’ve got to put the Philippines in here because otherwise I’ll get chided by them for leaving them out. It’s a bit of a one-sided expat population there though, comprised of older men looking for a younger companion. If that’s you or you have a business reason to set up shop there, you’ll find plenty of English speakers and reasonable prices.
Yes there are other places where you could live for half price. Heck just going from London to any small town in Wales or the USA will probably accomplish that. But in these locations it’s a sure thing.
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