What’s the most expensive country in Central America? The cheapest? We take a country-by-country dive into the cost of living in Central America for expats.
Money. Ah, money money money. It’s what makes the world go round, right? Or what makes the world stop like a broken clock when you run out of it, or don’t have enough. We’ve all been there.
Money could well be the biggest reason why people decide to up and move from their lives in the developed world to a sunny existence in tropical Central America. The thinking goes that if you have any sort of “western” (“western” meaning U.S., Canadian, Western European, etc.) income, it’ll go much further down here. And for the most part, in a region where monthly salaries average out at well below $1,000, that thinking is correct.
You might say you’re coming down for the quality of life and the sunshine and the surf and all that stuff, and you probably mean it. But, no matter what kind of free-spirit you might think you are, your quality of life is as dependent on money down here in Central America as it is up there.
The only question is, how much?
It’s very true you can live on less money in this part of the world than up north, but how much less? What’s the amount I need for a comfortable life in the tropics? These questions are subjective, of course. Which is why they always cause arguments on the expat facebook groups. Everyone’s definition of “comfortable” is different.
For every person who claims they’re happy to live in a shack on the beach without electricity, and eat rice and beans every day (a lifestyle that gets old fast, by the way), there’s someone else who needs “first world” Miami-style condo living surrounded by top-end amenities, security, and power showers gushing endless, scalding hot water.
Both lifestyles are available in Central America, and everything between. We’ll assume, for the sake of this article, you’re “between”, somewhere in the middle. And we’ll assume you want to know which country in Central America offers the most bang for your buck as someone in the middle. This article aims to help you with that.
Factors that determine the cost of living in Central America
Below, we’ve taken a tour around the expat Facebook groups for Central American country to see what boots-on-the-ground gringos say about the cost of living where they live. We figured it would be interesting to collate together what people are saying, people with different backgrounds and standards of living.
Each quote is anonymous and less than a year old. Most of the time, they come from the comments when someone’s asked about cost of living.
It’s important to state these quotes are only relayed here to give you a rough idea of what expats are saying about their living expenses. The Facebookers quoted below all have budgets above, below, or the same as yours. It’s all subjective. With that said, you’ll see they’re talking – for the most part – about the following factors that contribute to the cost of living:
- Accommodation
- Food
- Transportation
- Utilities
- Healthcare
- Education
- Entertainment
With the quotes, we’ve also offered a little snippet based on what the Numbeo database says. On their own, neither the Numbeo data nor the personal anecdotes from a bunch of strangers on Facebook means much. But together, we hope they give you some idea of what you can live on when you move to, or retire to, any country in Central America.
Cost of living in Central America by country
1. Costa Rica
Costa Rica has a cost of living index of 48.8 (out of 100), according to Numbeo, making it a touch more expensive than Belize and Panama. It’s the most expensive for Central America.
The country has good infrastructure, a stable economy, and a high standard of living, which contributes to its higher cost of living.
Cost of living in Costa Rica varies greatly, depending on location. The capital city of San José and many beach/tourist communities are much more expensive than rural areas and provincial towns.
What they’re saying on Facebook about cost of living in Costa Rica:
“I spend about $20 a week on all my fruit, veggies, eggs, and cheese at the feria in Rohrmoser in San Jose. Also spend $13 a month on MediSmart (a discount medical program), which makes doctor visits $12 a pop. My rent of $660 a month includes all bills including cable, internet, electricity, and water. I also budget $150 a month for border runs.””Our budget is $1k to $1,200 a month for a family of five. Our rent is $600. The rest is groceries, gas, soda outings, etc. It’s doable, but expensive the first few months because household goods are outrageously priced here and it takes a while to figure out the cheaper places to shop. So budget more for like six months to be safe, but by then you’ll settle and have the go-to places. Keep asking both locals and expats where they shop for certain things. Stay away from tourist/expat centers.”
“It’s fairly hard to live on $2,000 per month if you have a rent, unless you really like rice and beans”
“We are two people in Pérez Zeledon who dine out about four times a month and only one of us drinks alcohol. We like a few imported things like blue cheese and dried cranberries. We always have high-end ice cream in the freezer. Our groceries, alcohol, and toiletries average Canadian $700 per month based on two-years’ experience.”
“I lived in Perez Zeladon for two years 10 years ago, and just moved back. This is my current spending: Two-bedroom, fully-furnished and equipped upstairs townhouse. All utilities included with weekly maid service. New and very nice… gringo quality. Unobstructed river, valley, and mountain views. No bars on the windows or razor wire perimeter. Same with the neighbors. $600 per month. Food.. I love to cook and I use the best ingredients I can find. It’s Costa Rica, so.. $150 per week. US ribeye is around $10. So I can have steak dinner once a week, no sweat. Still have plenty to share. Local meat shop has incredible chicken quarters for $3 a kilo. Fried chicken place has 2 pieces, fries, and a Fanta for $3. Food… $600 a month and I spoil myself. Extras… $100 a week for the occasional Uber and miscellaneous…. $400 per month. Vacations… I will put aside the same thing as miscellaneous per month. Travel tip… let’s say Manuel Antonio. Take a bus there midweek for a few bucks. Find a decent place with a view. Ask at the counter how much per night. Pull out cash and ask how much for two nights. That $60 or $70 a night place will drop to $40. So, transportation and lodging will be around $100 for three days/two nights. Plenty of coin left over for great meals and adventures. $400 per month recreation. I’m a veteran, so VA Healthcare. Foreign Medical Program reimbursement for service related problems. Will fly to Miami if necessary for serious medical issues. So, I’m at around $2,000 per month and living much better than anywhere I have lived in the States. I could easily shave some off this, but no need.”
“We’re a family of six on only $3,500 private school for four kids included. Not bad”
“We live outside Atenas, on a big property and pay about $500 a month rent for an old Tico house. We pay just over $100 for electric, cable, water, etc. Our food budget is about the same. We are quite comfortable.”
The cost of living in general is higher in CR compared to anywhere else in Central America.
Rent, food, transport seem to be on par with Australian prices, even more in some cases due to high import costs. pic.twitter.com/j0dacvV21P
— Shannen 🍉 (@ShannenJPEG) March 18, 2023
2. Panama
With the second-highest cost of living in Central America, Panama has an index of 48.2. Again, cost of living varies depending on location, with Panama City being more expensive than other cities or rural areas.
Panama has a high standard of living, good infrastructure, and a stable economy, which can contribute to its higher cost of living.
What they’re saying on Facebook about cost of living in Panama:
“We live in David and our budget for basics is about $1,200/mo. Rents in our middle-class neighborhood are around $400-$500. We pay as we go for health care. You can probably get a nice dinner for around $10-15 depending on where. We run the AC in the daytime and electric is around $80/mo. Food (2 ppl) maybe $400/mo, buying mostly local. If you want to keep costs down stay away from Panama City and places full of expats. Make friends with the locals and shop where they shop.”
“I don’t use AC, because I live in an area where I don’t need it. But that is hundreds of dollars per month if you do need it. I bought my property so no rental expense. These are my monthly costs:
- Electricity- budget $100 (it’s been under $50, but there’s some kind of subsidy that just expired… I expect it to almost double)
- Cable/internet/phone – budget $100 for Panama, $80 for US-related stuff
- Water – $12
- Garbage collection – $5
- Car insurance – $200 per year
- Car registration/renewal – $50-ish per year
- Gasoline – $50 a month (we don’t drive much… most of that is for the weed whacker)
Food is the most varied expense. I’d say $200 a week for 2 people is probably ballpark for us… but we like cheese and some other “more expensive” foods, and indulge ourselves. We could eat less expensively by cutting back on lean meats (the fattier one are cheaper) and dairy products… but we’re not going to. As for rent… that varies WIDELY from place to place, furnished vs unfurnished, etc… Also worth noting… my utilities have the pensionado discount applied to them. So if you don’t have a pensionado visa, your utilities will be about 25% higher.”
“Rent is completely based on where you live. In the Via Argentina area or Via España area of Panama City, rent for a one-bedroom apartment will range from $400 to $1,000 a month. Water will be less than $30 a month. Internet, depending on what kind of speed you want, will be between $40 and $60 a month. Electricity will depend pretty much entirely on how much air conditioning you run. I rarely run air conditioning unless my daughter really wants it. My electric bill ranges from $30 to $60 a month. I know some people that run their AC almost all day and all night. Their bill is closer to $120 to $200 a month.”
“Living alone on $1,200 a month and all expenses including rent, would be very difficult in any part of Panama City. Two incomes or shared living spaces and expenses might get closer to comfortable”
“You could live with $1,200 but housing would be your biggest cost. You could live with someone as a roommate. But your housing costs for rent would have to be less than $400 a month.”
“$400-$500 rent private room in a good place or $650-1,000 apartment with one or two bedrooms + $60-$100 power + $45 internet + $25 cell phone plan + $50-$80 Uber + $200-$300 food. Per person / per month.”
“The lower cost of living is long gone, there are always ways to keep costs low and it is a bit relative. If you pay $4,000/month for lodging in a major city, yes it will be cheaper, but not if you live somewhere with a lower cost of living.”
“Panama is no longer a place to save money. Not compared to UK cost of living, at least. I would say going out in bars and restaurants in Panama City is now more expensive than the UK.”
“Still living here quite comfortably on less than $1,500 a month. Plus the medical care is very affordable. There’s more to it than just property values and grocery prices.”
“It has gotten a lot more expensive here and it’s no longer some tropical paradise where you can live well for $1k a month… maybe in Bocas or underdeveloped areas. You need at least $3k a month in the city, preferably $5k+ if you like to enjoy the higher-end things Panama City has to offer and go out a lot. If you want the most modern amenities and things to do close to the airport, etc, I think Panama City is honestly the best place to live, but its gotten expensive if you want to live in nice areas.”
Pros: Location, weather, stable economy and government, friendly people, Spanish is easy to understand.
Cons: Relatively expensive, I don’t love Panama City and there’s no other significant urban areas, feel I might limit my kids’ opportunities in such a small country.
— Ian Bezek (@irbezek) March 30, 2023
3. Belize
Belize is one of the other more expensive countries in Central America, with a cost of living index in 2023 of 48.0. That gives Belize the third highest cost of living in Central America, after Costa Rica and Panama.
Housing, transportation, and imported goods tend to be more expensive in Belize compared to other Central American countries.
Belize offers a high standard of living for those looking for a more laid-back, Caribbean lifestyle. Talking of Caribbean lifestyle, Belize often compares itself more with the islands than the rest of Central America. And if you’re looking for that lifestyle, Belize – despite being expensive in Central America – is cheaper than places like Barbados and St. Lucia. Food for thought for anyone seeking those Caribe vibes.
Beach communities like Placencia and the islands of Caye Caulker and Ambergris Caye are where expats tend to live. These locations are more expensive than mainland rural areas or Belize City.
What they’re saying on Facebook about cost of living in Belize:
“Only you can say what you can live on a month. To say a local survives on a US$1,000 a month is one thing. Accommodations are expensive during high season, different grocery stores are different prices (and cheapest are not always in the locations you think). Vegetable stalls are well-priced, get used to buying little and often as veggies are not preserved here as they are in western societies.”
“The main expat areas are Placencia, San Pedro, and Caye Caulker. All three areas are more expensive than the rest of the country. You will be hard pressed to get by on US$1,000 a month. It can be done, but if you like eating out and socializing at bars and restaurants, you will be struggling financially. Very basic local rooms can be rented for BZ$100 a week, but if you want a fairly nice apartment or studio, you’ll be paying BZ$800 to BZ$1000 a month, minimum. Nice modern apartments go for US$1,200 to US$1,800 a month. I always worry about people hearing how cheap it is to live here and then getting here and being surprised at the cost.”
“US1,000 USD is doable, local people raise families on much less than that. In Belize we have NO Walmart’s, Costco’s or chains, Starbucks, Macdonald’s – nada! I pay:
- $70.00 BZD a month for fiber op internet – 60Mbps
- $60.00 BZD a month for cell phone plan
- $60.00 BZD a month cable TV
“Dining out, drinking a lot, and doing touristy things add up fast. Baseline you can rent for US$500 and lower, can eat cheaply, etc. My wife and I are over US$2,000 a month (imported liquor, eat well, gas in the boat, travel back and forth to construction site, US$800/mo rent on the water, etc.) but I’m sure people are happy on half that.”
“It’s easier to use USD to compare. 1 USD = 2 BZD (for now). The same as anything else, it really depends on your standard of living. You say you’re not looking for beachfront but that doesn’t narrow it down much. Do you need hot shower? Do you need electricity or are you good winging it? Do you want AC? That kind of thing. All these things really matter. Rich people need $4k a month USD. Many of us live comfortably on $1200 USD a month. Some even less.”
“It’s reasonable, and many retired people from Canada and USA move here for that reason. 2 BZD = 1 USD. The Cayes (San Pedro) are a little more expensive, but you can get by with no vehicle (which are golf carts here), by walking and biking. Minimum wage here is $3.30 BZD an hour, but most shop workers make $5.00 BZD an hour. So living local is inexpensive. Rice and beans and stewed chicken, and tacos are the norm for many people. Almost all meals at Bakkatown Food Court are under $10.00 BZD. A beer is $2.00 BZD at the distributor, and $5.00 BZD at a restaurant.”
Moving to Belize is more than simply getting close to the beautiful weather, the friendly people, and the relaxed pace. Here, @luigiwewege from @CayeIntBank talks about the cost of living in Belize.https://t.co/nAcEMhSqFk
— Central America Living (@VidaAmerica) March 3, 2022
4. El Salvador
El Salvador has a cost of living index of 43.3, placing it in the middle of the pack in Central America. Much less expensive than Costa Rica, Panama, and Belize, but more than Guatemala, Honduras, and Guatemala.
Housing, transportation, and food tend to be affordable in El Salvador, although imported goods can be more expensive.
What they’re saying on Facebook about cost of living in El Salvador:
“Was just there for a month as a Canadian using USD. Not cheap. Beer is cheap. People are very friendly. El Salvador is a work in progress and might be a good time to buy real estate. Lots of Chinese investment taking place.”
“Monthly budget is around $1,500, but I own a house paid in full, so there’s NO rent and NO mortgage. Now is the time to buy something. An acre of land is $18,000 and I know a wonderful (inexpensive) contractor who could build a sweet house for a nominal cost. I’ve made numerous contacts with the local business people.”
“El Salvador can be expensive, depending on your lifestyle, but you quickly learn where to buy. I buy veggies and fruits once a week from the truck (way less money than Súper Selectos). If you’re on a stringent budget and you want to enjoy típico comida, there are numerous comedores at low prices. The value is that I’m healthier than I’ve ever been… maybe due to eating a lot of veggies and fruit??!! AND the weather is awesome! AND I live 15 minutes from the ocean where I like to spend one day a week.”
“I own a beach house, and it’s $600 a month for caretakers, water, electric, cable, maintenance, and wifi. I spend about $50 a week for food and $20 for private transport to town when needed.”
“$5,300 per month with wife and three sons. Money is expensive, labor is cheap.”
“I don’t live there yet, but I plan to in the future for at least most of the year. I was there last year for a whole month. The tiny home I have there is paid off, but food and taxis cost me about $800 for my son and I since I had no car. That’s based off shopping mostly at the supermarket, because I’m used to American food, and excludes any extracurricular activities like day trips. El Salvador can be expensive but can also be affordable. It depends on your lifestyle. You can find very affordable places to live and can easily live off less than 1K a month. If you like to go out often, shop, eat out, travel, then that number creeps up. I really think of a lot of things cost about 50% off US prices. Eating out by the ocean certainly costs more, but you wont drop hundreds like you would in Malibu.”
“Housing in a “safe” area: $1,100-$2,500 (Escalon, San Benito, Maquilishuat, Santa Elena). Internet, cable TV and phone line: $65. Electricity bill for a family of three: $100. Education at a regular private school: $100 – $175 (international private: $500-$700). Groceries for a family of three: $700.”
“San Salvador housing is crazy! San Miguel is very affordable, a two bedrooms house is around $200-$300, you might get a room with that in San Salvador. A good private school in San Miguel and San Salvador is CCSA, it ranges from $75-$100 depends on the grade. You could get fancier, but it depends on what you’re looking for.”
How expensive is it to live in El Salvador in 2023? El Salvador has seen an increase in the cost of living in 2023, especially in food and transportation; this increase has affected the entire region and not only El Salvador. https://t.co/jlIu4RBBA8 via @GaldyINFO
— El Salvador News & INFO (@El_SalvadorINFO) February 10, 2023
5. Guatemala
Guatemala has a cost of living index of 40.2, making it relatively cheap, compared to other Central American countries. The cost of living can vary depending on location, with Guatemala City being more expensive than other cities or rural areas, especially the higher-end zonas, where foreigners tend to live.
Food, housing, and transportation tend to be affordable in Guatemala, but safety and security can be a concern in some parts of the country.
What they’re saying on Facebook about cost of living in Guatemala:
“Just as the cost of living varies greatly within the USA, the same is true within Guatemala City, especially when it comes to housing. But almost everything is cheaper in Guatemala (including produce, housing, utilities, education, etc), except for these items: electronics (everything from computers to appliances), gasoline, new or certified used cars, milk products and many meats, highly specific consumer goods, and speciality items. I’m sure there are other items, but this is off the top of my head from everyday experiences I’ve had.”
“Depends on your expected lifestyle and family size. Single dude with $2,000 dollars a month you are comfortable and can probably splurge on entertainment or alternatively invest. You can make it with $1,000 per month in the capital. With some basic luxuries like meat a couple of times a week and a couple of entertainment services, your rent will be between Q2000 – Q4000 a month in a mid-level zone like 11 or 7. Could be cheaper if you rent a room or you go to a more dangerous zone. The rest for groceries and utilities leaving you with around Q500 for fun. If you need transportation that may complicate things a bit.”
“My husband and I live in Xela (less expensive than Guatemala City or Antigua). We live in a gated condo community, probably considered upper-middle class. I shop primarily at the supermarket and we eat out a couple times a week. We don’t have health insurance, only emergency ambulance insurance, and we pay for doctor appointments as we go, and in cash. We live on a monthly income of about $1,500 per month, sometimes more, sometimes less, but that would be the average.”
“My wife and I moved back to Guatemala close to a year ago and we built a house in a small town 10 minutes away from Antigua. We don’t have to pay rent, so our monthly budget is less than $1,000 per month. I consider our biggest expense is the gas for the car. We do a mix of shopping at supermarket and local Antigua market for our food, and we eat out twice a week at small, family owned restaurants. We don’t pay for insurance, we pay medical services out of pocket; it’s more convenient and less expensive than having health insurance.”
“I live in Ciudad Vieja, six kilometers south of Antigua and about two hours from the capital. My rent is less than $300 per month for a new three-bedroom house with a small terrace and gated front area where I could park two small cars. My biggest expense is rent. I shop at the local markets and for bargains at the supermarkets. If I eat out, it’s at the comedores. I pay cash for my dental and medical needs.”
“Budgets vary wildly depending on many factors. I can tell you I live what I think is an amazing life on $1,500… you can do it for less or for far more.”
“I was able to rent a fairly new apartment in the city for $647 a month with hot water, lots of amenities, and free wifi. I was told $2,000 a month is plenty.”
With a substantially cheaper cost of living, for those with substantial retirement savings, or who earn in dollars, life in Guatemala can be luxurious. What does it take settle down in Guatemala? https://t.co/YvIWWLcSbW pic.twitter.com/eO8c1JuRln
— Mikkel Thorup | Author & Podcast Host (@ThorupMikkel) July 7, 2022
6. Honduras
Honduras has a cost of living index of 38.8, making it one of the cheapest countries in Central America. Housing, food, and transportation tend to be affordable in Honduras, although safety and security can be a concern in some parts of the country, especially mainland cities like Tegucigalpa and San Pedro Sula.
Most expats in Honduras live in the Bay Islands, which are more expensive than the mainland. That said, compared to other Caribbean islands, they’re very affordable.
Unfortunately, despite our best efforts, we couldn’t find recent quotes from expats in the Facebook groups within the past year about the cost of living in Honduras. That’s kind of Honduras all over, we’ve noticed. Expats there tend to keep things on the DL.
I’ve lived between Guatemala and Honduras for the past 5 years. Cost of living here is much less in general. In the private health care system, a friend had 2 operations, stayed in a private clinic for 2 weeks, all medication total cost, $5000 US.
— Jim Newell (@JimNewell12) January 28, 2023
7. Nicaragua
Nicaragua has a cost of living index of 36.8, making it the cheapest country in Central America. Housing, food, and transportation are affordable in Nicaragua, with the expat hub of San Juan del Sur being the most expensive place to live (still cheap compared to many other beach towns, though).
What they’re saying on Facebook about cost of living in Nicaragua:
“I lived like a king in Matagalpa and Esteli for about $700 a month. San Juan del Sur is gonna cost you $800 or $900 depending on how comfortable you wanna be.”
“If you’re planning on middle class, it will be not much less than a frugal lifestyle in the States, as any “first world” amenities cost more in Nicaragua than the US. Air conditioning, cars, electronics that function, gas for the car, etc. At least that was our experience. Included in that is a 15 year old jeep that we bought (cars are more expensive) and also included the cost to send our four kids to a private Spanish school (at $150 a month per kid- nothing like the international schools in Managua that cost thousands…). We did live extremely frugally in the States before we left, so maybe that makes a difference. And we lived in Granada before the political uprisings, so things may have been more expensive in that touristy town. We paid $800 a month on rent. In Diriamba, we had a nicer house for $500 a month. No pool, and no air conditioning in either place, no hot water in Granada. And regarding the cost, stay away from expats, as gringos live in exuberant expensive places. Nicaragua is really cheap if you live like a middle class local, two people can live with $2,000 a month like kings.”
If you speak Spanish of course.
You’d be better off in a bigger city though of course. You just need 1 good connection to open a world of connections.Nicaragua is very cheap. In your 20’s you can keep your cost of living super low and focus hard on an online biz.
— CH_Nica (@ch_keane) February 26, 2023
So, to recap, according to Numbeo, cost of living in Central America, from most expensive to cheapest, ranks like this:
- Costa Rica
- Panama
- Belize
- El Salvador
- Guatemala
- Honduras
- Nicaragua
It’s important to note that Numbeo relies on user-generated data, and so one shouldn’t rely on it for total accuracy.
Some users may not provide accurate or up-to-date information, which can lead to misleading results. Also, the data may be biased towards certain groups or perspectives. For example, if a particular group of people is more likely to contribute to the website, the data may not accurately represent the overall population of a country.
That said, we live in, and have traveled a lot through Central America, and can affirm these rankings are broadly correct.
Costa Rica, Panama, and Belize are without doubt the most expensive countries in Central America, Honduras and Nicaragua are the cheapest, with El Salvador and Guatemala in the middle (while still being cheap).
So these Numbeo cost of living indexes are useful, but users should be aware of the limitations of the data and consider other sources of information to get a complete picture of what life is like in a country. Which is why we pulled out a ton of quotes from the Facebook groups. To offer a “horse’s mouth” point of view.
But even with these quotes, please note they come from individuals living different lifestyles, in various locations, with a wide range of personal preferences and comfort zones.
From the comments above, it seems clear that roughly at least $1,000 a month is necessary to live in the cheaper Central American countries and $2,000-$3,000 in the more expensive ones. That’s if you want to live a comfortable life, although we hope we’ve hammered home the subjectivity and individuality of it all by now.
Overall, the cost of living in Central America can be relatively cheap compared to other regions, but the cost can vary depending on location, lifestyle, and personal preferences.
It’s important to do your research and consider your individual needs before deciding to live in any of these countries as an expat.
James Dyde is the editor of centralamerica.com. He lives in Escazu, Costa Rica.
