Thoughts about the Cost of Living in Costa Rica

I just received an inquiry from someone who was thinking about moving here but changed his mind because of the high cost of living. A key factor is the fact that the dollar’s strength has fallen here.

First, the latter is not a permanent situation. Costa Rica has always artificially inflated and deflated its currency. I have been told by knowledgeable sources that the true value of the colón (local currency) is 800 to the dollar. Can you imagine that!

This economy is very strange in this small country. For instance, in 1982 the country paid the price for consuming more than it produced, importing more than it exported, and borrowing abroad to make up the difference. A resultant recession caused the colón’s value to devaluate from 8.5 to the dollar to around 45 to the dollar. Thousands of locals saw their life savings go up in smoke.

The country continues to manipulate its currency which could lead to a crisis like the one above according to several editorials that I have read written by prominent economists.

Almost 150,000 Costa Ricans have lost their jobs because of the most recent currency manipulation to an excess of dollars (sobreoferta) in the economy, so they say.

Of course, as a result, expats have lost some of their purchasing power (poder adquisitivo), especially those with fixed incomes.

Despite the above many of my clients insist that it is still less expensive to live here than in the United States.

So, what can you do to stretch their money until the dollar bounces back?

1. Do not eat out at expensive restaurants.
2. Take public transportation instead of driving to cut down on gasoline, car repairs, insurance, and other related costs. Use UBER or DIDI when taking a taxi. They are more affordable than the traditional “red” taxis.
3. Buy fruit and vegetables at weekend farmers’ markets and shop at low-cost supermarkets like Palí or those run by Chinese merchants. Look for sales in the newspaper.
4. Shop at discount stores like El Mundo Mágico or El Rey.
5. Look for inexpensive entertainment.
6. Purchase second-hand clothing from the U.S. at one of the Ropa Americana clothing stores.
7. Compare prices.
8. Stay away from tourist traps when going to the beach. It’s more affordable to go in the low season (May to November) than in the high season.
9. Budget your money.
10. Stay away from shopping in malls.
11. Look for stores where Costa Ricans shop. There are scores of them in most towns and cities like the ones found around the lower west end of San José’s Central Avenue (Avenida Central) which is a walking street.
12. Eat a healthy diet so you do not have to spend money on money and doctors. Costa Rica has a public health care system called, la caja. However, one has to be a resident to join. Everything is free for a small monthly quota. However, there can be long waiting times for some appointments and procedures.

I am sure I have overlooked other ways to cut down on expenses that I have overlooked.

Anyone who wants to keep track of the cost of living may see: https://www.numbeo.com/cost-of-living/country_result.jsp?country=Costa+Rica

Bottom line: Although the cost of living has risen temporarily for those of us with dollars, almost any amount of money is not too much to pay for the incredible lifestyle, great weather, wonderful experiences, and the country’s beautiful people.

The best way to experience the real cost of life here is to test drive Costa Rica on one of my monthly Combination Beach and Central Valley tours and seminars.