“Everything costs something.”
When we lived in Nicaragua, we occasionally referred to ourselves as economic refugees. We took early retirement and lived off our small teaching pensions. We did everything financial experts advised to prepare for living abroad such as, becoming debt free, having an emergency medical fund, purchasing international health insurance plans, saving money for unexpected emergencies like trips back to the states to help our families, and living within our budget.
Thank goodness we didn’t burn any bridges. We rented our house in the states and kept our stateside bank account and address, which was important in keeping our U.S. credit card. We were legal residents of Nicaragua and Tennessee and had the best of both worlds.
When the Nicaraguan crisis and Ron’s lumps in his neck made us reconsider moving back to the states, we were concerned about the cost of living after spending more than 10 years abroad with cheap, cheap living and all the comforts of home.
What we learned surprised us!
Most retired expats in Nicaragua will tell you that their main reason for moving abroad was affordability. They said they had a hard time living on a fixed income in their home countries.
But, what they don’t tell you is that everything costs something! It is cheap because there is no quality control, the education system does not prepare employees to be productive and skilled laborers, the infrastructure such as roads, utilities, and internet are pitifully unreliable (and many times unsafe), and most materials and foods imported come with a hefty price tag. In other words, you get what you pay for…and it isn’t much!
So, I made a comparison of the cost of living in Nicaragua and the USA for the month of February. I used eight general categories and color coded them the same in each pie graph.
The monthly cost of living in our home in TN is $1,626.20. The largest slice was miscellaneous, which included paying off our credit card in full each month. We rarely use cash here and pay for almost everything with our credit card. I missed that so much in Nicaragua, because I can always accumulate enough reward points to pay for several airline tickets.
Surprisingly, several items are cheaper in the states, like gasoline for transportation. It is $1.80 per gallon with my grocery store discount card. The package deal for fast internet ( I mean really, really fast…100 mbps) and cable TV is $101.24 a month. I paid much more in Nicaragua for the internet, not including the maintenance of a very tall microwave tower that was always breaking. And…AND…the speed, if we were lucky, was 8 mbps, when the system was working. The internet blinked on and off daily many, many times.
We have a heat pump and several small portable electric room heaters for the winter months. February is usually the most expensive electric bill according to our past usage. In the summer, we have whole house air conditioning and our electricity averages $75. Most of the time we don’t use the air conditioning. We prefer opening the windows and every room has ceiling fans and window fans.
We own our house in TN and are mortgage free. Rents are reasonable in our small town, averaging $871 per month for a 1 bedroom house or apartment. For a single person a monthly cost of living on average is $1,600.
In Nicaragua, our monthly expenditures were $1,341.00 Our cell phones were cheaper… we had two cell phones and only one with unlimited data from Claro. The data transmitted was only 3g and service was spotty depending on where we were in Nicaragua. In the states, I have 4g and unlimited data with free calls and text in the U.S., Canada, and Mexico with AT&T prepay.
Transportation was more expensive in Nicaragua for two reasons. Gasoline is very expensive and taxis are expensive. Usually, we took a monthly trip to Managua with our taxi driver, Francisco. The cost round trip was $60 and we tipped him $10 and bought him lunch.
Although we had an abundance of fruits on our property, we enjoyed some imported foods like peanut butter, dill pickles, chocolate, and wine, which increased our monthly food expenditures.
Nicaragua is a cash society. We seldom used a credit card. Our miscellaneous fees included propane for cooking, house repairs, and workers.
We still support our goddaughter and my children’s library and librarian, so that has not changed.
Overall, the difference in monthly costs is about $300. When the weather warms, our electric will go way down and make up much of the difference. We can reduce our monthly internet/cable TV service by cutting the cable cord. The only reason we have cable TV is so Ron could watch his sports throughout the long winter cancer treatments. We can stream everything we want to watch, so the cable will be cut soon.
Our annual expenses are comparable in some areas, and more expensive in others.
1. International health insurance in Nicaragua and Medicare with Medicare supplemental insurance in the U.S.
2. VPN service for our internet remains the same.
3. Amazon Prime yearly bill is the same, but living in the states we have used it so much more for free shipping and streaming movies.
1. Property taxes $650 yearly in the states vs $60 in Nicaragua.
2. Car insurance is much more in the states. We bought and paid cash for a car when we returned…and we have to have car insurance. In Nicaragua, we had our dune buggy and our motorcycle insured for $75 a year. However, there is no telling what the insurance would have covered if we had an accident in Nicaragua.
In making comparisons, the best decisions we made were to pay off our mortgage in the states and buy our house in Nicaragua. Our house is rented in Nicaragua now. The worst case scenario would be that our house in Nicaragua would be confiscated by the government. If that would happen, because of our wise financial decisions, we would not suffer, nor would our retirement funds be affected. We are not in any hurry to sell our place, nor do we feel pressure to sell. Although we will probably not return to live in Nicaragua, we have no regrets about financial decisions we have made throughout our lives.
It feels kind of weird to say we aren’t expats any longer. But, we are redefining the term expat. Possibly global citizens would be a better term. I’m in the process of writing a post about that. Stay tuned while we rewire.