Mexico has long been a popular destination for retirees and other expatriates looking for low-cost living in a comfortable climate. Although prices in some expatriate centers have increased quite a bit over the decades, Mexico continues to deliver on its promise of an inexpensive life in the lap of natural luxury. Whether you are looking to settle near a quiet beach on the Pacific coastline, in a town square in a highland colonial city or at the edge of the Yucatan jungle, it is absolutely possible to make a life in Mexico on less than $1,000 per month. Depending on where you end up, you may even have a little left over for extra entertainment or periodic travel.

Residency Rules

Mexico has several requirements you must meet to acquire the Permanent Resident Visa that's needed for long-term residency in the country. One of the most important factors to consider is proving your economic solvency - i.e. your ability to support yourself while living in Mexico. As of 2015, you must prove that you earn $2,000 or more each month, plus 25% more for each dependent family member. So while you may be able to live on $1,000 per month in Mexico, you will need to earn twice that amount each month to legally reside there. 

Destinations to Consider

Mexico is a large country with a diverse natural landscape. There are good, affordable destinations in nearly every region of the country. On the Pacific coast from north to south are the highlight cities of Mazatlán, Puerto Vallarta and Puerto Escondido. In the western highlands, the towns around Lake Chapala are quite popular, as is the city of San Miguel de Allende in the highlands north of Mexico City. South of Mexico City, Cuernavaca is a growing retirement mecca, while San Cristóbal de las Casas in Mexico's far southern state of Chiapas is another terrific mountain destination. In the Yucatan, Merida and the Riviera Maya area both rate highly as retirement destinations, though you may have to work a little harder to stay within your $1,000 budget.

Housing Costs in Mexico

Outside of high-traffic resort areas and high-end neighborhoods, rent is quite inexpensive throughout Mexico. According to the international price comparison website Numbeo.com, a nice one-bedroom apartment in a central city district in Mexico averages about $270 per month, while the same apartment in an outlying area goes for just $180. Three-bedroom apartments average about $570 per month in central locations and about $400 in the suburbs, which is very affordable if you plan to live with a roommate or a spouse to cut costs.

Some very popular destinations have somewhat higher average rents in the central districts. For example, apartments in Puerto Vallarta are about $100 more expensive in central locations than the national average. Apartments outside the center are right at the national average. Generally, outlying housing options are very cheap no matter where you go in Mexico.

Utility Costs in Mexico

Utilities in Mexico are inexpensive unless you need to use air conditioning throughout the year. According to Numbeo.com, electricity, water and garbage collection costs about $45 per month. Unlimited broadband Internet costs less than $25 and is widely available. Basic prepaid cellphone service averages about 10 cents per minute. Service plans are also an option and may deliver better value for money depending on your needs. You may be able to use your current phone in Mexico by changing your phone plan or buying a new SIM card.

Food Costs in Mexico

Food prices are very reasonable across Mexico, especially for locally produced fruits and vegetables, and staple foods such as bread, eggs, pasta, and meat. In many parts of Mexico, you can get high-quality tomatoes, onions, oranges, bananas and much more for under 50 cents per pound, and sometimes substantially less if you live in the right area. Boneless, skinless chicken breast averages about $2.15 per pound, while a dozen eggs cost $1.60.

Mexican grocery stores are stocked with all kinds of familiar and not-so-familiar food products to keep your pantry full and your menu exciting. While foreign food brands are often available, it is usually easier on the budget to stick with local-brand alternatives, which are generally high quality and tasty. Bottled water is cheap and available everywhere in Mexico. Prices for a 1.5-liter bottle average under 80 cents. In many areas, you can buy 5-gallon jugs to cut costs even further. The U.S. Centers for Disease Control and Prevention (CDC) recommends you avoid tap water in Mexico entirely.

Most expatriates who primarily cook at home can eat exceptionally well for $200 per month. While it is easy to go over budget in this area, many expatriates report it is also quite easy to go under budget if you spend carefully on shopping days. Dining out is reasonably inexpensive in Mexico. Cheap local restaurants and food stalls in outdoor markets are everywhere across the country. A meal in a busy local restaurant costs between $3 and $5 depending on the city. A three-course meal in a mid-range restaurant averages a little more than $20 for two people, with prices higher in tourist areas.

Health Care in Mexico

Health care in Mexico is very good, especially in larger cities and other areas that attract expatriates. Most Mexican medical professionals are just as qualified as their American counterparts. In fact, increasing numbers of American medical tourists are visiting Mexico specifically for inexpensive treatment. According to the expatriate publication International Living, medical care in Mexico is less than half the cost of equivalent care in the U.S. Health insurance in Mexico is also substantially cheaper for most expatriates.

Other Costs

Household products, personal hygiene products, and various other items are usually inexpensive in Mexico if you purchase local brands whenever possible. A $100 monthly budget is more than enough to cover these kinds of expenses. However, regular purchases of contact lenses, new clothes, home decorating items, souvenirs and the like can quickly lead to higher costs.

Most sizable cities in Mexico offer regular and inexpensive public transportation. Bus fares average about 40 cents for a ride or a little over $20 for a monthly pass. Taxis are also cheap in many cities, with fares starting at $1.50 plus about 75 cents per mile. Somewhere in between a bus and a taxi, so-called collectivos, combis, and minibusses run along defined routes in many cities, stopping whenever and wherever a passenger wants to get on or off. Fares are slightly higher than a regular bus, but the ride is generally faster.

A Sample Budget

Basic living costs include $300 for rent; $100 for utilities, cellphone service, and Internet; $200 for food; $50 for transportation; and $100 for personal and household expenses. The remaining $250 is available for health care, dining out, entertainment and travel, or you can put it away in an emergency fund for future use.