The cost of living in Puerto Rico is higher than in parts of USA.
What? No Way! No How!
I heard this statement recently and I bristled. I know that for us, it has been a lot cheaper to live here in PR that it was in Michigan. So, how could someone think that it’s cheaper in the States? But, it’s been a couple of years, and things change as we go, so I decided to look at the numbers again and see for myself.
Is It Cheaper To Live In USA Than Puerto Rico?
First, I have to acknowledge that we lived in an expensive area/state in USA. It was a hip collage town with good salaries and lots of well-paid people. This was mainly due to the high salaries the University of Michigan paid, comparing to other employers. We both owned and rented in the area and both rents and real estate taxes were ridiculously high.
So, instead of looking at our old area, I decided to compare the cost of living of Puerto Rico to cost of living in a less expensive area in the States. I chose Tucson Arizona. And, I chose it for 3 reasons:
- We have family that live in Arizona, so I am familiar with the costs.
- Tucson is another hip college town.
- We were just there, so I was curious.
The biggest concern I always had about living in the States, has been the cost of insurances, see my post Why Move Abroad Instead Of To Florida? This included health insurance, car insurance, renters, real estate insurance, or whatever.
So, when I started putting together the numbers, I was certain Puerto Rico would be cheaper than Tucson, AZ. But, to my shock and surprise it was not! WOW! In fact, Tucson came up almost $2,000/year cheaper – WHAT?!
OK, let me show you my numbers and then I will tell you more…
Comparing Cost Of Living In Puerto Rico To Arizona
|Rent (800 sft apartment)||750||9000|
|Yearly Cost Of Living||$33,268|
Now let’s look at the same costs in Tucson Arizona:
|Rent (800 sft apartment)||693||8316|
|Total Yearly Cost of Living||$31,098|
Well, clearly, some of the numbers for Tucson are estimations but I am going by numbers provided by my family members that live in Arizona, so I think they are close to the mark. The Puerto Rico numbers are based on what we have spent for the past 2 years living on the island. Note that we live pretty frugally here. We conserve energy by choosing to not use AC very much, and we do not have cable, just internet and basic local channels. We would do the same in AZ.
On the other hand, our going out/entertainment costs may be higher than yours. It all depends on how you live and what you choose to do for fun. For example, we found that dinners out in Puerto Rico, in a nice restaurant are more expensive than in AZ. However, there are lots of cheap local places to eat too. But if you’re a movie buff, well, PR is much cheaper at only $6.50/pp!
Health insurance costs for AZ are taken from an online estimator from Healthcare.gov and they are specific to us, our income, and the fact that only one of us needs coverage (Tim gets his insurance elsewhere). But for us, clearly, it would be cheaper to live in Arizona.
The results were a bit surprising to me. We have been toying around with the idea of moving back to the mainland once we learned how difficult and how expensive it is to run a business here in PR. As a result, we have been trying to figure out what to do (that’s a topic for another post) but from a pure cost of living standpoint, the numbers really surprised us!
So, then, I decided to go a step further. I decided to add Spain to the mix. We spent 2 months living there this summer (and loved it) and also have a good idea of the costs there. Here are my numbers (specifically for Granada):
Cost Of Living In Granada Spain
|Rent (800 sft apartment)||450||5400|
|Yearly Cost of Living||$20,160|
As I always say, it pays to put it on paper. There is nothing like seeing these numbers in black and white. We could tell that Spain was much cheaper but adding it all up, it’s A LOT cheaper.
So, Puerto Rico is definitely not the cheapest place to live, whether compared to USA or Europe. In fact, Poland (where my parents live), is even cheaper than Spain. Sooo…… maybe we’ll have to look at those numbers sometime too.
Bear in mind that I am not looking at costs such as sales tax and income taxes (I will write about those later). If you factor those in, than living in Puerto Rico becomes even less cost effective.
Naturally, your own going out/entertainment expenses will be different, as well as your car expenses and gasoline costs. Some of those things are dependent on where you live and how much you drive. But I think you get the idea.
So, there you have it; that’s how living in Puerto Rico breaks down on paper. It was shocking to me too.
PS. I want to add that we are keeping in touch with folks in Panama (the country we originally thought to make home) and they have confirmed for us that their average monthly spend is between $2,200-$2,500. So, not really that much cheaper than PR.