Save Money by Moving to Ecuador

The following is a guest post from Mr. Everyday Dollar.

Seemingly out of nowhere, Ecuador has shot to the top of many lists touting the best countries to retire to. The country popped out on top in International Living's yearly poll, and ABC News recently did a segment that profiled Americans finding paradise there. So what are the reasons an estimated 5,000 to 10,000 Americans have flocked to this tiny country tucked in the northwest of South America? One reason is certain: an incredible value for their everyday dollars.

Let's dive deeper into Ecuador and figure out if it's really better than other similar countries by taking a look at its true cost of living and going over a few questions we should ask ourselves before buying a one-way plane ticket, packing up our homes, and heading south of the border.

(1) Why Ecuador?

Thailand. Mexico. Italy. Panama. There's a lot of options available for people who are looking for a safe, somewhat developed, and cheap country to live in. So, what makes Ecuador top dog?

• Ecuador is just a 5-hour flight from Atlanta, which makes getting to and from to the U.S. relatively fast and inexpensive.
• Ecuador boasts people that are known for being friendly and family focused. Many Americans report being welcomed with open arms into their communities, which makes living there easier and happier.
• Ecuador has culturally vibrant cities like Cuenca and Quito which offer a bustling food scene with world-class chefs, great museums, and fine symphony orchestras.
• Ecuador enjoys pleasant weather year-round, which is why most residents have no heating or air conditioning.
• Ecuador boasts rainforests, beaches and the Andes mountains to explore; all of which are tucked into a country the size of Wyoming. Plus, there's the amazingly biodiverse Galapagos Islands.
• Ecuador is known for its top notch medical facilities and doctors.
• Ecuador has adopted the U.S. dollar as its currency, meaning there's no complicated math to perform in your head to figure out how much anything will cost in dollars.

(2) Monthly Living Costs

Just like some people in the U.S. live on $5,000/month while others are able to live on a fraction of that, the same can be said of living in Ecuador. It will cost as much or as little as you want, depending on your lifestyle and the level of comfort you want.

With that in mind, let's cover the monthly costs for two people living what I consider to be a comfortable lifestyle. With its old world feel, low crime, and many public parks, we'll base ourselves in the city of Cuenca along with its other 500,000 residents and fast growing expat community.

Food

Food in Ecuador is very cheap compared to the U.S. You can eat dinner out for $2.50 and wash it down with a beer for $1.00. A good rule of thumb is to expect to pay 50% less on groceries and restaurants living here. Monthly cost: $200

Healthcare

Out-of-pocket expenses for doctor visits, procedures, and drugs are a fraction of what you would pay in the U.S. The International Living poll concluded that health care in Ecuador costs 10 to 25% less than what it does in the States. This means a visit to the doctor will cost, on average, between $25-$45 if and when you need to go. Monthly cost: $0

Housing & Utilities

A newer house containing 2,000 square feet, four bedrooms and two and a half bathrooms in a safe area about five minutes from the city center will cost around $350 a month. An apartment with 1,800 square feet, three bedrooms and three bathrooms in a hip neighborhood close to the river will run around $400. Don't forget to figure in an additional $35 a month for internet service, $20 a month for electricity, $10 a month for water, and $10 a month for the propane hot water unit. Monthly cost: $475

Transportation

A one-way ride on the bus is a quarter (yes, as in 25 cents) while a month-long bus pass will cost $15. The bus pass only makes sense if you ride it more than 60 times per month. We'll opt for two of those. Monthly cost: $30

Miscellaneous

A cell phone with a prepaid SIM card will cost around $12 a month, and we'll take two. We'll throw in an extra $200 for entertainment, clothes, and other expenses that will inevitably pop up. Monthly cost: $224

Total Monthly Cost (for two): $929

(3) The Questions You Need to Ask Yourself

First, understand that little to no English is spoken in some areas. If you don't know Spanish, are you willing to learn the language? Granted you certainly can get by with English and knowing a few common Spanish words or phrases, but knowing the primary language will help immensely with quality of life: forming new friendships, making daily interactions with Ecuadorians more pleasant, and gaining a deeper understanding of the culture. Basically, it will help make you feel like you're not an outsider.

Second, things do not happen as quickly or efficiently in Ecuador as they do in the U.S. Are you willing to be patient and spend countless hours on the phone getting internet service installed? Or swallow the cost of an item you purchased that broke, because there's no return policy? These are things to think about.

Third, and perhaps most importantly, things you take for granted now will be a distant memory if you decide to pick up and move to Ecuador: your favorite type of peanut butter won't be available, you won't get to wash your clothes in hot water because they don't hook washing machines up like that, and the sidewalks and streets have a few too many unfixed potholes in them. Of course, and perhaps the most important, your family and close friends will be far away.

Moving to Ecuador can certainly be a dream come true for many of us wanting to stretch our everyday dollars. However, be sure to both do your own homework and visit the country before moving there. You may decide it's not a good fit for you and that's good to know upfront as opposed to later when you've already made that cross-continental move. But as many already have, you may very well fall in love with the country and the people and decide to move there. To many, you'd be hard pressed to find a better place. 

Comments

[Michelle]

Very interesting! We have been thinking about moving, or at least doing some long-term traveling. Might need to add Ecuador to our list :)

[Mark]

I have read that the crime in cities like Quito is really bad. So many people on the internet have said your chances of getting robbed are quite high, I tend to believe it. I have heard Cuenca is safer, but it has major issues with diesel pollution from buses.

[Roy]

I am planning to relocate my family from the Philippines to Cuenca in Ecuador. My research is bang up to date and I can advise that the crime rate in Cuenca is below that of American cities of similar size, and has been declining year on year for several years now.

As for pollution, the buses in Cuenca have produced too much pollution in the historic district but that is being addressed. Work on a light rail system along European lines is starting about now, and bus movements in the historic district will be far more restricted with some all pedestrian zones.

Cuenca has many green park areas which are steadily being renovated and updated to make them even more family friendly. Can't wait to get there, just have to sell our land in Palawan.

[Sarah]

Why do these posts never discuss issues like: (a) difficulty of attaining the equivalent of permanent resident status or (b) near-impossibility of securing a mortgage in a country in which you don't have permanent resident status?

[Mr. Everyday Dollar]

@Sarah because it would warrant a whole separate post :). You raise really good points. Navigating the permanent resident visa process in Ecuador is not for the faint of heart. There are six different types of permanent visas, all with their own requirements: Pensioner Visa 9-I, Investor Visa 9-II, Industrial Investor Visa 9-III, Agent Visa 9-IV, Professional Visa 9-V, Dependent Visa 9-VI.

For early retirees (or anyone without a pension), that also have a Bachelor's degree, the best route to residency is the Professional Visa 9-V. All you need is to have graduated college and around $350 to cover government fees. A bargain compared to other routes like the Investor Visa 9-II which requires an investment of $25,000 in the form of a CD or real estate, which the government takes 5% of if you ever leave the country.

However, note that visa requirements change regularly so it's in one's best interest to speak with an attorney in Ecuador during the process, although many expats have gone it alone and received permanent visas without issue (just a lot of paperwork!).

[Limey Junior]

I guess if it's your only option for retirement, then it will work fine.

[Mark]

@Roy. Thank you for the update on Cuenca. I don't have any immediate plans, but it's something I might look into for the future.

[Mark]

@Sara,

The Visa issue is a legit. one. But obviously it is doable because a lot of Americans live down there. As for real estate, while it's a legit issues, not everyone cares about owning their home. I have no desire to buy real estate in the U.S., let alone a foreign country, so that issue doesn't matter to me.

[No Waste]

It might be a cheap to live there, or somewhere similar, but there's always a cost.

I don't think I could bail on the US of A...family, friends, familiarity, food...

[Rich Uncle EL @ MoneyWatch101]

Hey I think this post details a viable cheaper alternative for a decent retirement. For 1200 a month you can live good in a city that offers so much, try doing that anywhere in the US. It's an option for people who did not prepare much for retirement or others who want some adventure in the golden years.

[Charlie]

Mr. Everyday Dollar, I read your post, and disagree with some of your findings. I live in Bahia de Caraquez on the north Central Coast of Ecuador. We have found several of the costs to be higher than what you have described, here in Ecuador. For example cell phones for $12.00, at @.18 to .25 per minute depending on if the other party you are calling is on your same provider and if it is a land line, will not go very far. We spend approx. $45 per phone per month for texting and phone calls. And we are on a plan which you need a Bank Account for 6 months to get and a Cedula(National ID Card) to get. The prepaid plans are more expensive.
While you can find a meal such as the lunches for $2.50 to $3.00 the Restaurant Food is More like $4.00 to $10 per meal depending on what you order. The $200 is low compared to reality per month.
For Healthcare you need to add for Hospital visits. You can get set up on the Social Security Plan they have down here and you'll have to pay a minimum of about $65 per month into the plan depending on your earnings. This will cover Major Medical Items. The Doctor Visits are correct about $25 or so.
Home costs seem low also. Water costs quite a bit more for us . There are 3 of us and we spend about $140 per month to pay for 4 tanker trucks to be brought in where we live. About $35 per truck.
As far as the visas they are not that hard to get. Once you have all your paperwork in order, Originals, Apostilled, Notarized, Translated, Legalized etc. It is simply a matter of choosing the one that works for you and applying for it. It may seem daunting however they have processed many Expats here and they will assist you. If all is correct, Original and properly certified it will simply be a matter of applying and waiting for the process to work it's way through.
We have discussed and are working with a Major Bank here in Ecuador to secure Mortgages for Expats. They ARE available for 10 to 15 year terms. Higher interest rates but can be secured!
We prefer and live in a Smaller Coastal City, Bahia de Caraquez. No issues with diesel pollution, crime is very low here and much less City type Stresses. We are from Seattle WA. We found our permanent resident visas easy to get and have our Cedulas as well.
I am sure others may not embrace the Culture here but we enjoy it. Not trying to be offensive, but we live here and can provide first hand information. We are Developing Property 20 minutes North of here. The climate is a huge plus here for us, always warm and yet a wonderful breeze cools us every day.
Living It and Loving It here in Bahia, Ecuador.
Charlie

[Brooklyn Money]

This sounds like a good option! I'm a surfer and plan to retire for at least part of the time in Central or South America. I had been thinking Nicaragua.

[Sarah]

@Mark: But you do have to look at quoted "housing costs" with a skeptical eye to make sure they are not based on housing prices for citizens. I can't tell from this post what the basis is.