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Thursday, January 9, 2014

The Real Cost of Living in Panama

Hey friends,

I thought I'd write about cost of living today. I go over cost of living in each destination we cover at Panama For Real (www.PanamaForReal.com), but it's very location specific in those reports. So, here in this blog post, I want to cover cost of living in general. What does that mean?

Things like cable TV, Internet, phone service, cell phone service, gas (for cooking or gas dryers), and many other budget categories won't change much, no matter where you're living in this country. However, some of the others, like rent, electricity, entertainment, and food costs can fluctuate depending on where you base yourself. 

I decided to write this post after visiting a mini-supermarket across the street from El Panama Hotel on New Year's Eve. It was hours before the festivities would begin, the kids were hungry, so I walked across the street with my daughter to get some snacks for the hotel room. While I was there, I was appalled by the prices I saw on the shelves. Everyone knows if you buy snacks in a hotel gift shop, you're going to get price gauged, but a mini-super across the street charging outrageous prices? Come on. 

A bag of Cheetos that would usually cost less than $3 was going for $4.95. A bag of Doritos that would cost $.99 anywhere else, was priced at $3. A six pack of beer, local brand, that would cost maybe $3.50 was priced at $5. Then, I overheard a couple speaking English in the next aisle. I heard the husband ask the wife if she wanted coffee. I rounded the corner and saw that he was holding a medium size bag of coffee that would cost $4.95 in any supermarket in Panama. I heard him say to his wife, "It's $7.95." I immediately walked up to him and whispered in his ear that he shouldn't buy the coffee. I told him that the Rey supermarket was right around the corner and would sell the same bag for less than $5. 

See? Less than $5

This reminded me of how much the cost of living fluctuates across this country. For anyone living right there, in the heart of the city, near the hotels and casinos, price gauging is a way of life. Imagine you're one of these young college-age kids moving to Panama to teach English. Most of them get an apartment in the middle of the city where they think the prices in their immediate vicinity are fair prices, the norm for living in Panama. That might not be the case.

Panama City isn't a low-budget destination anymore

Now, for those living there, in the heart of the city, higher priced foods and utilities is something they have to get used to, because, for the most part, it wouldn't make sense to travel far away for a tub of butter or a gallon of milk. This is important to know when establishing the budget you'll need when moving to Panama. 

So, what I'd like to do is take the general budget that I use when putting together the PFR Location Reports, and break each section down. So, let's start with Rent.

How much will it cost for a roof over my head? 

Rent is one of those things that varies, depending on where you're living. I'm going to be honest here, and tell you, straight up, that Panama City is not a budget destination anymore. Not for most people and definitely not for people wanting to move here on a shoestring budget.

Where we lived in Villa Lucre

Can you find low-cost rent? Sure, well, I guess that depends on what your idea of low-cost rent is. The problem is, in many of the places where the rent is lower, safety can sometimes become an issue. For example, in places like San Antonio, Cerro Viento, Brisas del Golf, and Villa Lucre (this cluster of neighborhoods is located on Ave. Domingo Diaz near the outdoor shopping center, Los Pueblos), it's still possible to find 2-3 bedroom houses for rent, for as low as $700 per month. I've lived in Villa Lucre and had no problem at all. However, right behind Villa Lucre is an area called Samaria, which is one of lower income areas known for being not-so-safe, especially for foreigners.

Samaria, on the hill, in the background

Brisas del Golf has some very nice homes, homes that start at $800 per month and skyrocket from there. I'd live in Brisas del Golf and wouldn't be concerned at all. Brisas is close to Metro Mall and has a Pricesmart (like Costco) and nice restaurants and supermarkets. The traffic into and out of the area is insane most hours of the day. 

Brisas del Golf from above. See the higher-income gated community in back?

My wife tells me all the time about homes getting burglarized in Brisas. And I know it's true. So, you can live there, and probably be fine, but you have to understand that for the lower rent, you're going to be living near the lower income areas and in Panama (much like anyplace else), as much as I hate to say this, a lot of the time it's The Haves and The Have Nots. 

Rent in Marbella's banking district can be quite expensive

So, realistically, unless you're planning on renting a room in someone's apartment (which is a popular set up for single people here), to live in a decent area, you can expect to pay at least $800 per month, and that's very low. Looking online, just now, I saw a 3-bedroom apartment in Juan Diaz going for $650, but in that area you'd be living very local. If you want to live in the nicer parts of the city, downtown Panama City, and want an apartment you should be looking at the following areas, and expect to pay closer to $1,000+ per month: Obarrio, El Carmen, El Cangrejo, San Francisco, Marbella, and Bella Vista, Punta Pacifica (I'm sure I've missed a few, but those are the main ones I can think of right now), going from the lower end to extremely high-end.

Costa del Este, which is a suburb on the outskirts of Panama City (I reported on Costa del Este here), has apartments starting at $800 per month, but you have to search for them.

This place in Costa del Este had rentals starting at $1,200 per month

A good majority of the people wanting to move to Panama have no interest in living in the city. It's the interior of the country that holds great appeal. So what is the rent like once you abandon the high-rise condos and the hectic Panama City streets? Not all places outside of the city are super affordable, but most of the time you will get more bang for your buck. 

Coronado, Boquete, and El Valle de Anton are probably the three most expat-friendly, move-in-ready destinations, which of course makes them a lot more costly. Rent in Coronado and in El Valle de Anton is usually around $1,400 on the low end. You'll find homes in Boquete advertised at $1,000 and up. My friends and readers living in these areas, please let us know what you think about these figures in the comments below as I've visited all three, but haven't done a serious investigation yet (although we definitely will before 2014 is over).

This house in Penonomé was going for $700 per month rent

In smaller towns like Aguadulce (read my Aguadulce report here), Penonomé (read my Penonomé report here), Rio Hato, Anton (not El Valle), Capira, Las Tablas, and many other places, you can find homes for rent for as low as $300 per month. The trick is, in any destination, if you're able to, don't stick to the Internet or real estate agents to find rentals. Sure, if you have no other way to go about your search, these methods will suffice, but the real bargains are found when you visit the area, make friends, and find out about rentals by word of mouth. Sometimes a trip to the local supermarket will yield great results. You might find the advertisement for a two-bedroom house pinned to the wall near the front door, going for only $400, in a market where the lowest price you found online was $1,000 per month. People know there's a good chance that anyone looking for a rental online is probably a foreigner, and foreigners are usually unaware of the going prices and usually have more to spend. 

So, keep reading our location reports at www.PanamaForReal.com, and if you want to compare the cost of living in different towns we've covered, check out our Budget Snapshot here

Also, I've yet to find a real estate agent to work with. I've found realtors who are very location specific, but if any readers or friends of readers would like to work with us and are really interested in helping our readers find a home here in Panama (not ripping them off), please get in contact with me at chris@panamaforreal.com. I love the immigration attorney we're working with and it'd be great to find a real estate agent we can have the same type of relationship with.

In the meantime, if you find that you really do need to search for something on the Internet, the two websites I use all the time are http://www.encuentra24.com/panama-en/classifieds and http://www.compreoalquile.com/

How much will it cost to power my home? 

Electricity is one of those things that Panamanians have mastered and we foreigners can't seem to get a good grasp on. I know. I'm living it day by day. When I travel around this country, I always try to figure out the average electric bill. That's difficult because one person might run their air conditioner all day long while another might not even own one. Most Panamanians don't use an air conditioner, or if they do, it's usually only in the bedroom. Most have gotten used to keeping the windows open and fans going. This significantly reduces the electric bill.

My electric bill, having a family of six of us, all spoiled by living in the U.S. where we always used our central air system, hovers close to $300 per month. That hits my wallet hard. So, this is something you have to keep in mind when putting together your budget. If you live in Panama City, which is hot most of the time, and you live near the ground floor, you'll need to use an air conditioner or get used to the heat. If you live on the penthouse floor, you might be able to get used to just letting the breeze blow in, but let's face it, if you can afford to live on he penthouse floor, you can probably afford to crank up your AC.

From up here in Nancito you might not need an AC

In places like Volcan (read my Volcan report here) and Boquete and even the mountain town that's super close to Panama City, Cerro Azul (read my Cerro Azul report here), there's a good chance you'd never need to run the air conditioner. In these places, the nights are quite cool, sometimes even requiring the use of a fireplace. You might find daytime temperatures in he 70s and nighttime temperatures in the 50s.

From Cerro Azul the views are amazing and the weather is cool

When I first moved here, I had a container shipped with all of our furniture and stuff, but I decided to buy our appliances in Panama. I wanted everything electric. I'd used a gas dryer and stove when I lived in Aurora, Illinois, and I hated having gas appliances. I was warned, over and over again, that I'd be better off buying a gas dryer and stove here. I eventually conceded and bought gas appliances. I'm so glad I did. Not only has it helped reduce my electric bill a little bit, but it has helped greatly anytime Panama City has had any issue with electric. Power dips and power outages occur quite often. Not so often that it's a concern, but they happen, and every time we were without power, I was so happy I had a gas stove. Plus, for most people without kids, you can pick up one of the $5 propane tanks to cook with and it'll last you at least a month. I use a $5 tank for my dryer and have the gas company deliver the huge 3 month tanks (usually around $45 per tank) for the stove. 

Gas tanks being delivered to Cerro Azul

So, to wrap this electric issue up, I'd say that in most towns, especially the small towns in the interior, you'd be safe to budget about $150 per month. That should give you some wiggle room. Again, remember, if you use the AC all day every day, you can see bills upwards of $300. 

If you've looked at any of the budgets on the PFR site, you'll notice that I've never included water and garbage. I probably should. These are usually very low, especially if you don't have kids and aren't letting them play in the front yard with the hose every day. The costs vary depending in which zone you live. Water and garbage collection are usually combined on one bill and will probably cost you less than $30 per month total. I'm not in the very affordable zone and my current water bill is $20 and our garbage bill is $8. 

Here are a few good websites to know. Just FYI, most of the websites I give you in this blog post will be in Spanish.

Ensa (for electric): http://www.ensa.com.pa/
Idaan (for water): http://www.idaan.gob.pa/
Panagas (gas): http://www.panagas.net/
Tropigas (gas): http://www.tropigas.com.pa/
Union Fenosa (gas): http://www.gasnaturalfenosa.com.pa


Cable, Internet, phone, and cell service? 

Most people living in Panama will either use Cable TV or satellite and the Internet and phone service is usually wrapped up in the package. The basic bundle typically costs about $45 for all three and of course becomes more expensive if you add extra channels and higher speed Internet. 

Cell phone, Blackberry, and Smartphone service really depends on the provider you decide to go with and whether or not you own the phone. If you go with one of those plans where they give you the phone, your bill will be a lot more expensive. A friend of mine got a new Smartphone and one of the more expensive plans and her monthly bill was about $100. 

3 cell phone providers are located at this end of Metro Mall

On the other hand, I bought my own phone, got it hooked up so that I have data for $10 plus tax per month, which allows me to check Facebook, chat with anyone who has the Whatsapp app downloaded on their phone, and lets me check the Internet. I buy talk time minutes at the supermarket cash register. I don't talk on my phone a lot, so I just buy the $5 prepaid card and it lasts me awhile. I put the code into my phone and I have $5 worth of talk time. One cool thing about Panama is you don't pay when you receive a call. So you can literally have no minutes at all on your phone and still answer the phone and talk if someone calls you. I remember in the States, the majority of the charges on my bill were from incoming calls. That's ridiculous. I like the Panama way of thinking. My monthly bill is about $11 per month, plus $5 in minutes if I want it. I chat with everyone through Whatsapp, Facebook chat, and Google chat, so it's rare that I call anyone.

My mom and brother were on the computer 
singing happy birthday with us on Skype

Speaking of calling people, we keep in touch with family back home very easily. I've heard lots of talk about the Magic Jack and other services like it, but we just stick with Skype. We Skype with my mom every Sunday, completely free. Since we both have skype, we connect for no charge. Grandma Jackie gets to see the kids every Sunday. 

Anytime I want to make an actual phone call to the States I just buy one of the $5 Telechip International cards, which gives me 5 hours talk time. The hours expire quickly though so you have to remember to use the card when you have it. So I spend maybe a total of $5 per month to talk to people outside of Panama. You can buy the Telechip International card at the cash register of most supermarkets. They sell $10 cards too. 

Here are the links to the main cable companies and cell phone providers in Panama. 

Cable Onda (cable TV): http://www.cableonda.com/

Cable & Wirless (cable TV and Mas Movil cell service): http://www.cwpanama.net/residencial/

Sky TV (satellite): http://www.sky.com.pa/sky-ca

Claro (TV, Internet, and cell phone): http://www.claro.com.pa/portal/pa/pc/personas/

Movistar (cell phone): http://www.movistar.com.pa/onsite/index.php

Digicel (cell phone): http://www.digicelpanama.com/

Eating on the cheap

The subject of food costs is one that I dread each month when putting together the budget, because it's so subjective. I have no idea how much each person is going to spend grocery shopping each month. So, I do my best to put together what I imagine a couple spending, with a little bit of room to play with the numbers. 

The most expensive budget I put together last year was for Amador Causeway. Most of that was because of the rent. Rent is expensive on the causeway. Unless you're renting a tiny room on someone's parked boat. Even with the cost of living so high on the causeway, I set the monthly food budget at $400. It was the same in Costa del Este, which is another high-rent area. For most of the areas outside of Panama City, in the interior, I set the food costs at about $300. So what creates that difference?

In Panama City, you're more likely to buy imported goods. Velveeta Mac & Cheese, Corona beer, Apple Jacks cereal...the list goes on and on. If you buy things that are imported from the United States or anywhere else, you're going to spend a lot of money. You can reduce your budget while living in the city, simply by not buying so many imported goods. Just take a look at the supermarket tips on the PFR site to read more about that. 

Also, in the interior of the country, especially in places like Aguadulce where vendors sell fresh fish plucked from the sea earlier that morning from coolers strapped to the back of their motorcycles, and other vendor sell nearly every fruit and vegetable you can imagine, you can save an incredible amount of money by buying these fresh items right on the street. In Volcan, vendors sell pre-packaged bags of miscellaneous vegetables to include cabbage, carrots, onions, etc. It's amazing, all very healthy, super affordable, and purchasing from these farmers helps them immensely. It's win-win for everyone. 

Penonomé's Saturday market

In Penonomé (you can see the video report on Penonomé here), I visited the Saturday market, which goes on every Saturday (and happens in many other towns, even in parts of Panama City). I picked up small bags of tomatoes, onions, green beans, garlic, and 2 heads of cabbage for $6. That's awesome! If I lived in Penonomé, I would never buy fruits or vegetables from a store again. Even in places like Coronado and Boquete, it's typical to see small fresh markets set up on the street, sometimes right out of the bed of someone's pickup truck. 

Check out these prices at the Penonomé market

A box of cereal packaged here in Panama might cost $3.65 while the same brand, imported (Lucky Charms is a good example), might cost $6.65. That's a three dollar difference for the same cereal. I have to admit, sometimes the imported cereal tastes better...but then again...sometimes the Panamanian version tastes better. A six-pack of Panamanian beer will cost just over $3, usually about $.57 per can. A six-pack of imported beer can cost around $8.

$4.69 for these Nestle Lucky Charms, while at the same store...

$7.09 for the General Mills Lucky Charms!

If you can learn to stick to the Panama brands, especially on stuff like floor cleaner and toilet paper, you'll find your budget a lot easier to maintain. 

What about having a little bit of fun? What can I expect to spend on entertainment? 

This is another subject that can vary depending on where you live. If you live up on the mountain of Cerro Azul, you'll find that there's very little to spend money on. You'll find a ton of walking trails and places to picnic or bird watch, but you won't spend a dime on entertainment unless you travel down the mountain. So it depends on you.

If you live in Panama City, near Calle Uruguay, you're more likely to head out to the clubs, the bars, and the fancy restaurants. Or even there you can save money by hanging out on the Cinta Costera for free. 

Free fun for the kids on the Cinta Costera in Panama City

If you live in Volcan, you can climb the volcano or fish in the river, or you can go to the pool hall or spend money in the few restaurants around. 

So how will you entertain yourself? Answer this, and you'll have a better idea how much to budget for entertainment. A young man on one of the Facebook pages challenged my budget in Condado del Rey, explaining that my $2,000 budget was not realistic as he easily spends $3,000+ in Panama City. Of course you can spend $3,000+ in Panama City. It all depends on your lifestyle. He likes to go out and have a good time. That requires a significant amount of money. 

If you live in Condado del Rey, a nice suburb of the city (read the Condado del Rey report here), you'll find a lot of small restaurants in town. You really don't have to leave the area unless you want to. You might only spend money on rent, utilities, and dining out once a week, or you can drive to Zona Viva on the Amador Causeway and party every night away. So, again, if you're retiring in Panama, just wanting to chill and relax, you can do that on the cheap, but if you're here to go nuts and party every night, it'll be just as expensive as partying on Miami's South Beach.

Condado del Rey, Panama City

My final thought on entertainment is, if you plan to dine out once a week, give yourself a good $200 extra for entertainment ($50 per dinner), a little more if you're headed to downtown Panama City. At a small restaurant in Las Tablas, I paid $5 for rice, beans, meat, soup, and juice. So you might spend much less than $50, or of course, you can find restaurants where you'll spend more. 

What if I need frequent medical attention?

I'm asked all the time about health insurance and the cost of medical care. I find the medical care in Panama to be much more affordable than in the U.S., and the doctors, God bless them, seem to actually care about solving the problem. I've never felt like a number here in Panama. 

I don't have health insurance. I know I need to with a family, and figure it out eventually, but the cost of medical care is so affordable here that I just haven't done it yet. My son went to the doctor a couple of weeks go and we paid $12 for the consultation and were given a prescription for medicine, which ended up costing about $10. My wife saw the doctor for $12 and then paid $11 for an injection. We took our son to the dermatologist for $40. We had no insurance during these trips. I've written about all this before.

Dr. Tiberio A. Rodriguez Calvo, a great dermatologist

I've seen that you can get full-coverage health insurance for about $140, if you're within the age limit. I honestly don't know much about health insurance. If you want to know more about insurance, the best expert I can refer you to is Kevin Bradley at http://panamakevin.com/. Check out his site and shoot him an email if you need insurance info. 

In every budget I've put together, I always add $50 for doctor visits. I figure, for a routine doctor visit, you'll pay about $25 (of course anything extra will cost more). So, for two people to each see the doctor, that's $50 per month. This is at the small clinics in most towns. If you head to the larger hospitals you might have to pay a little more for a consultation.

I also try to add a little bit for medication. I have no idea what your medication needs are. You might not need medication at all. I have borderline diabetes, so I just take a pill each day and I also take a pill for high blood pressure. I spend about $45 per month on medication. One of the cool things about Panama is the ability to not only purchase many of the medicines right over the counter that you'd need a prescription for back home, but you can also buy most medicines by the pill. So if you're running low on cash and there's only ten days until your next paycheck, buy 10 pills of the medicine you need instead of the whole pack. 

What if I want to check out the rest of Panama?

Cash for travel is another category I've included in the budget, but it's often difficult to nail down a number. In most places in Panama, you can get by without owning a car. This is important because if you're making payments on a vehicle back home, you won't be able to bring it with you. Or if you just don't feel like shipping a car. In these scenarios, you might find yourself without a vehicle. It's not that big of a deal. For me, having a big family, it's a lot harder to get by without a car, but if I were single, I think I'd enjoy taking taxis and taking the bus.

Panama City in the evening

In most of the small towns in the interior, you could easily get by without a car. Taxis to anywhere in the immediate vicinity will usually cost no more than $2 and buses are very affordable, only $.25 in the city. In places like Boquete or Penonomé or Volcan, where things are a little more spread out, it would probably be easier with a car. In Aguadulce you can walk just about anywhere you need to go, then hop in a taxi if you want to go to the beach. In Las Tablas, if you live near the town center, you wouldn't need a car to do most things.

The town center at Las Tablas

So travel inside of town I usually set at about $20 per month. I met a couple living on the beach in Las Tablas, who refused to buy a car. They didn't see the point. They lived on the beach, with great seafood restaurants nearby, and if they needed to head into the main part of town, they either hopped in a cab or took a bus. The cost of maintaining a vehicle, paying for gas and insurance, and renewing registration each year just wasn't appealing to them.

Uverito beach, just outside of Las Tablas 


Traveling outside of the immediate area will cost a little bit too. You'll either spend money on gas if you own a vehicle, or take buses that are very inexpensive. From Albrook terminal in Panama City to Penonomé I paid $5. From Albrook to Aguadulce, I paid $6. From Albrook to Las Tablas I paid $9. So you can see how inexpensive it is to get around. Plus, once you're out in the interior, buses from one small town to the other are very affordable. I paid $2.40 to take the bus from Las Tablas to Pedasi. You can get on a bus in Coronado and head up to the mountain town of El Valle de Anton for less than a tank of gas, for sure. 

I think it's safe to allow yourself $20 for traveling inside of town (a little more if you plan to take taxis everywhere instead of walking a little bit) and $40 for one trip out of town per month. That gives you $20 each, roundtrip. If you travel very far, like maybe from Panama City to David, you might need to allow yourself a little more. 

Any extras 

To make sure you're able to buy some of the extras, like bath soap, a T-shirt, toothpaste, a toothbrush, etc., I always put an extra $50 on the budget.

Other things to consider

I hope that I've been able to give you fair examples of what the cost of living would be like in Panama. Of course there are things I can't account for in every budget. If you're here with school-age children, and you're planning to enroll them in a Panama school (rather than homeschool them), the costs of schooling can be very expensive, so that's something you'd definitely need to add to your budget. For a list of schools, with links to schools and prices, check out my post on that here

Something else you might want to leave room in your budget for is your want or need to travel back and forth to your home country. If this is something you imagine doing at least once per year, add a section of your budget for savings. Maybe save $50 per month to add towards your travel fees. If you imagine you'll spend a great deal of time in the casinos (a lot of people do that here) don't start dipping into your food funds, instead, create a casino section of your budget. Oh, and if you're not moving here legally, full-time, as in going for your pensionado visa or something like that, remember you'll need to spend money every 6 months making a border run, so save for that. 

Living in Panama can be very rewarding and it's not as difficult as some people think. I honestly don't recommend it for people needing to work here, as I'm finding out it's very difficult to make money here, but if you have retirement income or any other income to live off of, life here can be great. Just make sure you keep track of your funds. I hope this post helps.

Thanks for reading,

Chris