Excerpted from Living Abroad in Costa Rica

What's the cost of living in Costa Rica?

You can definitely live in Costa Rica for a lot less than what you’d be spending in the U.S. or Canada, but it takes some conscious effort. What helps is that most people who move down want to pare down, to let go of all they’ve accumulated over the years. They want to own less, work and spend less, and enjoy life’s simple pleasures. With this approach, it’s not hard to live economically.

Also see: Can I live on $20,000 a year in Costa Rica?

Calculating cost of living is by no means an exact science—so much depends on your personal definition of what is essential. Some can’t live without hot water on tap throughout the house—this is not the Costa Rican style, and will cost you more. Others scrimp on housing but spend more on entertainment. Most end up compromising—living a life that is frugal but with a few frills. They take buses but splurge on excellent meals twice a week. Or they live in a small apartment in a modest San Jose neighborhood, but take a beach vacation every month.

What about the numbers? Again, it’s hard to pin these things down, but from my observations of many foreign residents, I would say that an exceptionally frugal person could live on as little as $800 a month. This would mean not owning a car (vehicles are expensive here), renting a small apartment or house, eating at home, and thinking twice about going to the movies or ordering a double scotch. But most people, the frugal with frills types, will need at least $1500 a month to live well. These are budgets for single people—if you’re a couple, add another 50% to the figure, though this may be an overestimate, since often two can live almost as cheaply as one.

Make no mistake, Costa Rica is not dirt cheap. Some things are cheaper, some cost the same. Some, like luxury imported items, may even be more expensive.

What's cheaper in Costa Rica than in your average North American city or town: real estate (in most areas), land, construction costs, health insurance and medical care, wages and salaries for your employees, public transportation, movies, plays, museums, food (if you shop where the Ticos shop), car repair. Private schools here are too expensive for your average Tico but are a lot less expensive than U.S. private schools.

What costs the same or is even more expensive: automobiles (high import tarriffs), gas for your car, beachfront real estate, high-end condos, big-name musicians playing in the National Stadium, important international soccer matches, beer, Flor de Caña rum.