What Is The Real Cost Of Living In Panama?

Street scene with Text about Cost of Living In Panama

You Must Ask Yourself 2 Questions To Determine What It Will Cost To Live In Panama (read below)

What Does It Cost To Live In Panama?”

It is one of our most frequently asked questions.

The short answer:
$1200/mo. for a couple to live comfortably.

But it is not a one-size-fits-all answer.

Your actual cost of living in Panama depends on your lifestyle & other choices.

2 Questions To Ask Yourself

  • What Lifestyle Do I Want?

  • Where in Panama will I live?

  • Will I Use My Capital to Buy My Panama Home and Car?

Answer those questions.  Read my posts on cost of living.  Look at costs.  Read relevant posts on forums.

Only then you can get a good sense of what your real cost of living in Panama will be.

Lifestyle choice

So, what lifestyle do you want in Panama?

Do You Want To

  • Travel frequently?
  • Continue to eat all your favorite brands of foods?
  • Have the luxurious lifestyle you have always wanted?
  • Rent instead of buy your home?
  • Have a full time maid and gardener?

If the answers to all  or most of the questions above is yes, your cost of living will be higher.

Budgeting For Travel

Travel is fun, but it isn’t cheap.   Well, if you just travel in Panama it can be very reasonable.  But any international travel, even if it just to go visit the grandkids, has a high price tag.   The more frequent you travel, the higher that line item will be.

Buying Imported Food

If you decide you must have hagen daaz ice cream and —–, on a regular basis your grocery bill is going to be much higher.   If you choose domestic brands and buy Panama’s many fruit and vegtable stalls you will save hundreds of dollars a month.

The Lifestyle To Which You’d Like To Be Accustomed

Have you always wanted to live in a grand house filled with expensive furniture, paintings, and the latest in appliances and electronic gadgets?   While it will cost you less to do that in Panama than “back home”, it is still going to set you back.

If it is a one-time capital outlay, and you have the capital, that is fine.  It won’t impact your monthly budget excessively.  But if this ideal lifestyle requires frequent cash outlays, it will still increase your budget.  Actually, things like appliances are more expensive in Panama than in North America.

Hiring Employees

Yes, in Panama hiring someone to clean your house and do your gardening is pretty inexpensive.   Depending upon where you live it can cost as little as $8 a day.

We have both a maid and a gardener.   The lifestyle we get by hiring help is worth it to us.  Of course, wages are lower where we live than in Panama City.

Rent vs. Buying

If you rent, the biggest line item in your budget will most likely be your rent.

So if you have the capital, it is better to buy your home.   Your monthly budget will thank you. THen you will also have a home you can sell if you need money in the future.

Although, renting when you first come to Panama is a good idea.  Renting will help you decide if you like Panama and gives you the flexibility to move to different towns or neighborhoods.

But once you decide where you want to live, your cost of living will be much less if you buy your home.

Real Budgets

Click here, To Examine and Learn from 25 Real Monthly Budgets of Expats in Panama.

Where You Live

Like anywhere else in the world, some places in Panama cost more to live than other places.

In many places in Panama, locals can live  easily on $300 a month.   I have no idea how.

Of course, many local spend significantly more.   Everyone’s budget depends significantly on his or her lifestyle choices and ,of course, income.

Regardless of where in Panama you settle, most people who come here from another country have a standard of living that they want to maintain to some extent.

Some places in Panama it will be cheaper to maintain that standard of living than in other places.

To get an sense of how cost of living varies in Panama, click on the links below:

For a glimpse in what costs are like in our town, Puerto Armuelles, watch the video below.

Cost of Living In Puerto Armuelles, Panama

Our friends Cove and Bethany Cook kindly offered to give their perpective on the cost of living in Panama in the video below.   The Cooks and their 4 children have lived in Panama for about 8 years.

You need to determine what life style you desire and what it will cost to maintain it in Panama.

Medical Expenses

Don’t forget to include medical expenses and health insurance costs.

Actual Expenses of People Living In Panama

Don Winner of Panama Guide asked people to submit their real Panama budgets.

If you want to read those, I collected them all and put all here.

Capital Investment & Outlay

If you can afford to buy your home and car, up front & in cash, your monthly budget will be lower.

For a little more detail on how your capital investments will impact your monthly expenditures, visit this post.

Conclusion

Some things are definitely cheaper in Panama, but some things cost more.  

Utilities

For instance, no matter how little water we use or don’t use here, our bill is $7.10 a month. It would be less than $4, if we were pensionados.
I am still astounded by that.

Electricity is also cheaper.

We pay between $30 to $40 a month.  More in the dry season since we use more fans.  But we don’t use air-conditioning.  We find that if you use air conditioning it makes it difficult to go outside.  It seems so hot outside, if you live in air conditioning.

Imported Goods

If you need to buy all the same food and brand names as you did in the States, then your cost of living will be higher.

How To Reduce Monthly Expenses

Your monthly cost of living in Panama will be less, if you

  • Pay for your home and car up front so you don’t have monthly payments
  • Buy your produce at fruit and vegetable stands
  • Don’t buy alot of imported goods
  • Cook at home
  • Don’t frequently go out to eat – especially at expensive restaurants
  • Don’t fully air condition your home 24/7
  • Live in less expensive areas of Panama
  • Limit international travel to once a year

However, if you don’t abide those lower expense guidelines, there’s literally no limit to how much you can spend each month.

To find affordable property in Panama, start your search by Clicking Here.

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  1. Hey Betsy,
    I really enjoy your site here – you seem to give realistic information that is up-to-date. We are in our ealy 60’s, and have 2 adopted young children, 11 and 14. We have been considering moving out of the US, but have been uncomfortable with the information we have received from various places. It’s hard to be unbiased, I guess, so the information was either wildly ‘for’ the location, or wildly’ against’ the location. However, the info you post here strikes me as probably ‘right on the money’. It has made the idea of Panama seem much more realistic. I have a question for you….do you know if Panama allows homeschooling? We homeschool, and have been appalled by some things happening to people/families who homeschool in other countries. We also have 4 dogs – do you think that will be a problem? What about vets? I spoke with a person who was living in Guatemala, and she told me their dogs were killed by the locals (no, the dogs were not aggressive, and were kept in their fenced area). I suppose that can happen anywhere, but my understanding was it was not uncommon there. Maybe it’s not true, but it is a cause for concern. Also, I understand that dengue fever is present along the coast…….Is this a cause for concern? How often do people contract the various tropical diseases that are supposed to be endemic in Panama? It must sound silly to ask such questions since you live there, but I don’t know where to get answers that are realistic. I must have confidence in you! Thanks very must for these informative posts. Keep up the good work. Suddenly, it seems as though we actually might be able to swing it! Yea!

    • Hi Barbara,

      Thanks, I do try to paint a realistic picture of Panama.
      I don’t think describing Panama through rose-colored glasses really
      helps anyone in the long run.

      Kudos to you and your husband for adopting just when most people are thinking
      of retiring – sans kids.

      My parents had their last 2 kids (twins) when my dad was 50.They had 7 kids, I’m the 4th one.
      They didn’t have an empty nest until my dad was almost 70.
      However, my mom was 12 years younger than my dad, which made it much easier for him.

      Technically you cannot homeschool in Panama.
      However, if anyone official asks, which is unlikely, simply cite a curriculum
      or on-line school that your children are using. I am very much an unschooler,
      so my children don’t use those. But I have never been asked.

      A friend of mine was asked just once in her 9 years of homeschooling in Panama. She simply named the curriculum they were using, and that was the end of it.

      Dogs are not going to be a problem.
      My neighbor has about 8 dogs. Luckily our houses are pretty far apart so I don’t hear them barking.
      I have never heard of anyone harming a dog that is not harming them. I wouldn’t worry about that.

      Vets are another story.
      There are good vets, but there are also terrible vets.
      I would ask a number of people, preferably expats, to recommend a vet.

      Dengue fever is a possibility, but they keep pretty good control of it.
      You hear about a case occasionally in Puerto, but not often.

      The health ministry goes through neighborhoods pretty regular to lower any risk factors.
      For instance, you will be cited if you have standing water, even if it is only coconut shells.
      There is no real problem with tropical diseases here – at least in the part of Panama where I live.
      Not that they don’t happen, but its not anything approaching an endemic.

      The biggest health concern for me is the sun.
      Keeping skin and eyes protected from the strong sun at the equator.
      But that is easily done with good sunglasses, beach gear, and clothing.
      Reminding the kids to protect themselves will be your biggest challenge.

      Thanks again for commenting and for your compliments on my site.

      I hope this was helpful. If you make it to Puerto, give us a holler.
      – Betsy

  2. Sounds like if you have a car payment and a house note, you’re paying $1200-1500 a month to live modestly, $2k a month to live high on the hog.

  3. My wife and I live a alone but want to find a nice. 3 bedroom and 2 bath so when our children and grand kids come visit

    • Hi Cecil,
      I am sure you can find something like that.
      If you are asking whether we know of something like that in Puerto, please use this link to ask me

      Best wishes

  4. Excellent goods from you, man. I have understand your stuff previous to and you are just too wonderful.
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  5. this was the most useful information I have found so far on the cost of living in panama or costa rica.It has all the information but more importantly, explain why the numbers are what they are.

  6. Ben den Holder :

    It was really nice to read what people live on in Panama. My wife was worried about this issue, now I can show her that we can easily live on the pension we will be getting in 2015.
    I did not read anything about the pensionado plan, does this mean none of these people had this?
    It would mean a significant saving, or am I wrong?

    • Betsy & Reyn :

      Hi Ben,
      I’m glad the cost of living info was helpful to you.
      I am sure some people did have the pensionado visa. It does give you some savings. We don’t have a pensionado visa ourselves. As a pensionado, or anyone on a visa who is of Panamanian retirement age, you can save money on utility bills, eating out and staying at hotels, as well as medical costs.

      Please visit this link to see some posts I have done on the Pensionado visa
      http://www.livinginpanama.org/?s=pensionado

      However, I don’t think it adds up to significant savings unless you have alot of medical expenses and will travel in Panama frequently.

      One of the biggest items in our budget is travel costs to visit people back in the States. Of course, there are 4 of us. Whether the the 25% off plane tickets you get from a pensionado visa actually results in savings you will have to verify for yourself. Since the discount applies only to certain types of tickets, it is my understanding that the tickets you can find online are even cheaper than such “discounted” tickets.

      I hope this is helpful.

  7. As a percentage of what a person’s living expenses are in the US, what would you say that is in Panama? For example if it costs $4K/mo in the US could a person have the same standard of living in Panama for 50% of that, or $2K/mo?

    • Hum.. I have never thought of it that way.
      As you know the cost of living in the states varies widely. $4K in Southern California doesn’t go nearly as far as it does in Oklahoma.

      I can say that a couple can easily live here on $1200 a month. I know a family of 6 that does it for $800 a month. They live in a nice house. Are careful about money, but don’t seem to be in hardship.

  8. Send more info. Thank you