Budgeting Tips: Living in Panama on $1,000 a Month

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As a land of sunny ocean beaches and warm highland rainforests, cosmopolitan cities and quaint mountain towns, Panama is a popular destination for retirees and others seeking a comfortable lifestyle in a tropical paradise. The cities of Santa Fe and Boquete are beautiful highland destinations, while Coronado is the perfect home base for beach lovers. The city of David, not far from the Costa Rican border in the West, is nestled comfortably between the highland rainforests and the coastline, offering easy access to much of Panama’s diverse natural environment.

In these and many other locations, most expatriates should be able to live very comfortably on $1,000 per month, including some regular dining out or periodic trips out of town. However, a comfortable existence in the capital, Panama City, is probably not attainable on $1,000 per month.

Rent

Housing is quite inexpensive in Panama as long as you avoid the capital and high-end enclaves in other cities. According to international price data collected by the website Numbeo.com, rent as of October 14, 2020, for a one-bedroom apartment in a central district of Panama City costs around $840 per month. In comparison, rent for a similar apartment in the center of David is only about $515. If you are apartment hunting in an outlying area in David, rent is even lower.

Sharing an apartment with a spouse or a friend is a great way to save money. A quality three-bedroom apartment in a central location in David close to shopping, services and entertainment is $960 on average. Outlying areas offer the same accommodation for less than $440 per month. In Boquete, you and a partner can share a one-bedroom apartment for less than $400 to $750 per month, depending on location.

Utilities

Utility costs are generally reasonable in Panama, assuming moderate use of the air conditioner. Average utility costs including water, electricity, and garbage service are around $94 per month, according to Numbeo.com. Unlimited broadband internet service is available for about $46. If you have residency in Panama through the government’s Pensionado program, you are legally entitled to a 25% discount on all utility bills.

Prepaid cell phone service is available for about 14 cents per minute, not including plan discounts or other promotions. You may be able to keep your current phone for use in Panama. For television service, the cable company Cable Onda offers packages with a variety of international English-language channels, including many popular American news, sports and entertainment networks. The expatriate publication International Living magazine estimates cable or satellite television will run $35 to $50 a month. 

Food

Fresh fruits and vegetables are plentiful and cheap throughout Panama. Staple foods such as pasta, rice and eggs, as well as chicken and other meat, are also widely available at good prices. While many foreign-brand food products are available in bigger Panamanian cities, they are generally pretty expensive. You are better off sticking to local-brand alternatives, especially if you are on a budget. Careful shoppers who commit to eating regularly at home should have no trouble at all keeping the fridge and pantry stocked with tasty food at a cost of $200 to $300 per month. International Living magazine suggests a budget of $400 to $500, which would include both food and general household items.

Many expatriates drink tap water without trouble in Panama. Water in virtually all sizable cities in the country is generally considered safe. That said, the U.S. Centers for Disease Control and Prevention recommends avoiding tap water in Panama entirely. If you want to follow this advice, bottled water is widely available in the country at less than $1.50 for a 1.5-liter bottle.

If you are generally frugal, a $1,000 monthly budget should leave plenty of room for dining out on occasion. Cheap restaurants and food-cart style eating is easy to find in many neighborhoods. Numbeo.com data suggests a cheap meal at a local restaurant should cost about $4.50-$20. A three-course meal at a middle-range restaurant costs around $45 for two people, not including alcoholic beverages. A pint of local beer costs about $2 at a restaurant, while a 12-ounce import is around $3. Beer prices are lower at grocery stores.

Health Care

Health care in Panama is exceptional in most large cities and much cheaper than equivalent care in the United States. Hospitals and clinics in cities across the country feature modern medical equipment and internationally trained medical professionals. International Living magazine reports that a visit to a general practitioner in Panama costs as little as $5. Visits with specialists and medical tests and treatments are also much cheaper than equivalent services in the United States, amounting to a big financial benefit for expatriates in the country.

Given the affordability of medical care in Panama, some healthy expatriates choose to pay for care out of pocket. On the other hand, private insurance is available to expatriate residents at prices far below similar policies in the U.S. Uninsured retirees in Panama’s Pensionado program enjoy a 20% discount on doctor bills and a 15% discount on hospital services. All participants in the Pensionado program get 15% off dental and eye exams, and 10% off all prescription medicines.

Other Costs

Cleaning products, personal hygiene products, household items and the like are generally inexpensive in Panama if you opt for locally produced brands. Other possible expenses in this area might include cosmetic products, contact lenses, clothes, souvenirs and interior decorating items. Most expatriates should be able to cover personal and household expenses for under $100 per month, though this part of the budget can easily grow larger.

Most sizable cities in Panama have a public bus system. Buses cost around 25 cents to 50 cents per ride. Smaller towns generally have some form of cheap, regular public transportation available. Taxi prices vary. Outside of Panama City, a taxi ride within the central districts of a city is typically no more than $3. International Living quotes a fixed price of $1.50 for a taxi in the city of Boquete.

Entertainment costs vary widely. Retirees in the Pensionado program are entitled to significant discounts on some types of entertainment. Discounts include a 50% break on movie theater tickets and cultural and sporting events. Domestic travel discounts include 25% off airfare and 30% off intercity bus service. Hotels are 30% off on the weekends and 50% off from Monday through Thursday.

The Bottom Line

A $1,000 monthly budget in Panama might look something like $300 for rent; $150 for utilities, broadband Internet and cell phone service; $200 for groceries; $40 for local transportation; and $100 for personal and household expenses. You can use some of the remaining $210 to create an emergency fund, pay for medical expenses or buy health insurance. Whatever is left is available for spending on dining out and entertainment, cable television service or travel.

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