Mexico is an affordable alternative to the high American cost of living.
The very cheapest warm places to live are no longer in the United States, but rather in Central America, parts of Asia and Mexico. Warmer still are certain locations in the Middle East or along the coastal areas of African nations like Somalia, though the trade off for temperature can be generalized anarchy and a greatly reduced quality of life. Focus on places where you have no need to fear for your life.
United States
Gaudy, warm American locales like Florida and southern California cannot be called cheap by any stretch of the imagination. If you're looking to stay within the confines of the United States and find a place that's cheap and warm, your best bets would be southern Georgia, Alabama, Mississippi or Louisiana, all areas in the deep south that are substantially cheaper than Florida. South Texas inland from the coast also has a nice temperature and comparatively low living costs.
Central America
For good reason, Central American countries like Costa Rica, Nicaragua and Belize have been drawing Americans south for decades. Improved political stability and infrastructure improvements have combined with great weather and extremely low costs of living appeal to expatriates the world over. For example, housing in the cosmopolitan Costa Rican city of San Jose only costs about $500 monthly. Move farther out into the countryside and that drops to about $250. Dining out runs about $5 for a full meal. Travelers will find these kinds of prices all over Central America.
Asia
For low prices and beautifully warm weather, Asia offers Thailand and Cambodia, both offering the chance to live on about $500 monthly. While many Asian nations offer a friendly population, westerners considering a move to a place like Cambodia should familiarize themselves with the bloody history of genocide -- Pol Pot and the Khmer Rouge -- and poverty. Most people there are extremely poor and have a life experience almost unbelievable by American standards. Take care not to flaunt what you have.
Mexico
With the rush to Central America in full swing, Mexico sometimes receives short shrift as an affordable alternative to high U.S. prices. The weather is great, it's close and it's still quite affordable. For example, a 20-mile taxi ride that might cost $100 in Miami goes for about $20 in Guadalajara. If you don't insist on being directly on the beach, housing and food costs are still close to what you'd pay in expatriate havens like Costa Rica.
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