Is $20 a day actually possible?

Yes, but it is not a 'vacation'—it is a lifestyle. You will not be doing paid tours, drinking alcohol, or taking private taxis.

Which country is the most expensive?

Panama and Costa Rica are significantly more expensive; you will struggle to stay under $20/day there. Focus your budget efforts on Nicaragua and Guatemala.

How do I handle cash?

Carry a debit card that refunds ATM fees, like Charles Schwab. Always pull the maximum amount allowed to save on flat transaction fees.

Backpacking Central America on $20 a Day

To survive on $20 a day in Central America, you must stick to public 'chicken buses,' sleep exclusively in shared hostel dorms, and eat every meal from local markets or street stalls. Prioritize countries like Nicaragua, Guatemala, and Honduras, where the cost of living allows this budget to cover basic survival and minimal transit.

Master the transport. Avoid tourist shuttles entirely; they cost $20-$40 per trip. Use local 'chicken buses' (retired US school buses) which typically cost $1-$3 for a few hours of travel. Always ask a local at the bus station what the actual price is before paying the driver.
Optimize your sleep. Use Hostelworld to filter for the absolute cheapest dorm bed, usually $6-$9. If arriving in a town without a reservation, walk to find 'hospedajes' or local guesthouses which are often cheaper than online listings but require negotiation.
Eat the local way. Skip 'gringo' cafes. Eat breakfast and lunch at 'comedores' or market stalls where a 'plato del día' (rice, beans, protein, tortillas) costs $2.50-$3.50. Carry a reusable water bottle and use a SteriPen or filter to avoid buying bottled water.
Limit your movement. Transportation kills a $20/day budget. Spend at least 5-7 days in one location to minimize transit costs and negotiate weekly rates on accommodation.

Is $20 a day actually possible?: Yes, but it is not a 'vacation'—it is a lifestyle. You will not be doing paid tours, drinking alcohol, or taking private taxis.
Which country is the most expensive?: Panama and Costa Rica are significantly more expensive; you will struggle to stay under $20/day there. Focus your budget efforts on Nicaragua and Guatemala.
How do I handle cash?: Carry a debit card that refunds ATM fees, like Charles Schwab. Always pull the maximum amount allowed to save on flat transaction fees.