Chile's lovely, but having been there this year and living out of my vehicle, Santiago (Region Metropolitana) is anything but affordable compared with northern Argentina and Paraguay. Friends of mine there who have shared salary details and costs of living have confirmed that.
numbeo.com supports this view., at least within Santiago. Paraguayan cities are 40-50% cheaper, and northern Argentina is similar (a little higher).
Outside Santiago, it's better, but too far south and you're stuck withing rising fuel costs and rising goods costs (even food). Beyond Puerto Montt, you can consider yourself "outside of civilisation" as some Chileans I met made very clear, and which I soon found to be true.
People mention the Pacific coast and I suppose so, if you're really into the beach, but I wouldn't do the coast anywhere near Santiago, it's too populous. The Isle of Chiloe is beautiful and probably has surf spots... but depends on your capacity for living on the edges of society -- quite rural.
I went to La Serena, I didn't much enjoy the vibe there. In my eyes, it's a bit of a run-down mining town which happens to have a beach. But it's probably cheap enough to live in comfortably. Chile's northern regions are in my view not its most beautiful aspect.
Having said that, Chile south of Santiago is the most worthwhile place on the continent to be if you're serious about incredible natural beauty, buying power, and quality of life.