I am working on a novel based in Mexico, and I am wondering if there are any strong opinions on whether or not I should put common phrases of speech in Spanish even though all characters are speaking mostly English (for the sake of the audience). It feels natural to do, for example "dios mio" or "amigo", etc., but I am wondering if it's too inconsistent or possibly distracting from the narrative flow. Thanks!
It depends, and indeed there could argue that your question could only generate opinion based answers, and should be closed, but you are brushing against a core issue, which is how to show the differences between the world where the reader lives and the world in which the story is set while maintaining readability and understandability. This is particularly visible in science fiction and fantasy and translated works. The three most contentious sub-questions revolve around names, units of measure and bilingual characters. If you want to waste an afternoon, ask me about measuring the saturn rocket in cubits, or the ten gentile pateraks.
So lets step back and look at practical considerations. To simplify let us assume that you are writing in english and targeting an audience that has a five word spanish vocabulary. (and that three of those words your editor would reject) Now, that limits us to two major scenarios, your narrator's first language is spanish or it is not. If the narrator thinks spanish, look at all your dialog as translated using the rule transcribe names, translate everything else. If your narrator is bilingual or foreign you have the harder challenge but simpler question of what would the narrator's character do.
But then you ask, what if I am writing from the third person? This only means that you probably are the narrator. How well do you speak Spanish?
I would advise against it as it's not natural and seems to force the language where it isn't forced. I generally subscribe to translator chip theory of fiction, based on the concept used in Star Trek... Basically most of the space fairing peoples have a device hidden in their ear that instantly translates a speaker's words into the listener's language... thus Picard, a French man, speaks in French, which is understood by Alaskan Ryker and Russian speaking Worf (he was raised there and learned Klingon seperatly). The audience hears the entire exchange in English (or dubbed in another language where it's spoken).
There are some exceptions to this idea... When refering to a specific word from a different language for some kind of discussion (for example, if your characters are offering a translation of the word OR the word/phrase is not a known concept... Siesta would be the best way to discuss the concept as Siesta as there isn't an English equivelent) or if the foreign language is a loan word (For example, Veni, Vidi, Vichi is a well understood Latin phrase in it's non-native English).
In real life, most people who speak two languages fluently to be conversational will not drop into their native language while speaking their second language, unless surprised enough (Most people swear in native languages... and foreign curse words are great work-arounds for English Language works to drop some cursing when you shouldn't). The other time native language is spoken in a second language environment is that most bilingual people will do math in their native language, since Math is language dependent in the strictest sense.
If anything in your work, an English speaker in Mexico is more likely to drop into Spanish than the Spanish speaking character. While they don't engage in much foerign travel, when they do, Americans do typically try to learn some local language skills in order to be polite. English is commonly taught in many non-English speaking nations... between "The Sun Never Sets" era of the Bristish Empire, The Pax America period that followed and currently shows no signs of stopping, and the fact that the internet is very commonly in English... but again, since Americans don't travel outside of the States often, they do worry about not understanding the foreign languge they are going to vacation around and will try to pick up some curtsy phrases (please, Thank-You, I'm sorry, excuse me) basic counting numbers, quick ways to order food (Cause Americans are going to eat), the ability to ask for directions with a map (and to the Bathroom). It's normally not going to be asked in the best way, but most people in tourist areas figure if they see someone asking questions in very bad local language skills, they're probably Americans and will ask if they can speak English. And most countries find it endearing enough that they bothered to try rather than take offense. In fact their are surveys out there that posit that this is one of the American Tourists' better qualities.
I think it can work very well, used judiciously. It adds color and a sense of place. I write many stories based in Mexico, and ultimately I took inspiration from Hemingway, who often included local-language (often Italian and Spanish) phrases in his works, such as A Farewell to Arms, For Whom the Bell Tolls, The Old Man and the Sea, and many short stories.
One example of this in my own work is my short story Cuervo, on my blog.
I recently completed my dissertation where the main character was German. The advice I was given was that if it was a common phrase people were likely to know, (for instance, 'Sì'), use it. If it's a less common phrase, put it into italics and translate it or explain in the next sentence. For instance if your character asks, '¿Que estas leyendo?' ('What are you reading?'), have the person they're asking reply, 'I'm reading Gone Girl,' and the audience will work out the rest.
Using the language from where your story is set helps the reader to picture the setting and can say a lot about the characters, too. You could have one character use more Spanish than the others, or one that doesn't speak any Spanish at all.
I'd say do it, but don't over do, because that can be distracting. However, it's better to use too much and cut it out than be conservative - follow your instincts on what fits, what doesn't, and what's right for your characters.