One of the most common questions people ask about moving overseas is ‘how much money will I need?’ That is something no one can answer for you. I do not know your financial situation, your comfort level, your lifestyle… there are too many variables. What we can do is give you some general guidelines. I know my comfort level; I cannot tell you what your comfort level is. Generally you have as much as you have, and that is what you spend. When I first arrived I had about $850 USD a month. At 42 pesos to the dollar (2013) that gave me a whopping p35,000 a month. That is extremely low for a foreigner, but squarely in the middle class in the Philippines.
If you have operated on a household budget in the US, you will find some of the percentages are not the same here (I cannot speak for other Western countries). Most US budget recommendations I have seen, say 25-35% for housing, 10-15% for food, and 5-10% for utilities. I have found that housing is lower, food & utilities are higher. Housing can be more like 20%, food 20%, and utilities 10% minimum (especially electric). Your mileage may vary. Budgeting is a very personal thing. No one can tell you what you want/need to be comfortable.
A Spreadsheet to Help You Plan
I have a very nice spreadsheet that I did not write. I do not remember where I got it, but it was free – so I will give it to you for free. It may have come from a budget forum or an expat forum most likely. This spreadsheet is pretty cool because you set your minimum budget, and the percentages, then it fills in the amounts, and shows different budget amounts. The increment increase in budget amounts is also set by you. Let me add pictures to help explain.
The ‘recurring total’ and the ‘increment’ are easy to edit. In this example I set the low amount to 30,000 (recurring), and you can see each column goes up by 10,000 (increment). On the next picture I changed the recurring amount to 50,000 – thus setting the low end to 50,000. You can adjust the increment amount if you need to. As you change these 2 values, all the amounts on the spreadsheet adjust accordingly. This gives a nice view of various budget amounts.
Next you see the percentages. As you adjust the percentages if the total is under 100% you will see the amount of money left to be budgeted. If you go over 100% you will see how much needs to be trimmed from the budget.
There are some glaring omissions from the budget, particularly insurance and visa fees. Those are not really adjustable. If you have p30k a month or p200k a month, your visa fees are the same. Insurance will depend on your age & health more than your monthly income. Categories like transportation and groceries may not scale, but can depending on your desires. With less money you may eat less foreigner food, and take the jeepney more. If you have more money you can buy imported food and take more taxis or buy a car. Up to you.
It is still a pretty good spreadsheet, and easy to edit if you know anything about Excel. For my budget I added different expenses, and added a couple extra lines (the formulas automatically populate).
There are many categories you may or may not need:
- Charitable giving
- Debt repayment
- Spousal or child support payments
- Out of pocket healthcare costs
- Other child-related expenses (such as diapers, extracurricular activities, school supplies)
- Saving for irregular expenses (such as Phil Health or annual property taxes)
Can you live in a bamboo/nipa house? Maybe a small Filipino style apartment? Big Western style house? All of those are available. It is up to you to determine what comfort level you need, and how much you want to spend. If you require Western standards, you can get it. Western standards here will cost you more than in the West. If I “needed” Western standards, I would have stayed in the West.
A 2 Bedroom Apartment In The City
As I have said before, we built our house, and spent cash on it. So we have no rent, no mortgage. That makes my budget much different than most already. But in the city we had a 2 bedroom apartment for p6,500 a month. At the time that was $155 USD. The apartment was a basic Filipino style apartment, with decent sized rooms. Nothing fancy, no pool, no gym. I know someone paying p20k for a condo right now (about $400). Nice condo with a pool. Around Iloilo you can easily find a house for p10k-p15k a month. You can of course spend more if you wish. You could spend less, but I am unsure what you would get. As with many things here – up to you.
The apartment rent was p6,500 a month. We had an aircon that we ran at night, so the electricity was about p3,500 a month. Groceries went up to p10,000 a month (but the meat quality was better). Taxis were more common. We traveled less distance, but paid more to ride in comfort. Living in the city does add more expenses. Being in the city we tended to go out more. There were more trips to the mall, more movies, or just hanging out. When I am not at the house, I am usually spending money somewhere. So the budget took a bigger hit than just an increase in rent.
Under $1,000 A Month?
When we were paying the apartment rent our budget was only $850 a month. I was comfortable with it, but would not recommend it, without knowing you personally. I had p35,000 a month to spend, and that is what we spent. I told people that it can be done on less than $1,000 a month, but I would recommend $1,200-$1,500. Now, many years later, I do have more, and I am more comfortable. The point is that it can be done. I know guys that spend their entire $4,000 a month retirement. I was a single father in Texas and did not spend $4,000 a month. I cannot imagine spending that much here. There are plenty of guys that do spend that much – and are happy with it. More power to them. Remember – up to you ha ha
After I retired, last year I increased our budget, but we still spend only $1,000 a month. We are considering moving back to the city, and the budget may go up to $1,200 a month. Rent would be the main difference, and I would happily go back to an apartment like we had before. Our actual bills each month are groceries, cell phones, home internet, and electricity. That pretty much covers life here. It is a much simpler budget than back in the old country. Most of our budget is pocket money. We call it different things (like transportation, dining out etc), but that is just pocket money.
Your comfort level will determine your desired budget. Generally we spend most (or all) of what we get every month. Well, most people I know do. Make sure you have the means to get cash easily here. Credit cards are accepted at some stores, but this is still largely a cash based society.
Some Philippine Budget Guidelines
As I said, I cannot tell you what will be comfortable for you. So, I can give some guidelines:
Our basic apartment was only p6,500 a month. Not bad for a decent sized 2 bedroom apartment. There were few amenities, but it was nice enough. For p10,000 – p15,000 you can get a small house, or a nice apartment. Some of the condos are upwards to p20,000 – p30,000. You can really change your budget drastically by where you decide to live.
For around p3,000 a month you can run your aircon during the night, and have your fans, computer etc on as much as needed. If you want to run the aircon 24/7 you will spend around p5,000 or p6,000 a month. This is for one window unit. If you want to air condition your whole house, it will of course cost more.
Groceries are another big ticket item that you have a lot of control over. For around p6,000 a month you will eat a lot of local food, and a little imported food (or better quality meat). Around p10,000 a month and you can eat pretty well. You can have lots of imported food, much better quality meat, and plenty of fresh veggies. If you like fish and rice, you can eat pretty cheap. My diet is mostly pork and veggies, so it cost a bit more.
Cell Phone/Home Internet
Basic home internet will run around p1,500 a month. The amount of data and the speed will rely on your location. I pay the same amount now for 150 Gb @ 5Mbps as I paid, in the city, for 50 Gb @ 2Mbps. The price stayed the same, the offered service got better.
Cell phones can vary a lot depending on your needs. When I first arrived my wife and I would just buy loads as needed and rarely spent p500 a month for 2 phones. I got tired of not having the internet – after all what good is a smart phone with no connectivity. So we got post-paid plans at a set price. For p1,200 a month you can get a free phone (about p10,000 phone), with unli calls & text, and 7 Gb of bandwidth. Buying load as you need it is cheaper but I like the convenience of having a full time data plan.
Enjoy Your Golden Years
Make a budget that is realistic, and comfortable. I am enjoying my retirement, and not worried about saving much. As I said, most of our budget is just ‘fun money’, but we still spend barely $1,000 a month. It really is not hard to do. I would recommend $1,200 – $1,500 (USD) a month. Feel free to spend as much as you want, though.
I know how much comes in every month, and plan accordingly. Of course you will want some savings for emergencies, but no reason to be a miser during your golden years. That is why they call them the golden years – time to spend that gold!