When living in the Philippines, it is tempting to take a devil may care attitude towards financial management because the cost of living in the Philippines is so low. However, this is not a good strategy and may create unnecessary difficulties for you. By taking a few steps in managing your finances, living in the Philippines will be much simpler. And you will discover that the cost of living in the Philippines is very low should you decide to retire abroad in that country.

Your biggest living expense when living abroad will probably be rent. Of course, one can purchase a home outright and immediately reduce the cost of rent to zero. However, this is not recommended if you have or are just now planning to retire abroad. If you want to purchase, it is recommended that you wait at least a year and "try on" your new neighborhood to make sure it is a good fit.

While it is indeed cheaper to live abroad in the Philippines, rent is not necessarily cheaper. Depending on how you live, it could in fact be more expensive than rent in the United States. Here are a few tricks for keeping your rent low. Depending on your rental strategy the furnished rental in the image could range in cost from $300-$800 per month:

Living Abroad Trick #1: Don't rent from the internet. Internet rentals are targetting the American expatriate and tend to be overpriced. Use the internet as a general guide to figure out what the higher rents are, but look for lower priced rentals once you are in country in the papers or just by driving around.

Living Abroad Trick #2: Rent outside of the city. The closer you are to the center of the city, the higher the cost of rent will be. As you move further away from the city center, the cost of rent begins to drop for anyone living abroad.

Living Abroad Trick #3: Rent in smaller cities or towns. Rents will tend to be highest in the larger cities simply because there is more competition for prime real estate. Wealthier locals and expatriates working for their home companies will tend to drive prices up in the largest cities. By living abroad in a smaller city, rents will be much lower in smaller towns because there will be less demand and competition for property.

Living Abroad Trick #4: Rent an unfurnished unit. Landlords tend to boost rental rates to cover the wear and tear thats likely to occur to the furniture by a significant amount. You may as well be living abroad with your own furniture and managing their depreciation yourself.

Living Abroad Trick #5: Shop at local open markets to reduce food costs. When living abroad there is a tendency to want to shop at modern supermarkets. While a supermarket provides many choices, these choices carry many high costs not associated with the purchase of food itself. For example, if you purchase a chicken at an open market you are paying for the chicken and some overhead for the seller.

On the other hand, when you purchase from the supermarket, you are also paying for the rent of the market and the cost of its utlities. The price of your chicken will also include the cost of special wrapping or preparation, advertising, and the cost of labor for other workers like the cashier, stockboy, and butcher. When purchasing many products, these costs begin to add up. Living abroad will be very affordable by shopping at local markets, and going to the supermarket only for those items not found in the smaller markets.

Living Abroad Trick #6: consume local produce rather than imported goods. While you might be absolutely fond of Heinz ketchup, odds are that you will be able to find a locally produced substitute. Granted, the flavor will be a little different, but unless you are a ketchup gourmet, substitutes will do and will keep your food costs down by eliminating the cost of shipping a bottle of American ketchup to the Philippines.

Living Abroad Trick #7: do more of your own cooking. Because the cost of food is much lower, there is a tendency to want to eat out more often. Yes, odds are that the meal is much cheaper than a comparable meal in the United States, but eating out frequently begins to add up over time.

Living Abroad Trick #8: to keep your transportation costs low - take a taxi instead. Public transportation is relatively cheap in the Philippines. For destinations that are relatively nearby, use your feet and get some exercise. You can reduce your costs significantly by eliminating the need to purchase an automobile, maintain the vehicle, and provide insurance.

Living Abroad Trick #9: to keep your utility costs low - use natural gas instead of electricity. This is already the most common practice in the Philippines. Use a small refrigerator and shop more frequently, instead of stocking up and allowing your food to rot in the refrigerator when you purchase too much food. Use a timer on your air conditioning if you cool your bedroom so that it shuts off automatically. And cool only those rooms that you are the most active in rather than the entire house.

Living Abroad Trick #10: manage your entertainment costs. Because the cost of living is so low in the Philippines it is very easy to go overboard on dining out and enjoying the nightlife.

Summary: by taking a few basic steps, you should be able to live quite well on a modest budget. If you have a little money left over at the end of the month, start building an emergency nest egg. Even though life may seem idyllic in the Philippines, it is wise to plan for unanticipated emergencies. If you follow these tips, depending on you lifestyle, it should be possible to manage your expenses and live well on anywhere from $600 - $1200 a month.