Making The Leap And Mind Is Set, Now Have To See If Wallet Is...

[jkeenan213]

I tagged the below onto an older post of mine, thought I'd re-topic to get some current thoughts.  I worked this budget out with a lot of help (mostly from you folks).  It's at the bottom.  I know it's healthy at 68K PHP/month in expense (no rent, building a house), but if anything looks like WAY off, please let me know:

 

Here we go.  Economy set me back a bit, but pulling the trigger.  Target date June, 2016.  House is on market, liquidating all assets now.  Will be sad to see the Harley go, rest is just "stuff" that I am happy to divest of.  Sending balikbayan boxes to sister-in-law with essentials (some clothes, bit of kitchen stuff, most hand and mechanics tools, keepsakes) monthly, she will store/hold.  Working on paperwork/legal/banking for move now. It's definitely on.  Already thinking in pesos vs USD and SM vs SF, Rosetta Stone and wife are polishing my Tagalog.

 

Myself, younger (obviously) pinay wife, two wee ones under 4.  Already have property in province area near Anda, Bohol, 1800 SM on provincial road facing sea.  Building house, bahay kubo (for in-laws during construction/guests/domestic/possible rental), sari-sari/cafe (for the wife, budgeted at break-even), carport, gardens, all but store/cafe in walled complex.  Construction, permits, architect all budgeted separately.  I and father-in-law both have construction experience, my education is in engineering, I will manage, he will foreman (no kano pricing), now looking for architect.  Rent during construction (12 months est.) and vehicle purchase also budgeted separately.

 

Will have net PI income of approx. 65K/month PHP shortly after arrival (that's what makes this work), that and cash will build house and help bridge 3 yr gap to SSI at 62 (maybe later).  With wee ones, monthly SSI will be $3-4K/month USD once it kicks in.  Not touching retirement funds and US investments (principal or interest) in this budget, that's my emergency/bugout/kids college/older kids weddings.  Term life being paid out of dividends so wife/kids are set when inevitable happens hopefully decades down the line.

 

No rent but some taxes, 185 SM house with two CR (for upkeep cost estimates), kitchen inside/dirty kitchen out, debating well vs. municipal water, septic. Simple life with plenty of beer, no malls (for me at least), no Boracay, no girls, no gambling.  Remote province costs (pop. is about 45K, my barangay about 2K) , but water/cable/electricity/phone/markets all available.  But big well-built earthquake and typhoon resistant house.  Wife is province-raised, very frugal, household is 100% hers to manage (no kano pricing, again).  My monthly budget, I welcome any/all commentary on line items or in general, it's important I get this right:

 

ONGOING EXPENSE

Utilities

Electric 3,500 month

Propane 250 month

Tap water (if not well) 250 month

Internet 900 month

Cable TV 600 month

Telephone 750 month

Bottled water 500 month

Generator fuel 500 month

Garbage 200 month

Banking/Legal

Taxes 800 month

Bank fees/Legal  1300 month

Transportation

Auto expense 1,800 month

Transportation other 1,000 month

Medical 12,000 month

Travel

Travel (US) 4,500 month 1x yearly

Travel (domestic) 700 month 4x yearly

Postage/shipping 675 month

Housing

House, maintenance 1,500 month

Household 4,000 month

Domestic/driver/security 5,000 month

Groceries 14,000 month

Clothing 1,500 month

Leisure

Entertainment 4,500 month

Dining out 2,500 month

Misc 1,500 month

 

sh%ts & giggles @ 5% of ttl exp 3,236 month

 

TOTAL EXPENSE 67,961"

[Mike S]

Well I have lived here 8+ years and live on around P42,000 per month give or take and we live well but not extravagant ..... I dare say with that budget you could live just about any where you want in the Philippines ..... IMHO you should have no problem with standing any major catastrophes or health issues 

:cheersty: 

[jon1]

Not sure why you would have banking fees (unless ATM fees?). If you keep minimum deposit in your bank (typically $500 for USD account and 10,000php for Peso account) and deposit checks for your money transfers there will be zero fees from either end.

 

If you get DSL internet, the cheapest I have seen is 1000p for internet (3MB speed) and 602p for the required landline. Propane has been costing me about between 500-1000p for a 10-12 Kilo tank (depends on the fuel prices). Lately it's been around 700p and lasts for two months.

 

I have been using the 20L bottles of water for drinking/ice. (40p each) and averaging 2 per week for a household with 4 adults. My tap water bill is around 700p/mo. In the province I would recommend you get a well as most likely tap water will not be available or if so, you will have to pay to get connected and the pressure/reliability is typically low. Also look into solar powering your well pump to mitigate electric costs.

 

For your generator, come up with a maintenance plan. Don't let it just sit if you never have brown outs, fire it up monthly and check on the fuel for separation (if it sits too long). Diesel has been around 25p lately.

 

[chris49]

We get 60,000, can live on 40k. No rent in a northern province.

We have projects going on and a motorbike installment. That takes up 10k. We are supposed to save 10k butcurrently we don't. Things keep cropping up.

I have another pension which has some strings attached. Would give me usually 75k/month, but due to exchange rate fluctuations let's say 60k....another 60k. The pension is payable in Australia and I have not yet reported back.

Medical: you cite 12,000 pesos a month? Why you have maintainence meds?

Household: we don't use household help but with 2 small kids you might need someone? Commonly part time or maybe twice a week to wash the clothes.

SSI: you say 62, maybe later. You will have to get it at 62 or you are forfeiting your kids allowance for3-4 years add that up, it's a bundle.

Schooling: maybe later, maybe in HS/College you want private schooling. That's what I want, private all the way. For me that's a 26 km round trip each day, so that's what we want so we budget that. Starts in 2 years x 2 kids.

I like your plan, but I notice you budget travel. You mean you are going to USA yearly? Just you?

I'm an Aussie per my profile. I'm a US Citizen as are my kids, more familiar with the US system than the Aussie.

[jkeenan213]

Thanks, chris1 and jon!  I'll make some adjustments to the line items based on folks' comments.  Please keep them coming!

 

High BP for years, so yes meds.  I am working with my doc here on more holistic ways to control, but of course they would just rather prescribe, prescribe, prescribe.  The 12K also includes some insurance (PhilHealth) and "you never know" savings.

 

5K/month for domestic budgeted.  Probably 2X weekly cleaning, maybe a PT gardener.  Fully expect family to "appear", hence the bahay kubo/guest house.

 

Actually, I believe I can apply for SSI at 62, then immediately defer my portion to collect at higher rate later.  Kids still collect at their portion of my 62 yr old benefit, its a common trick.  But you are absolutely correct, don't want to lose that portion.  Good point.

 

Agreed on education.  Not touching my personal retirement funds in this budget, which I took out to 8 years (at which point the numbers stopped changing and flatted out).  Some good private schools and colleges in PI, if I had to send back to US for college that would be painful but doable.  But when little, barangay/town schools are OK...my wife turned out very bright, though a tad volatile.   :hystery:

 

Yes, travel to US 1X yearly just me, possibly every other if both myself and wife.  I have two older kids mid-20's, that's 2 weddings (also budgeted separately), possible grandkids, etc.  Then there is the potential for medical travel.  Point well taken, I'll up this a bit.

 

Some ATM fees, but bank fees revolve around moving money from US to PI, and investment fees for US funds which I did not levy against principal or growth.  Agreed on the check deposit scenario, but based on the bank it's sooo slow and there are typically hidden "fees" in a reduced exchange rate.  May need an occasional "oops" wire, particularly in the first 18 months when I'm building the house.  I have been successful with investing despite the economy, and though my US investments will be tagged to a US checking account it is only a wash account with small typical balance, I need the money to stay in investments as much as possible.  There is a chain (with some cost) moving money out of investment vehicles to cash to US checking to PI USD to PI PHP.  It's more of an accounting entry than a true cash expense.

 

Love the solar idea, don't mind the up front if it's money in long run (ROI 5-10 years) and/or if it adds to value of house.

 

Got the generator maintenance.  Have worked in industries and places where a no-fail (ever) startup of a generator on grid failure was critical to life support systems.  Much bigger generators, but same principal.

 

Also note that the budget I put out was for first month we are settled in, house built, etc (after transitional costs like rental while house being built)...also budgeted separately.  It then ratchets up 2.6% annually for inflation.

 

Thanks again, information is invaluable.   :cheersty:

[chris49]

Yes that does look manageable.

If family does "encroach" as they might, I have them working on little things. Inevitably they are in for food even if mostly rice at least once a day. I try to even out the expenses, that's why we don't have a helper here at home. Gina washes the clothes, but occasionally we have paid sis in law to catch up on a load of washing. Family does the garden and surroundings in joint effort. They harvest rice and we get some of it, although they probably eat most of it. I have the staples of life explained to Gina, rice is in there eg cooking oil and condiments like salt. But I took off coffee, sugar, soap, shampoo, toothpaste, all those nice things which are heavily consumed and we have to replace.

I cant prescribe meds, but generic meds are very commonly used here. How about checking with your US Dr about some generic equivalents and do a trial?

Solar, my house is much smaller than yours, but due to expand. I was quoted 200k pesos for a 2 kilowatt system, fully installed with the wiring, 7 panels on the roof. You might need more? That could wait untilyou get your SS, as with me, it's a go when we have the money. About 7 years ROI investment vs about a 25 year life span for the system. Let's say 20 years, You must be sure your roof has at least a 20 year lifespan, or you might lose the system. My installer/contractor is British. Smart man also older, he pays his local electric bill=30 pesos a month. Running everything inside the hose except up here we don't run AC. Most people don't.

Later on you contact by email the US Embassy in Manila. You may have your SS deposited directly here, it is so simple. You will have 3 accounts running. One is yours and each kid will have his own, with your wife as trustee. About $4 per month on each account is the transfer fee, and that is all.

Edited September 12, 2015 by chris49

[Steve & Myrlita]

You mentioned high blood pressure. I was on a generic Metoprolol for 7 years here and my BP was always in the 130s to 160s. Essentially not working. My doctor suspected med was either wy under strengthed or fake. He put me on name brand Neobloc. It is only P3.72 each for 50 mg. At 2x a day, my pressure is now 110s-120s. Much much cheaper than the P12k you quoted. You may want to consider.

[bows00]

no malls (for me at least), no Boracay, no girls, no gambling

Well that is the key. Add costs of bars, girls would easily double your estimates.

[sonjack2847]

You mentioned high blood pressure. I was on a generic Metoprolol for 7 years here and my BP was always in the 130s to 160s. Essentially not working. My doctor suspected med was either wy under strengthed or fake. He put me on name brand Neobloc. It is only P3.72 each for 50 mg. At 2x a day, my pressure is now 110s-120s. Much much cheaper than the P12k you quoted. You may want to consider.

For the BP try losartan they come in several doses and are about 2.5 peso each.

[jkeenan213]

Steve, thanks for the med advice, much appreciated.  I'll run it by my Doc here.  Chris, thanks for tagging a cost to the solar install, couldn't get it off a website.  I've designed the house and placement on lot to have some roof in full sun.  Would expect bulk of cost is in the PV panels, so I'll do some math.  Roof is going to be probably the largest part of construction expense so 25 years no problem. SSI deposit at embassy seems reasonable, I'll look at which of the 50 exchange rates they are using.  As to relatives...I'm funding a partnership Tatay, so he can have a much better quality of life.  There should be no need to move in (I'm no dummy), but if it happens so be it.  I'll adjust, they're family.

 

And bows00, I indeed say "no malls (for me at least), no Boracay, no girls, no gambling."  I didn't mention bars.  I'm Irish, that's where we conduct our social interactions. The beer allowance is part of the line item "sh*ts & giggles".  :hystery:

 

Keep it coming folks, I take a lot of notes.