I recommend using the pistol with silencer, the enemies you shoot don't get alarmed unless you go into their line of sight, so you can just kill them from far away, one at a time.
After you kill the boss in evenhelm (the town) there is a blacksmith on the road that you need a letter to pass, DO NOT buy from the first blacksmith that you see, there is another one immediately after, on the next screen, who has better stuff. Save your money for that guy. Otherwise you won't have enough to get anything decent.