High living standards and escaping the taxman are two of the top reasons why expats move to Dubai. There is no real income tax levied in any of the GCC states, which make these states very attractive for expats wanting to improve their personal finances. The problem with living life in the fast and expensive lane is that many expats find that their new-found income, slips through their fingers and some even leave Dubai in a worse financial situation than they arrived. So how can you avoid the overspending traps and still have a healthy bank balance? Here are some tips:
Tips for expats in Dubai
Make a budget and stick to it
Make a realistic budget and work hard at sticking to it. Dubai is filled with temptations that can make you lose sight of your long-term saving goals. Remember that 25-30% of your monthly income is likely to be absorbed by your fixed expenses like rent and utility bills.
If you add car loans and private schools into the mix, your budget could easily exceed 50% of your income. Decide on the percentage you’d like to set aside for savings and then work your budget backwards from that. In the first few years, your start-up costs might mean you have to save a little less, but if you plan to stay a few years you can start to increase your percentage of savings upwards.
Walk away from Waitrose
Waitrose and Spinneys are not the only places you can find groceries in Dubai. You can save a lot of money by shifting your fruit and vegetable shopping to places like the Union Co-Op and you can buy your fish directly from the Dubai and Sharjah ports – as it comes in straight off the boats.
Stick to one debit or credit card
The many banks in Dubai will try and entice you to take on their credit cards, but to maintain a realistic hold on your finances, it’s best to stick to just one. If the credit limit you are initially offered is not to your liking, it’s easy to shop around until you find the right rate. Ensure you pay your monthly bill on time or you could be hit with very high interest rates of around 30%!
To keep your utility bills down, consider switching off appliances when they are not in use. To help save on your bills, it’s important to know that DEWA’s electricity charges tend to get higher between 12 pm and 6 pm – so try to avoid using your appliances during this time.
Experiment in your kitchen
Dubai is famous for its many restaurants, but eating out comes at a cost that can quickly eat into your monthly budget. Rather plan to eat at home on a regular basis and only treat yourself to a meal out once a month. Try and stay away from the many (and often delicious) take-away options available – your waistline and your finances will thank you!
Hit the sales
Dubai’s sales and outlets are famous – so aim to shop past the season’s peak and maximise all the bargains on offer. If you are planning on going away somewhere cold in the December holidays – you’ll find that winter boots and coats will be half price in July or August when the temperatures are rising. Airfares also rise dramatically around June the 15th every year and stay high until September to coincide with the school holidays – so if you can, aim to travel in the off-peak periods.
If you are a South African expat living in Dubai and would like to know more about how you can maximise your finances through financial emigration, accessing your South African retirement annuity and our tailor-made tax solutions for South Africans around the world, contact FinGlobal today.