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How not to leave Dubai with no savings
| Published: | 2 Jan at 6 PM |
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Many expat workers in Dubai earn good salaries and have useful packages helping them save, but equally as many leave after their contracts end with little to show for the experience.
Expats in Dubai are trading their present lifestyles for a future financial disaster when their contracts run out, due to getting caught in the culture of spending in the emirate. Many arrive with dreams of getting rich, but leave with nothing but their memories of a temporary high life.
Experts are now advising against the urge to upgrade everything from the car to the villa just because it’s the thing to do. One unmarried European expat who has worked in Dubai for seven years is now saddled with huge debts on five credit cards as well as an expensive car loan.
Rent, bills and food take up most of his salary, leaving him nothing to save against his return to his home country. Others have family commitments such as education for their children, leaving little or nothing for emergencies, let alone savings.
The old saying of cutting one's coat according to the available cloth applies as much in Dubai as in expat home countries, and keeping up with colleagues in order to save face is a bad idea anywhere. The UAE government is considering setting up an expat pension fund guaranteeing that those leaving their jobs receive their end-of-service benefits rather than having the banks seize them to cover any debts.
Financial experts in the emirate are in favour of the idea, as they feel it would protect older expats during their retirement years. Most expats, they admit, are reluctant to downsize their lifestyles, but should be saving at least 10 per cent of their annual salaries as a backup.
Expats in Dubai are trading their present lifestyles for a future financial disaster when their contracts run out, due to getting caught in the culture of spending in the emirate. Many arrive with dreams of getting rich, but leave with nothing but their memories of a temporary high life.
Experts are now advising against the urge to upgrade everything from the car to the villa just because it’s the thing to do. One unmarried European expat who has worked in Dubai for seven years is now saddled with huge debts on five credit cards as well as an expensive car loan.
Rent, bills and food take up most of his salary, leaving him nothing to save against his return to his home country. Others have family commitments such as education for their children, leaving little or nothing for emergencies, let alone savings.
The old saying of cutting one's coat according to the available cloth applies as much in Dubai as in expat home countries, and keeping up with colleagues in order to save face is a bad idea anywhere. The UAE government is considering setting up an expat pension fund guaranteeing that those leaving their jobs receive their end-of-service benefits rather than having the banks seize them to cover any debts.
Financial experts in the emirate are in favour of the idea, as they feel it would protect older expats during their retirement years. Most expats, they admit, are reluctant to downsize their lifestyles, but should be saving at least 10 per cent of their annual salaries as a backup.
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