Top 10 Financial Tips For Australian Expats in Dubai – life in Dubai can be fun and exciting however if you’re not careful the extra Dirhams’ you thought you’d have available when you moved here can soon be a figment of your imagination if you don’t manage your finances appropriately.
In this article we list our top 10 financial tips for Australian expats who not only live in Dubai, but also the United Arab Emirates as well as the Middle East.
- Budget Before You Move to Dubai – if you’re moving to Dubai (or the Middle East) your disposable income may increase as there isn’t any personal income tax so now is the time to work out how much you can save before your lifestyle adjusts to your new income level.
- Setup Multiple Accounts – the bucket strategy is a very well known way to manage your expenses whilst saving money and this is even more so for Australian expats in Dubai. A lot of bills and expenses in Dubai may have to be prepaid in advance (sometimes 3, 6, 9 or 12 months) like rent, school fees etc so you will need to put money aside for expenses in the future otherwise you will be scrambling on the day to pay these. Setup an account for your expenses, an account for your savings, an account for travel. In fact you can setup as many accounts as you like.
- Make Sure You Save – when you move overseas it is unlikely that you will be receiving payments into your Australian superannuation account. Your friends and colleagues back in Australia have 9.5% of their salary going into their superannuation account so unless your employer is making a similar payment into a company savings plan you need to make sure that you are saving at least this amount every year.
- Don’t get “drunk” on the lifestyle – the lifestyle in Dubai can be fantastic but just remember that you will need deep pockets to sustain this. Whether it is going to brunch every Friday, taking the kids to the theme parks or shopping at the best stores where possible try to limit the number of times that you are doing this every month because you will find it next to impossible to meet any savings goals if the dirhams are flying out of your wallet.
- Monitor your utility bills – with the weather extremes of Dubai your electricity and water bills can vary wildly from month to month. Whilst its a nice luxury to leave every air conditioner on in the house in summer try and turn off the a/c in rooms that you aren’t using. You will find a remarkable difference in your monthly bill.
- Never bounce a cheque – it might have been years since you last wrote a cheque but in the Middle East they take cheque writing very serious. If you write a cheque and it doesn’t clear then this is a crime in the United Arab Emirates. The punishment can be anywhere from paying a hefty fine to imprisonment.
- Shop Around for TV, Phone & Data Packages – in the past the two incumbent providers for TV, mobile phone and data plans were Etisalat and Du. With little competition Australian expats did not have a lot of choice or value when selecting packages however now with the arrival of Virgin Mobile the needle has moved to the consumer and there is more choice and options.
- Don’t Keep All Your Cash In Dubai – in Dubai and the Middle East the governing law is Sharia Law. This makes it difficult and more complicated when a Australian expat passes away as more than likely the bank accounts of the deceased will be frozen for 6 to 12 months until the courts can determine who the rightful beneficiary is which in most cases will not be the wife.
- Manage Your Australian Assets Appropriately – when you move overseas and qualify as a non-resident for tax purposes how you manage your financial assets in Australia as a expat in Dubai is completely different to how you would manage them as a Australian tax resident. Make sure you are aware of how the tax status on Australian assets changes with your non-residency status and what you may have to do differently.
- Beware of the offshore financial adviser – within a matter of weeks or months you will find that you will receive unsolicited calls from a number of firms trying to promote offshore savings schemes and bonds. They will promote themselves as financial advisers (most don’t have a suitable bachelors degree in the industry) and will throw at you the words that Australian expats enjoy hearing like tax free and offshore however what they are trying to do is to get you to sign up to a 10 year savings or insurance plan. These plans used to be sold aggressively in Australia and the UK many many years ago however these days there are far better alternatives that not only provide better returns but are far cheaper to manage. Bear in mind that whilst they may say that they specialise in providing financial advice to expats none of them specialise in providing the Australian expat tax and financial advice. More than likely they will have clients who are expats from 20 to 30 countries and their advice to you as an Australian expat will be no different to what they say to a expat from the UK or South Africa.
We hope you found our Top 10 financial tips for Australian expats in Dubai useful. Dubai is an amazing place to live and work and by taking on board some or all of our recommendations above not only will your time here be beneficial for your personal and work life but your bank balance too.
If you’d like to talk to us about how we help Australian expats in Dubai and the Middle East make the most of the financial opportunities of living overseas then please feel free to start the conversation here.