Splash or Stash ...
How much do you earn annualy? How much do you save every month? Do you have any mortgage back home? What do you spend most on your income? Here interesting article from gulfnews.
The expat choice to splash or stash
By Cleofe Maceda/Staff Writer
Published: January 04, 2008, 23:08
Most people are fairly interested in wealth, especially if it is potentially theirs. In fact, it's the number one reason why many expats move away from home and work in faraway places like Dubai.
Recent research by Zurich International says that the majority of expatriates come to the Middle East to build nest-eggs. And now they're also enjoying a better quality of life. So that's good news.
But here's a cause for concern: There's an alarming rise in consumer spending among expatriates.
The study shows most expats spending the extra income they earn splurging on sports cars and holidays. It says it is particularly true among Western and Arab expats.
Zurich says that, since the average length of time for expats residing in the UAE is nine years, "it is important people make adequate savings within this short timeframe [to] reap the benefits in the long term."
Okay, but with Dubai's inflation and rents shooting through the roof, and other "hidden taxes" like tolls and parking fees lurking everywhere, it can be almost impossible to save money.
Meet Dan, who earns about Dh240,000 a year. That's pretty good compared to a lowly hotel worker earning perhaps Dh12,000 a year. Yet he says he's not able to save. Aside from huge housing and car loans to pay, there's life's simple pleasures that can't just be ignored, apparently. He's got five credit cards, three laptops and three mobile phones.
Of course, it's still the same old story. If you earn Dh240,000 a year, and you spend Dh250,000, you're still going backwards financially. Dan owes a large amount of money on his mortgage for a house which will take almost the rest of his life to pay, plus a Dh150,000 debt to buy a car.
Money management
But here's another story. Pete makes about Dh120,000 a year as a graphic artist. He takes the bus to work, and buys only what he needs. He doesn't splurge or owe any bank some money. Yet in his three years in Dubai, he's managed to save enough money to build a decent house in his home country.
Of course, if Dan works for four years with a Dh240,000 annual salary and sets aside 60 per cent of it, he won't be able to build a house in his hometown in Europe. But he won't end up eyebrow-deep in debt either.
So, you either limit your spending now to enjoy a debt-free future, or bask in the good life in the present and not save enough money to even pay your kids' education when you decide to settle down.
A French dramatist, Edouard Bourdet, once said: "One must choose in life between making money and spending it. There's no time to do both." But if you did both, you might wish you hadn't
escalating rents are the major cause or concern. cars can be resold but rent once paid is lost. no matter how cleverly u spend the annual rent hikes mar ur efforts.
next in line are grocery prices which increase at regular intervals. my kitchen expenditure has almost doubled in the past few years!
so actually the percentage spent on luxuries is decreasing with necessities eating away ur income at a faster rate!
all of the above undermine the actual reason we are here: to save!
I would say, splash a little, stash a little. The major culprit is having to maintain more than one car. Another one is having a trip every year to your home country and taking gifts for your family, extended family, neighbours.....It eats into the salary.