New York may be the city that never sleeps and Paris may be the city of lights, but Dubai residents know that we live in the city of unrivaled glitz and glamour.
Dubai provides expats with fantastic opportunities to earn a great salary and for a comfortable lifestyle that’s hard to match.
Check: How much Expats in UAE know about their finances
But, with all the incredible benefits of living in Dubai, it can be easy to forget that there are many common financial pitfalls that you should try to avoid. Here are 6 important money mistakes to keep in mind…
Overspending without a Budget
There are unlimited ways to splash your cash while living in Dubai. As a single, you may be spending on brunches, days at the spa and long weekend travel expeditions. As a family, you may be shelling out cash for education, fun kids activities and a bigger house. Either way, having a budget is critical, as it’s way too easy to overspend without one.
Spending to Impress Others
Remember, even if your neighbor brings home a new Ferrari, you don’t have to go out and buy a Lamborghini. Never be ashamed to live within your means. Real wealth isn’t flashy and it certainly isn’t paid for with debt. You should measure your wealth by the size of your assets, not the size of your (rented) house or the brand of your clothes.
Carrying a Credit Card Balance
If you’ve managed to rack up a large credit card balance then creating a debt payment plan must be a top priority. By paying only the minimum monthly payments, you are guaranteed to pay huge interest charges and carry the debt for a long time to come. Make a plan to get out of debt and commit never to fall back into that trap again.
Forgetting to Save for Retirement
Expats typically stop paying into the government-sponsored social programs in their home country, and your company may not be offering any retirement savings program. So it rests on you to be actively planning for your retirement. You should be saving as much money as possible and investing it in a diversified portfolio. This nest egg should grow over time and provide the funds you need to live well in your golden years.
Read: Why you should plan for retirement now?
Getting Caught in an Investment Scam
You’ll get countless cold calls from Financial Advisors and Wealth Managers offering to invest money on your behalf. Don’t do it. Even if the caller is from a reputable company, the fees are often so high that it’s almost impossible to earn a decent return on your money. A much better solution is to open your own brokerage account and invest in a group of low-cost ETF’s or Trackers which will grow steadily over time.
Maybe interested: Different investment options for Expats in Dubai
Forgetting that Life is About More than Money
Life isn’t printed on Dirham bills, it’s printed on our hearts and in the memories of experiences with people we love. Spend time reflecting on your values and long-term goals. What kind of life do you want to create for yourself and your family? You can create a rich and enjoyable life based on the joy of moments shared with family and friends, not on the size of your bank account.
About the author
Matthew Nobles is the Founder of Dubai Personal Finance, a mission-based social enterprise focused on improving the personal financial literacy of UAE residents. As a certified Financial Coach and Financial Advisor, Matthew guides groups and individuals to identify their values and develop portfolio investment strategies to achieve their financial goals. Matthew is a dynamic speaker, coach and educator who is passionate about empowering others to take control of their personal wealth journey.
