Future - Proof Your Finances

Expat finance is a complicated matter and for too many families here in the UAE, the lie of the land only becomes clear when they run into difficulties. Independent financial advisor Keren Bobker outlines her top ten economic errors and explains how to avoid them.

- Keren Bobker 

01 Living beyond your means

Living in the UAE can feel a bit like being on holiday year round, especially in the first year. It can be tempting to live in a large villa in a smart area, to drive a brand new top of the range car and to go to every event whilst brunching each weekend, but these things are expensive and not realistically affordable for most people.

It is far better to avoid the bad habit of overspending from the outset, especially when the consequences of bad debt are severe. Of course you want to have fun, but it is best to work out a monthly budget and allocate money to the luxuries only once you have paid for the necessities. That way you can have a good time without the guilt, or any negative repercussions.

02 Not planning for bad times 

Life can appear to be wonderful here but it only takes one thing to go wrong for things to collapse around your ears. Do you know what you would do if faced with an unexpected redundancy, an illness or a major problem with family back home? With no welfare system in the UAE, and with the right to reside here linked to employment, it is especially important that everyone makes provision for themselves.

The first step is to build up an emergency cash fund. Ideally this should be sufficient to cover at least three to six months’ outgoings. As UAE bank accounts are frozen when a job ends, or in the event of death, it is best that these monies are kept outside of the country. An offshore bank account is ideal.

Anyone with dependents also needs to have adequate life insurance, just in case the worst happens. If you arranged this in a home country you need to check that this is still valid.

03 Breaking financial ties with your home country