New UAE expats urged to take finances seriously

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New expats in the UAE are being urged to organise their finances as a priority, and to not be swayed by the prospects of a more luxurious lifestyle.

According to an advisory put out by financial advisor Guardian Wealth Management, the UAE often sees an influx of new expats around September. The company said that these new residents of the country should ensure they start saving straight away.

“Regardless of the prime opportunity being an expat in the UAE presents and the positive intentions when people first arrive, we have found that in practice the reality is much different. Yes, people are earning more, but the temptations of a more luxurious lifestyle are seeming to outweigh the prospects for a better future,” said Hamzah Shalchi, regional manager of Guardian Wealth Management.

“Therefore we are urging expats, and particularly newly arrived expats, to make saving a priority and have outlined a number of personal finance tips that can get them started”.

The company put out a number of tips that should help new expats stay in control of their finances. Firstly, it said that setting financial goals and structuring early would be of great benefit.

“Saving can often be a daunting task and it can be hard to prioritise what is the most essential. Retirement, property, kids’ education – they are all important and need to be contributed to. The idea is for savers to do solid calculations based on incomings and outgoings and come up with an achievable savings contribution each month that can be adhered to,” Guardian said.

Secondly, the firm advised making the most of pensions. When many expats move abroad they continue to pay into pension funds in their home countries, meaning they are eligible to pay income tax on the fund once they move back home. There are a number of tax-efficient savings vehicles on offer and international workers should consider transferring their pension into Qualifying Recognised Organised Pension Schemes (QROPS) under professional advice to receive benefits such as increased lump sums and greater investment freedom, the company said.

Thirdly, new expats should look at long-term investments, Guardian said.

“One of the key rules of investing is not timing in the market but time in the market. Savers should be thinking of their investment goals long term as the longer an investment is held, the greater the probability of receiving desired returns. A loss is not a loss until it is sold at a reduced rate,” the company advised.

Finally, Guardian advised on taking out death and critical illness cover, which it described as “essential to an expat”. This sort of coverage will protect families in the event of a tragic accident.

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