If you are an expatriate, was there a significant shift in how you dealt with the money in your life when you became one?
A recent, and recurring, chat with people regarding the value of money usually includes us talking about how the currency we were brought up with, or at least started earning in and having to pay our way with, seems to be so much more weighty, valuable and somehow real compared to a currency we relocated to and started using as expatriates.
Do you have the same emotional relationship with a 100-dirham note as with the equivalent value in the currency of your birth or wherever home is for you?
The resounding response to date has been no. It appears that the way we behave with money as expats is significantly different to our behaviour and attitude towards money and how we use it before we become expatriates. And when it comes to western expats specifically, it could be said that the value of money diminishes or the entitlement factor increases.
I must point out here that these conversations have been, mostly, with western expats. Not everyone has the same attitude towards money earned as an expat, and this can be seen in the billions of dirhams that people living here send back home every year – many people are very aware of their short stay in the UAE and want to use their time here to build up wealth back home quickly.
But not everyone.
Standard Life recently surveyed 200 western expats living in the UAE – not a very large sample, but the findings are interesting, and could reflect a wider trend.
First thing to note is that most of those surveyed became expats for financial reasons.
The second thing to take on board is that almost all of them (97 per cent) spent some of their disposable income on luxury lifestyle choices, and only a third of them seek financial advice.
Figures on their own aren't the point. It's the underlying reason or what they translate into that's important. So, what could these numbers mean?
Well, I'll offer the following:
People can feel more flush with cash in the UAE, and are all too easily enticed to do things that they would save up for or plan as a special treat back home.
Let's take a step back: we essentially live in an amazing, world-class holiday resort. We have on our doorsteps the biggest mall in the world, the tallest building, dancing fountains, restaurants and hotels galore. But. We live here. We're not on holiday here. So, while people want to come to the UAE from all corners of the globe to shop, party, relax and have a great time, how about transporting ourselves back home: would you be going to a five-star hotel every weekend for a meal? Eating out as much? Enjoying a bout of retail therapy where you actually buy luxury things quite so often (if at all!)?
Judging by every conversation I've had with people, the answer is no.
What's more, the Standard Life survey shows that western expats living in the UAE save less than their counterparts in Hong Kong and Singapore.
I'm still baffled by why this should be, and would love any insight into why this happens. Is it really down to temptation?
It would appear that lifestyle choices are a big reason for the increasing personal debt that people are dealing with here in the UAE. My platform, cashy.me, conducted a survey with YouGov Siraj of over 1,000 people living here, to get to know a bit more about their spending, saving and general money habits and issues. Almost 50 per cent of those surveyed did not have a savings plan, and the survey confirmed once again (we do it every year) that financial concerns and debt are the biggest cause of stress among those surveyed.
The good news is that 55 per cent of respondents said that they are willing to make lifestyle changes to get out of their current situation.
How wonderful! But as we all know, between the intent to do something, and then doing it, is a great leap. And then to stick to doing it and for it to become the way you live is a major challenge.
Perhaps this next bit of news might make you dedicate a bit more will power to changing your ways if you are overspending:
The UK's Foreign and Commonwealth Office (FCO) put out a warning just a few days ago with the simple message: "Don't end up as a penniless expat."
The FCO has had to deal with large numbers of British expats who plunged into financial ruin after moving overseas.
I got an email just a couple of days ago from a gentleman who counsels his fellow Indian expats who are facing major financial difficulty. He said that the problem is getting worse.
And every company that I've built up a relationship with, and that has good values, has confided that it is working alongside its employees to deal with their debt, as these companies realised it's affecting the workforce and its bottom line.
So. Let's treat our money, and therefore our lives, with a bit more respect, no matter where we live, or what currency we earn in.
Nima Abu Wardeh is the founder of the personal finance website www.cashy.me. You can contact her at nima@cashy.me
