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I’m a 40 year-old British expat working as an IT Sales Manager, living in Dubai.
I earn a total of £259,653 a year. This is made up of a salary of 1,100,000 Dirhams (£243,813 – all examples given here are in today’s exchange rate), including an annual housing allowance of around £44,293, and an annual car allowance of around £11,952. Also included in that the total is £15,840 per year after management fees for a flat I own and rent out in the UK.
In my savings account right now I have £314,678.78. £232,673.80 of this is in my SIPP pension, and the rest is in 2 regular online savings accounts, one earning 0.35% interest and the other 0.20%. I spread across 2 accounts as it’s safer this way. I’m also now mortgage free on my flat which cost £454,950.
I’ve saved this much money in 3 ways. Firstly, I started a pension early aged 18. It was just £50 a month at the time, but it got me in to the savings habit. My dad was my financial mentor when I was younger (mostly by telling me to turn the heating down!). Secondly I don’t have children. Whilst I don’t advocate being single forever or banning childbirth just for a bigger bank balance, I do respect the fact this is a significant cost most people my age carry which I’ve avoided in life so far. Thirdly and most importantly, I’m very career focused. I left school at 15 and worked every day since with no gaps. I’ve been in IT sales for 20 years now, which doesn’t need qualifications but pays well. But to really accelerate my earnings I took the plunge and moved to Dubai in Jan 2018 and that changed everything. Moving abroad was never on my wish list, I miss the UK, my friends and family every day, but 1 year here is 5 years’ salary in the UK due to a number of factors in my favour such as no tax and a good exchange rate due to Brexit (sorry!). For me this is a 2-3 year plan and I’m already looking forward to returning to the UK with an excellent savings pot. Without moving to Dubai and generally climbing the corporate greasy pole I would never have savings like this. Being nice to people in the office, saying yes to all the extra workload, and never turning down an opportunity was the best savings plan I could have – much better than only buying 4 beers instead of 5, or sharing a taxi. They say being a “yes” man never pays, but it worked for me!
I’m currently saving for a career change. I love the idea of quitting the rat race and doing a low pressure job in about 5 years. Maybe I can find a career I love which might require me to train full time for a while and my savings can fund this. Ultimately I’m saving to be comfortable later in life, and to have a family with good finances behind me.
The main way I save is by moving most of my salary to my savings account on payday, I don’t let it stay in my current account for any more than 24 hours. I’ve worked out the minimum I can happily live on in Dubai (around £1,300 a month) and move the rest out, a monthly ritual that never gets missed. However it means that I drain my current account so low on payday that for the rest of the month I’m living to a strict daily budget with no wiggle room. Almost definitely I can’t afford to go out every weekend, I shop in the cheap supermarkets, I park for free and walk a bit further in 40 degrees heat, I haven’t bought any clothes in almost a year, I switch off electrics I don’t use, I ration water, I rent a car as its cheaper than buying, I live in a very modest 1 bed flat that’s a bit shabby, I didn’t even bother buying curtains for the lounge, I often buy McDonalds at lunch as its more delicious, sorry, I mean it’s cheap, and I agonise over any presents for myself. For example I picked up an item 3 times today before deciding not to buy it, and it was only a pack of Jaffa Cakes. This slight OCD is my way of saving, I just hope when I get older at some point I learn to enjoy my money a bit more, or else my entire career-long experiment will be a complete waste of time. Some people may think Dubai is not the place to be disciplined with money, but I’m here to say they are wrong! I spend less here that I did in the UK and I reckon I could trim it down even further. There are so many expats in Dubai I know who have been here 5+ years and have no money left at all, or are in debt when on good tax free salaries – I just don’t get it.
I struggle with saving, because the money I have saved is not particularly well managed. I’m earning low interest, and am too nervous to plough the cash savings in to an investment fund in case it loses value. I’ve haven’t put any money in to my pension for almost 2 years since moving to Dubai, which is also a bit silly, but my focus was initially paying off the mortgage. I do have big occasional splurges though, for example when I come back to the UK to visit 3 times a year, I take my nieces and nephews on a huge shopping spree, and I like travelling too, for example I did Japan earlier this year and stop counting what I was spending. A few weeks ago I also bought some Jaffa Cakes.
Apartment rent in Dubai is paid annually, bi-annually or if you’re lucky, quarterly. Rent prices are adjusted accordingly. I pay bi-annual and take the money from my housing allowance which all gets paid to me on 1st January. The rent is £7,198 twice a year. Incredibly the excess, around £29,600 - is mine, and I send it straight back to savings. I could blow the lot and rent a stupidly big villa and have a live-in maid like every other expat seems to do here, but what’s the point?
Gym membership is paid annually and costs £913 a year. I didn’t upgrade to “platinum” because all I’d get for £120 a year extra would be a towel and use of the pool. I can’t swim, and I can bring my own towel! Another small savings victory.
£533.12 car rental for an Audi A3, includes insurance and servicing.
£93.82 Water / Electricity (called DEWA)
£12 subscription for internet VPN
£31 for haircut including £5 tip
£39.87 petrol (I fill up twice a month and petrol is cheap)
Approx. £248 on food and groceries
£101 TV / internet (it’s expensive here – this is the basic package).
Approx £7 a day for lunch
Car washing - £14 (£7 twice a month)
Other social / unplanned – approx. £80
TOTAL £1,292.81
I drove to the mall 10 minutes away at lunch and parked in the free car park. Lunch was a salad from the Waitrose deli counter and a banana fruit smoothie, it cost £5.18.
I paid £93.82 for my monthly water / electricity bill.
I paid a colleague £44.28 for a birthday cake and cookies for an office celebration as his wife makes them at home.
Finally I bought a 71p packet of sweet chilli Doritos. Dinner was from the freezer so no cost there.
I bought a turkey and coleslaw sandwich and banana smoothie from Waitrose for £5.26.
For dinner I bought a pizza and 2 pints of milk from my local supermarket for £5.15.
£12 was taken for my monthly internet VPN subscription.
Lunch was a tuna and cheese sandwich and bottle of lemon and lime water which cost £8.20
After work I went to Waitrose and bought cheese, mince, rice and chicken for £13.75
Lunch was a 6 nugget meal from McDonalds for £4.23
I had a Whopper meal for £5.97.
I bought a throw for the lounge, this was £13.06
I bought some dishwasher tablets and floor cleaner from Spinney’s supermarket, this was £9.96
Finally I got the car washed and pushed the boat out and upgraded to “xtreme” – this was £11.62. What a con though, I realised afterwards that a clean car is a clean car, how can paying less make your car less clean, so next time I’ll pay less and downgrade to “tri-foam”.
I bought my dad an exercise band as a present, this was £4.41
Some aromatherapy oils were bought at £5.52
Lunch was a foodcourt-type Chinese for £9.50
2 novelty pens and a small toy figure as presents for my niece were £16.78
A pack of 20 ibuprofen from the pharmacy was £3.64
Finally my main weekly food shop in a supermarket called Spinney’s. Some things are very expensive here – included in my trolley was a box of blueberry wheat breakfast cereal which alone was £6.62, and understandably in a Muslim country pork is very expensive – 2 belly slices were £8.83. Total bill was £59.01
I had breakfast at home, so no money spent there.
Lunch was a Starbucks sandwich and orange juice which cost £8.77
Later in the day I bought a millionaire shortbread from Costa to prepare me for the gym – this was £3.48
We’re really not convinced you need any advice. Maybe quit that job sooner rather than later, and write a book about your financial philosophy?
Terrifying levels of spending self-control? In all seriousness, we’re scraping the barrel here!
It sounds like this career change is really playing on your mind, but we’re struggling to see how your current spending is helping you choose which direction to go in. Spending time and money on activities that might help you discover your new passion feels like a good call. We’ve heard there’s a snow centre out there in Dubai.
You think carefully about the value of any potential purchase that comes your way, and that’s brilliant.
For anyone reading: picking up an item and putting it down again three times before deciding whether to buy it is somewhat extreme. However, walking away from a potential purchase and giving yourself space to mull it over before you commit can reduce mindless spending.
We also love how thoughtful you are with the gifts you buy for your family and colleagues - this feels like money well spent. Keep it up!
You’ve got your sights set on that career change a few years down the line, but there really is no time like the present. On that note, maybe start buying yourself some presents too?
Probably not the words you want to read at the moment. That’s because the big old system your credit currently falls under is pretty important, and pretty unfair. Either that or you have no clue why you should even care about your credit score so this seemed boring. Let’s tackle both.
If there’s anyone who can tell us where to find the light when it comes to the pandemic and our money, it’s The Penny Pal. Here’s a wrap up of this year’s learnings so far and how we take ‘em and move forward.
