American expats already earning high salaries in the United Arab Emirates (UAE) and other countries in the Middle East can expect an even better deal in 2014. For according to a major survey, private sector salaries are set to rise at a much faster pace this year compared to last.
That’s the good news. But how many expats as a consequence are likely to return home with bank accounts stuffed full of cash? Not that many, it would seem. Enjoying the low-tax high-spending lifestyle, and acquiring personal loans and credit cards along the way, often proves way too much of a temptation, even for the most level-headed.
Think five-year plan
So says Jessica Cook, writing in online news website Emirates247.com. Many expats start out with a five-year plan, aiming to accumulate as much wealth as possible over the time period. The sad truth is that thousands of expats have dreams of making big pots of cash, only to end up totally broke with hardly any savings, after years spent living the high life. So how do you make sure you avoid a similar fate?
Get into the savings habit from the moment you arrive. A good rule of thumb, advises Cook, is to put by 10 to 20% of your salary – and budget for it. Treat it as a monthly out-going in exactly the same way you would the mortgage payment.
And she adds, “Think twice before you upgrade your car or your villa in the sun and make sure that you are regularly putting money away. It is advisable to always keep at least three months of salary readily available in a cash account. Anything over and above this should be considered medium to long-term savings. Ask yourself: What am I saving for? Then set yourself an achievable target over this five-year period.”
Popular expat destinations
According to the website ExpatArrivals.com, the most popular expat destinations in the Middle East all belong to the Gulf Cooperation Council (GCC). Of these countries, Saudi Arabia is the most popular; followed by (in order) the United Arab Emirates (containing both Dubai and Abu Dhabi), Kuwait, Qatar, Oman and Bahrain.
As an indication of why these countries are so popular, says the website, consider the following statistics:
98% of expats in Saudi Arabia claim they have more disposable income than they ever did back home; while 94% say the same thing about Qatar and 87% of the UAE.
92% of expats in Qatar say they save more money at the end of every month than they did back home; while expats in Saudi Arabia (89%), Bahrain (88%) and the UAE (80%) are in strong agreement with this idea.
94% of expats in the UAE say they pay less tax than in their country of origin – and the figure is above 85% for all the other GCC nations as well.
Expected salary increases
GulfTalent’s latest survey of 800 employers and 34,000 professionals, which includes 60 interviews with executives and HR professionals, says employees in Oman can look forward to an average pay increase of 8% in 2014.
Employees in Saudi Arabia are expected to enjoy the second highest rate with a projected average increase of 6.8 %, followed by Qatar at 6.7% and the UAE at 5.9%. Kuwait and Bahrain are forecast to have the region’s lowest salary increases – at 5.8% and 3.9% respectively.
Further information is available in GulfTalent’s 2014 edition of “Employment and Salary Trends in the Gulf”. Check out the report here.