How To Avoid Getting Into Debt In Dubai

How to avoid running into the UAE’s tempting debt trap.

Newly arrived expats in Dubai have a choice – to manage their generous salaries or live up to the luxurious lifestyle by borrowing. Credit is easily obtained, and those not used to grabbing everything they’ve been promised can easily fall into excessive borrowing via easy payment plans, mortgages, car finance and a wallet full of credit cards. A lack of money management skills sends expats into the spiral of more borrowing in order to pay off outstanding loans and other debts as well as keeping up with the Dubai lifestyle. It’s all about chasing the dream inherent in this lifestyle, whether it’s affordable on an average salary or not.

New expat arrivals feel the need to fit in, with salaries far higher than their earnings in the home country but often not high enough to get an upscale apartment, the latest new car and the must-have designer goodies which label their owners as part of that Dubai dream. Borrowing is easy, giving an entry into a world of luxury at least until the first repayments are due. At that point, another credit card usually does the trick, with the minimal repayments made every month, and loans from financial institutions take the place of bank loans if the salary isn’t enough. Payday isn’t any fun when almost all of the salary goes on paying off debts.

The answer, of course, is to manage your money from square one, allocating living expenses, savings and repayments where necessary. If you’re in a financial mess, getting out is hard but not impossible, with living within your means the only answer. Renting an affordable home, even if it isn’t as luxurious as you’d expected, tending to your needs rather than your wants and staying away from borrowing as well as offers and deals is the way forward for new expat arrivals whose initial intention was to further their careers by taking an overseas relocation.