Expat New Year resolutions should include a savings plan

If you’re celebrating a new job in a new country this New Year or you’re determined to save rather than spend, spend, spend, you’ll need to cultivate financial discipline!

Along with losing weight, getting fit and stopping smoking, getting to grips with your finances is one of the hardest New Year resolutions to keep, especially if you’ve relocated to the UAE, Singapore, Tokyo or another capital in the top ten most expensive expat hubs. Earning multiple times your salary in the home country is magic, but spending every last penny on lifestyle and consumables without a thought for your future isn’t such a great idea.

‘Building wealth’ was last year’s buzzword, spoken or written mostly on behalf of those who’re building their own by using a well-honed script to sell financial products to newly-arrived expatriates. However, saving can be as simple as squirreling away a regular monthly amount against emergencies, knowing it’s still your cash and can be used if absolutely necessary. If you’re in a locked-in savings plan, it’ll cost you far more than you’ve paid in during a single year to get your hands on means of payment if an emergency strikes.

Keeping your expenses to a realistic minimum and targeting your monthly savings goal means you can put by a designated amount each month and feel good about it. It’s easy to split out your spends into sectors such as 5 per cent for utilities, 7 per cent for transportation, 20 per cent for housing, 10 per cent for food and another 10 per cent for education, allowing, say, 15 per cent for savings. Once you’ve created your savings plan around your lifestyle needs and emergency savings, it’s easy to monitor.

For many expats, the word ‘budget’ is anathema, but the reality is that having one means you’re in charge of where your money goes rather than wondering where it went. Once you’ve adequate emergency contingency funds under your belt, you could consider taking on an investment, but you’ll need to remember certain rules. First and foremost, never, ever invest in anything you don’t totally understand, no matter how tempting it seems. Wherever expats gather, sharks are found on land as well as in the waters, and it’s your financial future that’s at stake. Educating yourself about investment is the best way forward, and diversifying between the various available options including property ensures your risks are kept to a minimum.