Ask Natasha – The importance of budgeting effectively

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As featured in Cosmopolitian Middle East.

Recently Guardian Senior Wealth Manager Natasha Maggessi spoke to Cosmopolitan Middle East answering questions about saving, spending and borrowing money.

Following on from our last blog which looked at saving for a rainy-day, this time Natasha looks at the implications of failing to budget correctly.

Help! I’ve just got a large bill to fix my car but have no savings – what’s my best option to pay for it?

As an expat with a higher disposable income, it is easier to get your dream car but very often people do not consider the extra costs. In your personal budget you should add up how much the indirect costs of owning the car, such as insurance, road tax, maintenance, fuel etc. as well as repayments on the car itself. Also, consider if you even need a car and put on paper how much it would be to use taxis/public transport versus the total cost of having a car. If you conclude it is just a luxury, don't get it, you will most probably not profit if and when you choose to re-sell.
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A properly managed rainy-day fund along with life/critical insurance is an essential contingency plan that every expat should have.

It is hard to predict everything and this is why you need emergency money. However, if you don't have a rainy-day fund, there are some options you should explore:

  • Talk to the car garage about paying in monthly instalments with post-dated cheques
  • Pay by credit card and do an instalment plan with the card company
  • Get a loan from the bank
  • If the car is not an absolute necessity, save for a couple of months and fix later
  • Ask a family member for the loan if it that is an option

If more than one of the above is an option, identify which will be the cheapest or how you can avoid paying interest.

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More about Natasha

Natasha is an experienced tax barrister and senior wealth manager who holds a masters graduate in International Economic Law (LLM) and is licensed by the Brazilian Bar Association and Chartered Institute of Securities & Investments.

With over 10 years experience across Brazil, Hong Kong and the Middle East, Natasha specialises in supporting expats with their personal financial planning, including family protection, life insurance, children's education planning and retirement planning

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