As featured in Cosmopolitian Middle East.
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.
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.
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:
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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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