Should You Save or Send Financial Planning for UAE Expats

For many expats in the UAE, financial planning revolves around two big questions: should you save more or send money back home? Striking the right balance can be challenging. You want to ensure your financial security while supporting loved ones abroad. But how do you know if you’re doing it right?
In this article, we’ll explore the different aspects of financial planning for UAE expats. We'll guide you through the critical factors to consider when deciding between saving and sending money back home. The goal? Helping you make informed decisions that set you up for long-term financial success.

Understanding Your Financial Goals
The first step in financial planning is setting clear goals. Before deciding whether to save or send money, take some time to assess your financial objectives. Ask yourself:
- Short-term goals: Do you need to pay off debt, save for a holiday, or cover immediate expenses for family members back home?
- Long-term goals: Are you planning to retire early, buy property, or invest in your children’s education?
Having a clear picture of your goals will make it easier to divide your income between savings and remittances. If your primary goal is to secure your financial future in the UAE, focusing on savings might make more sense. But if supporting your family is a top priority, sending money regularly could be non-negotiable.

Evaluating Your Income and Expenses
Once your goals are set, it’s time to take a close look at your finances. Start by evaluating your income and expenses. The UAE, while tax-free, can still be expensive due to high living costs, especially in cities like Dubai and Abu Dhabi.
Here are a few key things to assess:
- Income: How much are you earning each month? Is your income stable, or does it fluctuate?
- Expenses: Are you overspending on rent, groceries, or leisure activities? Cutting down on unnecessary expenses can free up cash for both saving and sending money.
Budgeting is crucial. By creating a budget, you can determine how much disposable income you have after covering essentials like rent, utilities, and groceries. Ideally, your budget should help you strike a balance between saving and sending money abroad.

Saving for the Future: The Power of Compounding
One of the main advantages of saving is the opportunity for your money to grow. Whether through a savings account, investment funds, or retirement plans, the sooner you start saving, the better your chances of building a solid financial foundation.
For expats in the UAE, saving often takes the form of:
- Savings accounts: Many banks in the UAE offer high-interest savings accounts. Compare interest rates and account features to find the best fit for your needs.
- Investments: UAE expats can invest in global markets, property, or stocks. Investing wisely can lead to substantial returns over time.
- Retirement plans: The UAE doesn’t have a pension system for expats.
Therefore, setting up a personal retirement plan is essential.
Here’s where compounding comes into play. When you save or invest money, the interest or returns you earn also start earning interest. Over time, this snowball effect leads to exponential growth. Even small savings, if started early, can turn into a large nest egg by the time you retire.

Sending Money Home: Supporting Loved Ones
For many UAE expats, sending money back home is a big part of their financial responsibility. Whether it’s for family expenses, education fees, or medical bills, remittances are crucial for supporting loved ones. In fact, the UAE is one of the largest sources of global remittances, with billions of dirhams sent abroad each year.
But, sending money regularly can affect your ability to save for your own future. So, how do you find the right balance?
Factors to Consider When Sending Money:
- Currency exchange rates: Fluctuating exchange rates can eat into your remittance amounts. Look for services that offer the best rates and lowest fees.
- Emergency funds: Make sure you’re not neglecting your own financial security. Before sending large sums home, ensure you have an emergency fund in place.
- Long-term sustainability: Are you sending money as a short-term solution, or is it a long-term commitment? It’s important to plan for the future, especially if your financial situation changes.

Finding the Right Balance: Save AND Send
The key to successful financial planning as a UAE expat is to find a balance between saving and sending. Neither option should be ignored. Here are some tips on how to achieve this balance:
- Set limits: Decide on a fixed percentage of your income to allocate to savings and remittances. For example, you could save 20% of your income while sending 10-15% home.
- Automate your savings: Many banks allow you to set up automatic transfers to your savings or investment accounts. This ensures that you’re consistently saving without having to think about it.
- Prioritise emergency funds: Before increasing your remittances, build an emergency fund that can cover at least three to six months of living expenses.
- Reassess regularly: Youb>r financial goals and obligations may change over time. It’s important to review your savings and remittance plans every six months or so. Adjust your approach as needed.

Don’t Forget Retirement Planning
Retirement might feel far off, but for expats, it’s critical to plan ahead. Unlike some other countries, the UAE doesn’t offer retirement benefits for non-citizens. This means you’re responsible for building your own retirement fund. Start by asking yourself where you want to retire. If you plan to return to your home country, investigate the cost of living and potential retirement benefits there. If you’re unsure, consider creating a diversified retirement portfolio that gives you flexibility to retire in any location.
For most expats, contributing to a mix of savings, investments, and pension schemes (if available) is a smart way to prepare for retirement.

The Importance of Financial Literacy
To navigate the complexities of financial planning as a UAE expat, enhancing your financial literacy is crucial. Educate yourself on topics like budgeting, investments, and retirement planning. You can attend seminars, read books, or follow reliable financial websites. The more informed you are, the better your financial decisions will be.
Additionally, seek advice from financial experts or consultants in the UAE. They can offer personalized guidance based on your financial situation and goals. Tax Implications for Expats
The UAE is a tax-free haven, but that doesn’t mean you can ignore taxes altogether. Depending on your home country, you may still have tax obligations on income earned abroad. Before making major financial decisions, check the tax regulations in both the UAE and your home country.
Consulting a tax advisor might be a good idea to avoid any unpleasant surprises.

In summary, the decision to save or send money as an expat in the UAE boils down to careful financial planning. It’s all about balancing your immediate responsibilities with your future goals. By setting clear objectives, budgeting smartly, and keeping an eye on your long-term security, you can find the right mix of saving and sending.
Remember, financial planning is not a one-time task—it requires regular reassessment. With the right strategies in place, you’ll be well on your way to achieving financial stability and peace of mind, both for yourself and your loved ones.