17 Reasons Why Expats Can’t Save Money

Freedom isn’t always free, it comes at a price — and sometimes monetary. You don’t often notice this, though. Take Dubai, for example. Much like Mumbai, New York, Manila, and most of the world, Dubai is an open city and people are free to spend money anywhere they wish. And they do, lavishing on things that end up draining their bank account. This is one big reason why expats can’t save money.

For expats like you, earning money comes at the price of hard work. That’s why it’s a waste when your funds get blown on all the wrong things when they should be spent building a future for yourself and those you care for.

It’s true, the bigger salary and better quality of life let you indulge yourself in things you wouldn’t otherwise have. However, it’s a slippery slope from there and you can quickly unravel into unchecked spending sprees that end up putting you in a worse position than you were when you started. And you’re talking not just about bad credit or lack of savings. Being deep in debt is a very real occurrence for many expats.

In this list, we’ll be tackling 17 of the major ways why expats can’t save money even if they want to. This will range from the things in their environment, to the things they have full control of. Hopefully, with this guide, you can shed light on the factors and behavior expats should focus on if they really want to keep what they earn.

1. Expats spend their money unwisely

Most expats go to other countries for a specific financial reason, which is often to save up for something. But the more they spend time in the foreign country, the more they spend money on unnecessary things. With shops, malls, services and other tourist traps everywhere, it’s so easy to make a money drain for oneself. One can easily buy “cheap” clothes and gadgets, for example, and slowly lose sight of their original goals and personal budgeting.


2. Expats don’t follow the traffic rules

Another reason why expats can’t save money is their lack of knowledge of the local traffic rules or they don’t follow road transport authority rules on the speed limit. traffic and parking signs. Unlike back home, not following the speed limit and the traffic signs can earn you a sizeable fine. The Road Transport Authority is very strict in the UAE, for example, that many expats tend to get fined almost half their salaries and even more! I knew a friend got a huge fine for over speeding amounting to 5,000 dirhams. That’s equivalent to 1,360 US dollars and that’s two months budget for most of the expats living with their families in Dubai.

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3. Eating out is a “must”

Friday brunches and similar things are often a part of the foreign country expats find themselves in. While it’s okay to take part in these, doing so frequently would definitely make a significant dent in one’s earnings.


4. Frequent travel

For an expat, travel can be anything from going to new places to visiting friends and family — both locally and back in one’s homeland. This means spending on cabs, planes, trains, and car rentals. While transport is usually cheaper in these countries than they were back home, they tend to stack up especially when such travels aren’t connected to earning opportunities.


5. Living in expensive accommodations

Not all countries have cheap costs of living. Rent in the UAE especially Dubai is, for example, considerably more expensive than in other countries. This is why it’s important to look around for the best deals, but not everyone takes the time to do this. It’s also important to consider if your salary can pay for your accommodations, as most often you need to wait for a salary increase before moving to more well-off dwellings.


6. Chilling out too often

Living in a high-income country would expose expats to locals who seem to have fewer problems with their lives than back home. One would find these people chilling out in mornings and evenings, drinking expensive coffee and eating out in expensive restaurants. Soon you are drawn into the same lifestyle, but regularly chilling out isn’t often covered by the expat’s salary.


7. Expats are easily blinded by shiny things

Many expats believe that they are in a better place to earn good money from their salary and they think that being with high salary making every month they splurge to buying unnecessary things because they think that there is another paycheck in the next month. As a result, they tend to buy shiny and flashy things (jewelry, the latest tech, etc.) without really considering their future value.


8. Working hard means partying hard

The idea of “splurging” and “treating yourself” is also a slippery slope. Sometimes the expat works so hard that when he takes time off, it is spent partying and going to bars. That’s not bad in itself, but the accompanying spending tends to be as wild as the night.


9. The tendency to one-up countrymen

There is a certain mentality among expats that when they meet their countrymen, they have to prove that they are much well-off now than they were back home. Hence, expats tend to spend most when with other expats, displaying just how “rich” they have gotten.

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10. Abusing credit cards

Not everyone grew up in the credit culture, and there are still those who view credit cards as “free money”. This is very dangerous, as it leads to mountains of debts. Unfortunately, being eligible to get a credit card doesn’t always mean being trained in using it. It’s a reason not just why expats can’t save money, but also why the money they earn often go to payments instead of to their savings.


11. Limited access to banking options

This depends on the country, but not all are open to foreigners openly using their banking services. Often, the requirements to open a bank account and get financial advice are beyond the scope of expats. This leads to the latter relying on old “keep it somewhere else” methods, and their money gets spent bit by bit.


12. Then the family comes in

When a family starts to figure into the expat life in any way (aside from the usual monthly remittances), then savings become harder. Expats often find themselves fully supporting more than they can afford. As a result, they work harder, and they are more exposed to the example we had in #8.


13. No clear savings plan

Not everyone has a working system for getting savings as well as not doing paying yourself first habit. Often, expats go through the usual “what is left goes to savings” mentality. But what if too little is left, as is sometimes the case? This is why so many earn enough to save a small fortune but are unable to do so. Many think that simply budgeting should be enough, but there is something big missing in how these budgets are effectively implemented to result in savings.


14. Investing money in the wrong company

For the expats who have grown weary of simply putting money in the bank account, it’s time to look into investing. However, too many expats fall into scams and promises that are too good to be true. Protecting one’s investment is just as important as the rate of return, especially when the money comes from sweat and tears. However, not all expats take time to research the company they are investing in.


15. They still fall into tourist traps

Several years down the road, most expats understand the culture of the place enough to become wiser in their ways. However, not everyone gets to this phase. There are still many expats who have been there for quite some time who still get sucked into expensive purchases and “treats” that are usually just meant for tourists.

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16. They haven’t gotten rid of the “spending culture”

Effectively spending, especially for an expat, means you need to have a paradigm shift. One needs to go from a “spending culture” to a “savings culture”, no matter what the local culture dictates. And yet most don’t grow the latter, still going into the malls every sale day and still not tracking their money flow to plug leaks in their budget.


17. They are “enjoying their freedom”

We’re circling back to the very first point we made since this is a reality of the human psychology and affects almost everyone. To most of the world, money equals freedom, and the more they have (and spend) the happier they are. Most expats start off by enjoying their new financial freedom, trying to experience the world in ways they never had before. But like everything else, money is a freedom that you must work hard in order to enjoy. Most come around to this realization after their first sprees, but there are those who keep to it even after a long time.


Granted, these reasons why expats can’t save money aren’t applicable to everyone. We will never run out of success stories that detail how expats curtail their own psyches to develop a savings-geared mentality. They end up not just being immensely successful, they also serve as inspirations for their countrymen who are seeking to live “the dream”.

These stories — a good job, a good life, a happy family — are often reasons why legions brave the seas to live elsewhere. But it’s very important to realize that aspiring expats (and actual expats) shouldn’t just look at the results of success waiting for them. It’s doubly important to look at how the sausage is made, so to speak, and to understand the many factors that can affect success, especially in a foreign land.

In this list, we have described just the 17 basic reasons why expats can’t save money so you at least have a basic idea on what to avoid. But the actual efforts on avoiding these and finding your personal path to true financial freedom are yours alone to make.


What is your daily or weekly activities that prevent you from saving money? If you are doing what is stated above, would you like to change? Share your thoughts below.

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