Every day more and more people from all over the world come to the UAE looking for job opportunities. Although there is little doubt that, in general, UAE offers better wages, in particular taking into account taxes (or rather the absence of them), the cost of living is often comparatively much higher.

To make a realistic comparison of the cost of living in the UAE, we have to take into account the fact that while in Spain we have a public system of health and education; in the UAE most of these services are private. Moreover, prices, above all for housing and education, have increased significantly in recent years, above inflation, which in February 2014 stood at 4% yoy.

In an article recently published in GulfNews they said that up to 90% of parents are overwhelmed by school fees and

dirham

dirham

families earmarked more than 50% of their income on their children’s education. Today, with a threat in increasing school fees, all parents are scared. In some cases, the cost is so high that parents look for alternative solutions such as ‘ home schooling ‘, which is nothing more than to educate the children at home with an international educational method.

As a reference, these are the real costs of education in UAE:

–          Starting with the lowest levels, a kindergarten costs from AED 20,000 to AED 40,000 on an annual basis depending on the level and hours

–          The rates at primary level can range from AED 25,000 to AED 80,000 per year

–          In secondary can reach up to AED 130,000 per year.

We should add as well the transportation cost, school supplies, trips, dining and extracurricular activities that are taught in schools

–          At university level, most expatriates opt for studying abroad and then the rates increase substantially.

  • In the U.S., the average tuition cost for a mid range college is a minimum of USD 8,200 per annum (October 2012 data www.nces.ed.gov)
  • In the UK, the average tuition cost for a mid range college is minimum GBP 9,000 per annum (October 2012 data as Telegraph UK)

This is just tuition fees alone and does not take into account the substantial and rising costs of living, including campus accommodation, food, flights back home, books, entertainment etc etc…This list is not exhaustive…

  • In Spain, taking as a reference Madrid, university fees have suffered a bleeding increase of 65% in the last two years. This is unprecedented and almost unbelievable! Traditionally fees in Spain have been much lower than that of their western counterparts such as America and the UK.  However, this dramatic increase shows that the trend for Spanish schools and universities is moving in the same direction as the other Western countries where fees are much higher. Below the link to two newspapers:

http://www.lavanguardia.com/local/madrid/20130718/54377899429/la-universidad-convierte-lujo-madrid.html

http://ccaa.elpais.com/ccaa/2013/12/04/madrid/1386160051_017178.html

  • Although less common, some expatriates prefer to stay in the UAE for pursuing higher education degrees, but here the costs are also very high. An annual program can range from AED 50,000 ( Middlesex University Dubai ) to AED 198,900 (University of Wolongong in Dubai), depending on specialty

Given these figures, it should not surprise you that we often find in the UAE newspapers families caught in a cycle of spending and debt that is difficult to escape.

In this context, sound financial planning becomes a priority. An effort in today that allows freedom tomorrow, ensuring that our children have all the options to decide their future when the time comes. However, in many cases by the hectic pace of professional life lived here, the issue goes to the background.

In the UAE there are many companies involved in financial advice for expatriates, but not all of them have in their ranks Spanish speaking financial advisors. Gemma Valero is a wealth consultant who specializes in Asset and Wealth Management.  Gemma has over five years of experience in Europe and the Middle East. Gemma works for the company PIC – deVere Group, offering independent financial advice to professionals expatriate, mainly Spaniards and Latin Americans working in the United Arab Emirates.