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Would you be ready if you became unemployed tomorrow?

Have you ever stopped to ask yourself “What would I do if I lost my job?”. What if you lost your job tomorrow? Nobody wants this, and no one wants to talk about this. Trouble is, it’s our job to bring up these possibilities and make sure you’re protected.

Say you’re on a plane home because of the unforeseen. The only thing standing between you and panic is sound financial health that can withstand unexpected circumstances.

The bad news doesn’t even have to be a one-way plane ticket home. It could be someone falling sick, an extended leave from work, or falling between jobs for a bit. So how do you prepare? By being smart with your money.

If you’re reading this, chances are you’re an expat in a low tax, sunny environment. Congrats, because you’ve just landed yourself a great opportunity to experience international life while getting your financial security sorted.

There’s no magic remedy though. Financial resilience comes from thinking about finances from the get-go, and planning the right way. Ensuring that you ask these tough questions about things you don’t really want to think about is really important… so, ask yourself now “What would I do if i lost my job?, What would I do if I fell sick and was unable to work for an extended period of time?, etc. etc.”

The planning starts way before you land. Budget your move – everything from packing to the air tickets to the rent you’re going to pay for accommodation the first month. Moves are costly, and even little expenses add up. It’s always better to have cash in hand rather than debt with the bank.

Now, you’ve landed. And you’re delighted with the tax-free packet you’re getting. Hello, sunny beaches and all-day brunches. We’re going to have to stop you there again – sorry – because there’s always a flip side. Taxes basically pay for your safety net. In low and tax-free environments, chances are the government’s not going to provide you with that safety net. No unemployment allowance, no free healthcare and no education support. You’ll have to create your own safety net. And keep in mind that relocation always throws up unexpected expenses. For instance, making friends. Socialising means going out, which might not be cheap.

Right, let’s say you’re a year in. By now, things are settling down. You’ve made friends, know how much things cost, and where the discounts are. You’re stable in your job. Now’s the time to act immediately and set up a formal budget. Pay your savings first before spending anything. Remember, the UAE gives you a great opportunity to put away some of that tax-free salary for the future. Don’t squander the opportunity, and get expert planning help to structure your finances. Dont forget those questions we asked ourselves earlier… “what would I do if i lost my job?”, well by putting that bit away each month, you could build up quite a nice buffer should something happen! You’ll thank yourself later!

Once you’re an established expat three or five years in, all seems well. But as your salary and financials go up, so do your responsibilities. Life happens – and that means finding someone, having children, going through the loss of a family member, and factoring in future school fees. As your life changes, so must your budgeting. Remember- without a state safety net, you’re going to have to provide the protection of your loved ones from the unexpected. Rule number one of financial health: safety first!

Just as you cross the ten-year mark and think you have it all sorted, it’s time to look at things again. You’ve hopefully been saving for the end game, and have a buffer stashed away. It’s now time to get serious about tax optimisation, diversification and making sure you can access your money wherever you wind up. You don’t want to get on a plane only to discover there are 5% access fees on the other end every time you touch your savings.

The last word from us – even if you’ve had a long expat career and are calling time on your own terms, there are still a few loose ends to think about. Final tweaks to your portfolio can mean hundreds, even thousands, in savings. Think tax wrappers, and diversification to ensure you don’t get caught in a market downturn that you won’t have time to recover from.

So what if you suddenly found yourself on a plane home? Well, with expert help and sound planning, it’d be just another adventure and the start of a new chapter.

About Mike Coady

Mike Coady is an expat expert based in Dubai and is on hand to help with all of the above and more.

Mike is an award-winning money coach and industry leader in the financial sector.

Qualified to UK Financial Conduct Authority (FCA) standards, a member of the Chartered Insurance Institute, a Founding Fellow of the Institute of Sales Professionals (FF.ISP), a Fellow of the Institute of Directors (FIoD) and featured as a highly qualified Financial Adviser in Which Financial Adviser.

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Blog published by Mike Coady.