This post is Part 1 of a two-part series, where we explore the Cost of Living in Dubai

Part 1: How Much Does it Cost to Live in Dubai? (this post!)

Part 2: How Does the Cost of Living in Dubai Compare to Other Major Cities?


 

We all know that Dubai can be an expensive city to live in.  But just how much should you budget for annual expenses?

 

There are some reports published by the Dubai Statistics Center regarding the “Annual Average of Household Expenditure and Consumption” which are interesting to read.  But the last report was issued in 2014 and prices have certainly changed over time.

 

So for this post, I’m going to rely on market survey data (researching various websites) and information I have from my own personal experience of living in Dubai for the past 6 years.  If you have any experiences which are significantly different, please comment below … particularly if your costs are lower, because I’m always looking to save some money!!

 

It’s tough to say exactly what your expected annual budget should be based on differences in the size and needs of your family, as well as the living standards you aspire to.  It’s safe to say that there is almost no upper-limit on the amount that you could spend in Dubai.  Depending on the area you live and the type of places you eat and seek entertainment, your budget could easily expand into the millions of Dirhams per year!  But I’m not going to focus on that kind of lifestyle in this post…

 

For this analysis, I’ll assume a middle/upper-middle class lifestyle for a typical expat family.  I’ll show what expected costs might look like for a family of 4 (with two kids in school) and a family of just 2 adults.  I hope this will address a large portion of the readers and will provide some helpful guidelines for you to consider.

 

Let’s get right to the details…

 

Housing

– A nice 4 bedroom villa (plus Maids room) in one of the popular expat neighborhoods (Greens, Lakes, Springs, Meadows) will cost anywhere from 160,000AED to 250,000AED depending on location and upgrades.

– A nice 2 bedroom apartment will cost you anywhere from 120,000AED to 160,000AED in JLT or Dubai Marina.

 

Utilities

– For a 4 bedroom villa, you can expect to pay between 2,000AED per month during the winter all the way to 6,000AED per month during the height of the summer!  I recommend budgeting about 32,000AED per year.

– For a 2 bedroom apartment (with the Chiller included in your rent), you can expect to pay 1,200AED per month up to 2,000AED during the summer.  I recommend a budget of about 18,000AED per year.

 

Internet, Home Phone & TV

– For a standard package of high-speed internet, plus a home phone line and basic tv channels, you should budget about 350AED per month per household.  That comes out to 4,200AED per year.

– You can add other tv packages for other premium channels, but this can get expensive fast!

 

Mobile Phone

– You should budget about 300AED per month per person for a good plan with plenty of talking minutes and sufficient data.

– For a family of 4, I recommend budgeting 800AED per month (in case your kids might have a phone plan).  This comes out to 9,600AED per year.

– For a family of 2, you should budget about 600AED per month.  This comes out to 7,200AED per year.

 

Food

– This is really determined by your lifestyle choices … what foods you prefer to eat, where you like to shop, how often you go out to eat, etc.  To help provide a budgetary guideline, I like to think of it as an average run-rate per day, regardless of the details of your food choices.  So…

– For a family of 4, I recommend budgeting an average of 30AED per person per day (including breakfast, lunch, dinner, snacks).  This comes out to 43,800AED per year.

– For a family of 2, I recommend budgeting an average of 40AED per person per day (including breakfast, lunch, dinner, snacks).  This comes out to 29,200AED per year.

 

Transportation

– To lease a good car, you should budget about 2,000AED per month (including insurance) with an extra 500AED per month for gasoline (depending on usage).  This comes out to 30,000AED per year.

– If you buy a car, the budget is really up to you!

– Public transportation is very cheap.  You could use the metro or taxis every day.

– Or choose from on-demand ride services such as Careem or Uber.

 

Insurance

– At a minimum, you must have health insurance that covers all the dependent people in your family.  Prices will vary based on your coverage, health background, etc.

– I suggest you do some online comparison shopping to compare rates.  Check out Yallacompare.com – Health Insurance

– I checked for a family of 4 (2 adults, 2 kids) with no prior major health conditions and the annual policy premiums ranged from 15,000AED to 35,000AED.  I suggest budgeting 22,000AED per year.

– For a healthy family of 2, I suggest budgeting 12,000AED per year.

– Check your employment contract, as many companies will pay your health insurance premiums as a benefit.

– You should also consider other kinds of insurance, such as rental insurance for your personal property.

 

School

– There is a wide range of options when it comes to schools, with many different price points as well.  I assume your priorities will be the curriculum as well as the average quality rating of school.  Check out this great resource from ExpatWoman which shows a database of Dubai schools a recently reported tuition fees.  Expatwoman.com – Dubai School Fees

– For a top-notch school, you should budget 50,000AED to 90,000AED per child depending on the grade level.  I’d suggest budgeting 120,000AED per year for a family with two children.

– Check your employment contract, as many companies will pay a large portion of these school fees.

 

Entertainment

– Again, here your expected annual budget will be highly dependent on your lifestyle choices and preferences, including the kinds of activities and hobbies that you choose to pursue.

– For a family of 4, I’d budget for 400AED per person per month.  That comes to 19,200AED per year.

– For a family of 2, I’d budget for 500AED per person per month.  That comes to 12,000AED per year.

 

Clothing/Shopping

– This totally depends on your lifestyle choices and how often/where you choose to shop.

– For a family of 4, I’d budget 7,500AED per year.

– For a family of 2, I’d budget 4,000AED per year.

 

Gym

– Depending on the gym and the amenities, this could range from 2,500AED to 5,000AED per person per year.

 

Maid/Nanny

I wrote a lengthy post about this already (be sure to check it out!).  I recommend budgeting 45,000AED per year.

 

Private Villa Pool

– If your villa has a private pool, you should budget about 5,000AED per year for maintenance and servicing.

 

So what does all that add up to?  I’ve made this handy infographic to summarize all the costs discussed above with a total approximate annual budget for a 4 person and 2 person family.  Again, I’m sure that your budget doesn’t exactly align to this and may be higher or lower in some places.  Could you please add a comment below to let all the readers know what your experience is like?

 

 

Wow, so it CAN be expensive to live in Dubai!  It all adds up.  And because this is the case, you need to thoughtfully consider your budget each year in advance and make careful plans about how you’re going to allocate your resources and manage your cash flow.

 

One more thing…

 

We need to have a serious talk.

 

Take a minute to check out this article and then come back to this blog post…  TheNational.ae – UAE Expats Turning to Loans to Fund Rising Lifestyle Costs

 

… personal borrowing for essential outgoings such as rent and school fees is becoming more commonplace. Many expatriates are now forced to fund their future lifestyles, as annual rents are expected upfront and while school fees are generally paid a term ahead, discounts are offered for paying the entire year.

 

“The availability of credit and the sense that we should, as expatriates, have it all means people are increasing borrowing their lives a year in advance, with the hope that they will be able to manage the commitment,” says Caroline Domanska, the founder of Money Mindset Coaching. “The worry is that rent is due every year and school fees come every year so when will the cycle of debt stop?”

 

Salaries are not keeping up with the rising cost of living, only increasing by about 5 to 6 per cent on average every year. Banks have been introducing new rental loans, cash flow loans and education loans over the past few years.

 

As a Personal Finance Coach, this article makes me INCREDIBLY FRUSTRATED.

 

Here’s some friendly free advice for you…

 

Do everything you possibly can to NEVER take out a loan to pay for your regular lifestyle expenses.  It’s the sign of very poor personal money management if you need to finance your living expenses on a credit card or through personal loans.  The only kind of debt I’d recommend you ever take on is a mortgage for your primary residence (at a low fixed rate) or a loan for an investment property or small business loan.

 

I know that life can be tough sometimes and you can get a curveball thrown at you.  You might lose a job or incur a major expense that you weren’t expecting.  This is exactly why you need to put a solid personal finance plan in place in advance of these kinds of calamities.  You need to have a (minimum) 6-month Emergency Fund.  You should have good Health Insurance for your family.  You should have a plan to cover major expenses such as Housing and Education.

 

Lean on your family and friends for short-term financial support if needed, but don’t bury yourself with debt, please.

 

If your Income is not sufficient to cover your Expenses, then you need to adjust your lifestyle.  It’s as simple as that.  You should never take on debt to finance a lifestyle that is beyond your current earnings capability.

 

So what does this mean for Dubai residents?

 

Based on the cost of living analysis above, I recommend that if you expect to live a typical middle-class expat lifestyle and are not making at least 22,000AED/month for a family of 2 or 45,000AED/month for a family of 4 … then you should consider if Dubai is the best place for your family to live, or if perhaps you have better options.  I hope that’s not too harsh, I just think it’s the reality and I don’t want you to put yourself in a bad financial position.

 

Your options are to push for an increased salary and better benefits, reduce your lifestyle expense expectations, or move to a different city where your cost of living may be lower.

 

These are exactly the kinds of personal finance decisions that you need to consider, and are the types of things that I am passionate about helping people think through.  If you need support and coaching with your personal finances, then please reach out to me.  I’d be glad to work with you to help you create a solid plan.

 

Good luck to everyone out there, you can do this.  I wish you all the best for success and happiness here in Dubai!

 


As always, check out these additional resources below…


Matt Nobles is the founder of Dubai Personal Finance.  In addition to being a certified Personal Finance Education Instructor, Matt also has 10 years of Corporate Finance experience, working for a large multi-national company.  Matt is passionate about helping people like you learn how to make wise money management choices, so you can achieve Financial Independence and focus on living the life you’ve always wanted.


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(Disclaimer: This article contains information for your reference and explains options you may have, but it is not intended to be specific advice or a personal recommendation. DubaiPersonalFinance.com exists to provide general guidance and education, but your situation may vary from the one discussed here, so please seek a licensed professional for tax, legal, financial planning or investment advice.)

 

Please let me know what you think of this post.  Where do you agree and disagree?  Comment below!