Dubai Cost of Living compared to USA

Posted on Categories Lifestyle

(Source via Living In Dubai)

It is time to consider which place will give you what you’re looking for; the best possible quality of life. This article covers in some depth the 4 aspects of life that usually take the biggest chunk of your pay. The associated costs and price comparisons will help you with your calculations.

Of course there are different degrees of spending, based on whether you tend to be frugal or flash with your cash. Here we’ll go down the middle road. After all, life is about balance.

Accommodation

Dubai is a notoriously expensive place to call home. Whether you choose to buy or rent, the amount you have to pay can make your eyes water. To rent a 3 bedroom villa, you can expect to pay at least 150,000 dhs a year.

Frustratingly, rent also has to be paid in advance; some landlords expect to be paid in 1 or 2 cheques, so you really need to budget for this. To buy the same 3 bedroom villa, you are likely to have to fork out around 2 million dirhams.

Luckily, it’s not all bad news. Most employers will offer company accommodation or will pay a live-out allowance to their staff, which sometimes can cover the complete cost of your accommodation.

Free housing? Yes, free housing. Two extremes, so check what your contract says.

Of course, trying to work out the average price of accommodation in the USA is not the easiest task. It varies based on where you live; whether it’s in the city (and which city) or whether your home is in a rural area.

The latest data shows that in March 2016, the average house price in the US was $186,000.

According to website Statistic Brain, the 3 most expensive mainland states to buy in (if you go by the average house price) are Washington DC, California, and Massachusetts, in that order. On the other end of the scale, the cheapest states to buy in are West Virginia, Mississippi and Oklahoma.

As a rough guide, an average 3 bedroom house on the outskirts of a large city is likely to be in the region of around $250,000 – $350,000 if you’re buying. Renting the same house will cost you anywhere between $1500-$2500 a month.

Monthly Bills

Yet again in Dubai, monthly bills can vary greatly based on whether your employer provides your accommodation.

If you are living in company housing, then it’s likely that they will also take care of your electricity and water bills. Due to the weather, this can be a substantial amount, especially if you have a garden.

Going back to our 3 bedroom property, your bills (if you do have to pay them yourself) will be around 2,000 dhs per month.

Remember that summer months are much higher cost because of air conditioning. The average bill for our US home came in at around $290 a month, and that includes utilities, fuels, and public services.

Other monthly bills such as entertainment packages, internet, and mobile phone contracts vary based on how technology-savvy you are.

It would be easy to spend upwards of 2,000 dhs per month on these bills, but I also know people who manage to spend less than 500 dhs a month on all of the above too.

For example, you can limit your spending by using Skype instead of calling overseas with your mobile phone, or by subscribing to Netflix instead of paying for cable TV. The same concept applies in the US, so bills can be as high as $350 or as low as $80 a month.

Grocery Shopping

The seemingly never-ending chore of going grocery shopping in Dubai is partially so painful because of the prices you pay.

Of course, there are budget buys to be had, but if you’re hoping to pick up your favourite foods and brands from back home, you can expect to pay through the nose for the imported products.

Fresh foods such as fruit, vegetables, and meat are also expensive. The US, by contrast, offers plenty of options for cost effective shopping with regular bulk buy offers and special deals.

On the flip side, the cost of items such as bottled water and soft drinks are almost 300% lower in Dubai than in the US. Due to these extremes in pricing, Dubai, somewhat surprisingly, ends up slightly cheaper all-round for grocery shopping.

For more figures that are displayed with such a detailed breakdown, check out Numbeo. Organic shops and food options are more readily available in Dubai now, although the prices are of course higher, as they are in the US.

Transport

Transport in Dubai is wonderfully cheap. Once you’ve done the deed and purchased your own car, the running costs are minimal because fuel costs are so low.

One additional cost that has a way of creeping up on road users is the e-toll known as Salik. Each crossing costs 5dhs, and one the main highway, there are 3 crossings from one side of town to the other.

That said, there are alternate roads that don’t have toll gates and do not add significantly to your travel time, so avoiding the tolls is easily achievable.

Public transport is also an excellent value. A very clean, comfortable network of buses weaves its way around the city, while the world’s longest driverless train (the metro) runs the length of the city with some convenient deviations.

The prices are between 3 and 12 dirhams per trip depending on the class of travel and the distance covered. Taxis, although more expensive than they used to be, are still a very good value in comparison to the rest of the world.

Transportation in the US is more expensive in all aspects. According to Numbeo, the average price of fuel in the US is 22% higher per gallon than in Dubai. Their data also shows that local public transport for a one-way ticket is 65% more expensive on average in the US than in Dubai.

The cost of taking a taxi (per km) is 190% higher in the US, while the charge for a taxi’s waiting time is a whopping 267% higher in the US.

Now that you have an idea of the unavoidable costs of living, it’s up to you to see whether you can make it work. If you are considering Dubai, bear in mind that there are no pension schemes so you’ll need to think about keeping some money for investments or savings.

Also, don’t forget to consider how much money you want left over for life’s pleasures. You need to leave some money in the bank for entertainment and eating out. Work hard, play hard.