January 27, 2010

The Cost of Living

Before we came here, we were warned that the city was expensive. We steeled ourselves for the worst.

In fact, the worst came in the form of rent prices, among the highest of any city in the world. We live in roughly 400 square feet and we pay a little less than $2,000 per month, but the apartment is furnished and it includes utilities (and, supposedly, maintenance). We'll see some of the savings, sure enough, come summertime when the A/C is all cranked up. It should be mentioned, too, that our rent is substantially lower than what most people pay for an unfurnished one bedroom in a decent neighborhood. But our space is less, too, it's true.

It's not unusual for grown people to share homes, with multi-bedroom apartments housing multi-roommates. Some of this has to do with the fact a lot of people are here sans spouse or other. But most of it has to do with the price of the apartments here and, more importantly, the scarcity of housing.

The problem is less one of high-cost housing so much as low-availability housing, and in the end, that's all that matters.

But the rest of daily living almost makes up for it. First, there are no taxes. No renter's tax, no sales tax, no income tax, no gas tax, no sin tax. (OK, a little sin tax: An alcohol license is about $80 per year, and alcohol is taxed at 30 percent). So the money I make is what ends up in my bank account and the price on the meal I'm eating or the new shoes I'm buying is what I'll be asked to pay.

It's pretty cool.

The tricky part in figuring this out, and why it has taken me three months to really come to grips with it, is the currency exchange. The UAE dirham (not to be confused with the Moroccan dirham) is worth 27 cents in a fixed exchange rate with the dollar. So there's a lot of math. This was a problem, too, when France was still using the franc. And that currency fluctuated, so prices changed all the time. Add in metric measurements for things and it takes a little work to get to the price of things. I believe I had the same three-month revelation in Hong Kong when I finally figured out the proper exchange rate there.

So I might balk at the concept of something costing Dh100, but it's actually $27, and when you figure my microwave (Indian made!) costs Dh128, then it's a wow! moment. But there's definitely a psychological barrier to a Dh100 bill when so many things cost less than Dh20 and nobody here likes to give change. This isn't helped one iota by the fact the cash machines dispense 100s, if you're lucky, and 500s and 1,000s more often.

It's like buying a candy bar at home with a $20 bill.

Which brings me back to my original concept of the cost of living. Each week I go to the bank machine, take out a whopping Dh1,300 and the machine almost always gives me Dh1,000, Dh200 and Dh100. You can't just go to the corner grocery with that kind of cash.

And after the bank machine I go straight to the grocery store to get some change. I've found myself in trouble a time or two, waiting too long to get to the cash machine and having only Dh100 for a cab to get me to the bank. That actually doesn't work, so I have to go to a medium sized grocery and buy something stupid, like a loaf of bread, which costs Dh3.50, so I can have change. I try to remind myself that everyone should have the problem of too much money.

Anyway, I've been going to the big grocery store after I hit the ATM. This has been a weekly thing, due to work schedules. And my grocery bill for a whole week runs about $60. I bought 54 items the other day, and only four of them cost more than than Dh10: Milk (Dh10), a Greek salad for lunch (Dh11.25), 8 oz of sliced butterball turkey (Dh18.50), and some cheddar cheese (Dh17.75). I also bought yogurt and sliced cheese and bread and several prepared meals, a variety of fruits and vegetables, some cookies and some bottled water and the most I paid for any of it was a little over $2.

And I thought making the transition from French groceries, which are reputed to be expensive, to US groceries, which are, was tough. Going from food prices here to those back home is going to be one huge jolt of culture shock.

It extends to other parts of my life, too. In Hong Kong, our housekeeper was cheap -- $8.50 an hour. Here, it's reaallly cheap: $6.80. And, just as is it is California, it's off the books for everyone. (My housekeeper has a regular cleaning job at a company; she does housework on her own time, and as far as I can tell cleans for at least half a dozen people in the newsroom).

After picking up some laundry the other day, I was muttering about the cost - Dh25!! Then I realized I'd had a full set of sheets and pillowcases washed and ironed, two pairs of pants and two men's shirts. Gulp. $6.80.

Taxis are a bargain. Flag fall is Dh3 (81 cents) and a trip from work to home is $1.50. With a tip, it's $2.70. Because we have our own drive to work, we pay a bit more -- a whopping $5.50 because he shows up every day at the appointed time, seven days a week.

So yes, we are living well while living frugally. And it's a nice reality.

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