Writing down expenses will give you a clear picture of your financial position. Through this process, some people will find that they’re spending more than their income and this calls for some serious cost-cutting measures. Here are a few tips to solve a budget deficit:
• Get your priorities straight and think before you spend. You probably have planned to start several projects this year and if that’s the case, Neil Stewart of Acuma says it’s a good idea to “take a step back”. Go through each item on your wish list and consider if you need it, “desperately want it or can live without it”, and if it’s “purely a whim that will be forgotten about before long”.
• Downsize. Consider moving to a smaller house or a cheaper accommodation which is near the school and office. “[The latter] can save you travel costs as well as accommodation costs,” says Steve Gregory of Holborn Assets.
• Cut indoor entertainment and communication costs by cancelling your TV subscription and landline.
• Restrict shopping, movies and other expensive entertainment activities. Do something fun at no or lower cost. Try camping, going to the beach, etc.
• Change your energy-consumption habits to save on water and electricity expenses.
• Lower your spending on car maintenance and fuel by commuting to work. If you’re driving a fuel-guzzler, consider switching to a smaller car. “While fuel in the UAE is not that expensive, other motoring costs can be. A smaller car may help free up your budget. A newer car may save some of the expenses you suffer, especially if it comes with free servicing and long-term guarantee,” advises Gregory.
• Review your monthly bill from Dubai Electricity and Water Authority (Dewa). You need to double check if the figures are correct. “Are you being charged the correct amount of municipality tax or should it be reduced to 5 per cent of your rental cost?,” suggests Gregory.
• If you love eating out, your weekly breakfast or dinner al fresco could create a hole in your wallet over time. You don’t have to stop dining out, instead look for discount vouchers and special offers and use them to reduce cost, suggests Gregory. “Consider a hotel group discount card which may offer buy one get one free.”