When it comes to money, especially in a country like the UAE, there’s undoubtedly many ways for us to spend it. Whether it’s on the basics, such as food, rent and transportation, or indulgences such as gym memberships, dinners and gifts; spending money is part of our life. For fear of sounding like a stern parent, saving money is essential though.
You can never know when you will need a small fortune to spend on an emergency or a down payment. You have to spend beneath your means and save for your future. Following this guide is a great way to start.
1. First of all: Know yourself
Before you even begin to think about cutting costs, you should actually think about where all your money goes on a weekly basis and multiply that by four. It’s super important to get a clear picture of how much you actually spend on non-essential items. Let’s say you spend Dh80 on takeout twice a week and Dh50 on coffee on a weekly basis; Dh130 x 4 = Dh520 a month. Try and observe your behaviour for the week to really see what changes need to be made.
Watching this video might help you with step 1
2. Adjust your food budget
What you put into your body has to be good quality food that’s full of nutrients and important vitamins. If you order your lunch on the daily, you could be spending upwards of Dh1,000 a month. Additionally you might be eating food that won’t give your body what it needs to be healthy. Use half of this massive amount and buy yourself good quality produce, protein and snacks that can sustain you throughout the month. If you don’t know how to cook, you better start learning, because you can’t be a functioning adult until you know how to make yourself a decent and healthy lunch.
3. Save your change
Most of the time we are handed chunks of change that we basically just throw into our pockets or into our bags. These coins add up over time. Make sure you gather all of that money in a box and head down to any exchange service in town. They will happily take the coins off you, and give you bills in return. Money is money, even the 25 fils you receive from a cashier. Keep it, save it and exchange it.
4. Put your savings aside at the begining of the month
Okay this isn't exactly new, or rocket science, but you have to admit that a lot of people just don't follow through. If you put some money aside at the start of every month, you won't spend it! It's easy to spend when you see that you have cash in your bank account. So just assume that this amount doesn't exist, so you don't spend it. You may actually not even feel the difference, because you will notice yourself adjusting to this new life accordingly.
5. Don’t grocery shop while hungry
Grocery shopping while you’re hungry is dangerous. You end up overspending and overestimating what you need. You’re also more likely to buy junk. Make sure you are full when you head to the grocery store, because even a little hunger can lead to unhealthy decisions. Studies have also shown that hunger affects your non-grocery purchases, such as clothes and electronics. Our desire for food is so powerful that it affects other behaviours.
6. Enjoy the perks of your city
Do your research and head down to places that offer free beverages and nibbles, instead of spending your hard earned cash. For the women, ladies nights are a perfect way to enjoy a night out without spending any money. There are also some perks available for men, who can enjoy gentlemen’s evenings with free beverages at specific venues in the city. Make sure you download some free or non-free apps that help you save money while enjoying life and going out in the UAE.
7. Save on electricity
Small changes such as switching off the lights, or keeping the water off while you brush your teeth can go a long way to help decrease your electric bill. What some people don’t know, is that unplugging your devices when you aren’t using them also saves electricity. Before going to sleep, take a quick walk around the house and switch off all your devices and unplug them from the wall. You will notice a drop in your bill at the end of the month.
8. Choose paper money over plastic money
When you have actual cash in your wallet, you tend to spend less, since you become more aware of how much you’re spending every day. So at the beginning of every week, draw out the exact amount you want to spend for the week in cash. This gives you a budget that you shouldn’t exceed.
9. Follow the 50/20/30
Planning for the long term has got to start now. Those numbers are the ultimate rule book you need to follow, if you want to have a healthy financial future. The best way to live is to spend 50 per cent of your salary on your fixed costs, such as rent, transportation and your essential bills. If your fixed costs exceed 50 per cent of your salary, then you should consider a different service provider for your phone and internet or cheaper housing. 20 per cent of your salary should be put aside for your financial future, while the final 30 per cent can be spent flexibly on eating out, groceries, shopping, hobbies, entertainment, or gas.
Let’s say you earn Dh15, 000 a month. Your fixed cost should not exceed Dh7, 500. You should put Dh3, 000 aside every month and spend no more than Dh4, 500 on yourself. By the end of the year you could save a whopping Dh36, 000.