When the Goradias’ phones go beep on pay day each month, they head to an ATM, from where they withdraw 25 per cent of their combined salary. This, they put into labelled envelops.
These pockets of cash will lie in their safe, to be used over the rest of the month for everything, from groceries to family outings.
Forty-year-old Nehal, who has been in the UAE for 20 years, and her husband try to save 50 per cent of their salary each month. Nehal explains that it took years of hard work and budgeting to get this point. "We saved smaller amounts at first and increased that amount year after year," she adds.
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It’s all about planning, says Nehal in an interview with Gulf News. She explains that the family has a personal loan worth Dh11,750 that they are paying off. They withdraw another Dh11,750 each month for expenses such as rent (Dh8000) inclusive of electricity, water and chiller charges) and food (Dh1,800), and miscellaneous (Dh1,200). Every 20 days, Dh750 is put aside for school – or for, now that physical school is back, kid-specific expenditure.
“Costs have gone up since school began: money for new clothes, transport – if they go out anywhere, they need money to spend or taxi fare. But if this money is saved, it goes into a home bank. When we go out for holidays we use this money,” says Nehal.
Their savings, meanwhile, go towards life insurance, fixed deposits and a recurring pot that will in a couple of years yield Rs1.5 crore (Rs15 million; Dh745,923), which will be used towards their daughter’s higher education fees. (School is subsidised for the 17 year old Dubai student at the moment as her mother works in the institute.)
Planning, she says, is key to saving that hard-won cash. She explains: “When grocery shopping, every store has weekend offer on fruits and vegetables – I am very careful to use that. I use an ADCB card to buy groceries – mainly online – and it gets me in places like Lulu a 10-15 per cent discount. I ensure I pay off the amount used on the card each month so I don’t accrue any interest.”
She adds that the family has always put aside some money for their daughter so when she leaves school the costs won’t take them off guard.
Notes for the future
Then, there’s the retirement fund. “Consider a retirement fund,” she says, “because when you go to India after having a good job here, you must be prepared for the loss of income.
“We have to two homes, one for renting and one to live in so that we can manage even if we don’t want to work at that time.”
But, she says, the best way to save money – is to keep a physical note of it. And so, she keeps bills in envelops. “At the start of the month, we take out specific amounts and keep it in envelops, marking each one, so when we spend money we only take out cash from that envelop. That way if we spend extra on something – for instance, when there is a holiday we go out more – we know exactly what we have spent and can adjust from other budgets,” she says.
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