UAE is famously known to be the tax-free haven for anyone who wants to reside in a lavish lifestyle without any forthcoming debts or worries.But has anyone ever thought that this form of lifestyle comes with great responsibility such as debts, billing, over-spending, wasting and so on? Several surveys published recently indicate that despite UAE being a tax-free environment, residents don’t save enough.
Expats living in the UAE earn more than 35,000 per month, ranking them under high-income title according to HSBC Expat Explorer Survey.
Moreover, other survey’s released, puts UAE at the top position for earning high salaries and making an affordable living with it than other expat destinations around the world?
However, according to many expats currently residing here feel that this is not the case with them. Some of the common reasons listed by them were the cost of living, expensive lifestyle, procrastination, loan, education, etc.
How to save?
To avoid living in misery and leaving the UAE broke, or if you have been laid-off due to the recession that is currently in place, we have noted down some of the techniques that you can immediately adopt and define your future financial goals in advance.
- Budget planning – The most important and the hardest part for you, is to set your budget first. Go for a weekly or a monthly plan which ever suits you according to your needs and requirements. The earlier you take control of your budget the less misery you will have to face in the future.
- Simple life – Leading a simple life is an excellent way to save a good amount of money by avoiding numerous temptations waiting for you to grab them in the form of sales, discount or Buy one get one free mode. Always remember that at least 50% or more of your monthly income will be consumed in the form of rent, bills, loans or education fees.
- Expense recording – Making a record of how much you spend helps you to know where you have spent and how much. This in turn lets you find out where and how you can reduce the amount paid.
- Goals – Setting saving goals makes it very easy for you to keep in an efficient manner. Begin by deciding how much time it will take you to save the money for your planned goal, such as emergency fund, retirement fund, vacation, new car, etc.
- Priorities – Different people have different kinds of priorities that they focus on when it comes to saving money. This makes it easier to decide which saving goal is more important to you, as prioritizing helps you choose how long you can wait to fulfill these aims. Always remember that setting priorities helps you in making important choices.
- Banking – Banks are a safe and a secure place to tuck your money away for the future. Saving accounts in the UAE provide significant benefits to the people that utilize them such as protection, investment, high yield and so on. The two most common kinds of savings deposit accounts are recurring deposit and fixed deposit. Recurring deposits earn a low-interest rate/profit compared to fixed deposits, and one needs to invest consistently to build upon their savings and hence is not suitable for everyone. Fixed deposits are more suited for the expats in UAE as it earns a higher rate of interest/profit and requires the investor to invest only once. In fixed deposits the investor invests a lump sum amount of money at once for a particular period and earns interest on the same. The longer you keep, the higher the rate of interest/profit you get.
- Credit cards – As a determined and goal-driven saver, it is advisable for you to avoid having a credit card if you do not wish to collect unnecessary debts. Always keep in mind that most banks in the UAE will cautiously trick you into opting for their card in return for unbelievable cash back, unbeatable discounts or hard to resist offers. If you are unable to pay your bills on the due date, the bank you are dealing with will add an interest rate of approximately 30% or more for your late payment.
Furthermore, if you do require a credit card for certain reasons, always make sure to pay your dues on time every month. Or else, the bank will start adding high interest rate to your bills and your dirhams will just fly right out under your nose.
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