How To Budget & Save In 2018
The majority of people move to Dubai with plans of saving for the future but the reality of living in the emirate is often much more expensive than planned. And now, with the newly introduced value added tax added to goods and services, most families are starting to feel the pinch with day-to-day living costs going up.
As a general rule, most of the major monthly family expenses are non-VAT-able, which means the overall impact of VAT on the average family should not be as much as five per cent of total household spending, but sassy mamas should be aware that the cost of living is on the increase and therefore conscientious budgeting is even more important than ever before.
We chatted to Paul Callaghan, a Senior Asset Manager at Arlo Associates, who’s given us five realistic budgeting tips to try this year. Good luck, mamas!
Tip One – Track What You’re Spending
We all think we know what we’re spending but more than often we’re all guilty of asking ourselves where our last paycheck went. Therefore with this in mind, track your spending for one month and pay with plastic. This way you can really see how much you’re spending on Careem and Deliveroo, as well as your monthly fixed expenses.
Tip Two – Focus Your Attention On The Areas You Can Make A Difference
Most people overspend in just a few areas. Common areas include eating out, brunching, buying clothes and entertainment. There are certain expenses that are fixed (eg. DEWA, School Fees etc.) and therefore the key is not to get hung up on these and focus on the areas which will make a difference. This way you can make some quick wins and see the results of your saving much quicker. Ask yourself the following questions:
- Are you guilty of trying to keep up with next door?
- Do I want to spend that amount in that area?
- Can I buy these items cheaper from elsewhere?
Read more: How to Relieve Stress, Mama
Tip Three – Save Before You Spend
Treat your savings as a fixed expenditure. This means moving your savings at the beginning of the month so you can’t spend it. Having this approach sees saving as a necessity rather than a luxury. Start small and build from there. Saving for the future should never be at the expense of causing you undue stress for today. Make sure you get the balance right and save the right amount for your family’s future, whilst still enjoying the day-to-day.
Tip Four – Take The 50/20/30 Approach
Try the 50/20/30 Plan championed by US senator Elizabeth Warren (or work to your own percentages to suit your income and lifestyle). For example:
- 50% of income goes to necessities, eg, rent, school fees, DEWA etc.
- 20% to longer term savings, we don’t have a pension scheme here in Dubai so it’s important you save for the future
- 30% to the fun stuff! The things you and your family enjoy doing together which make you feel balanced and happy.
Read more: Pocket Money: When To Start & How To Do It
Tip Five: Use Technology To Make Budgeting Easy
There are loads of apps and tools to make budgeting less tedious. Many of these tools link directly to your bank account and credit cards to automatically, and download / categorise your transactions. Two of my favourites are Buxfer Inc, which is free full online money management tool and PearBudget is a free budgeting program written in excel, and can be used by almost any spreadsheet program.
Most importantly – understand your end goal and keep this in sight. I always recommend writing down your saving goals and being specific but also achievable. Reevaluate your goals once a month to help reinforce the commitment in your mind, and keep you focused on saving for you and your family’s future.
For more information on effective budgeting please contact Paul Callaghan on firstname.lastname@example.org
Read more: 9 Easy Ways To Save Money In Dubai
Featured image sourced via Statesman.