How to: Make your money stretchBack
It’s easy to spend, especially in a city like ours, but it’s also possible to save if you stand back, take stock and make a few small changes to ensure your money starts to work for you.
They say money can’t buy happiness but it can give you peace of mind if you make sensible choices and start to build your savings, safely stored away for a rainy day.
Here are some top tips on maximising your money.
Create a budget
“The best thing to do to keep on top of your finances is to take a little time and look at how much you’re earning and your expenditure each month,” advises Christopher Taylor, CEO at Abu Dhabi Finance.
“Lots of people will spend what they like all month and what they have left, if anything, will be saved, but this isn’t a great approach.
“Forming a budget isn’t too strenuous and it will put you in the best possible position to stay on top of your finances and know exactly how much you have and where it’s going.”
Don’t hide from the facts and figures; be proactive and take the time to understand your financial standing.
Save, save, save
We hate to be the bearer of bad news but you won’t be young forever. The longer you wait to start saving for the future, the harder it will be to build up.
Christopher advises: “A basic guide I would say is to save half of your age in percentage each month, so if you’re 30 you should save at least 15 percent of your wage, and so on. It’s not a perfect system but it’s a good rule of thumb as a rough guide.”
Pay with cash
Paying with plastic might be fantastic and with contactless technology it couldn’t be easier, but be cautious: you could be spending more than you realise.
“We are inclined to pay a lot of things in the UAE using cards and while it is easy you can quickly lose track of how much you are spending,” Christopher says. “Try using cash instead of your card when you go to the supermarket, for example. It’s a good way of tracking exactly how much you spend and when you physically hand over money it feels a bit more real than just using your card.
“A small adjustment like this can help you keep to your budget and avoid any surprises.”
Why not try taking out a set amount of cash for the week and limit yourself to that amount. You’d be surprised how much more tame your spending can be when you’re physically handing over the money and can see how much is slipping through your fingertips.
Cut out nonessential spending
We all like to treat ourselves every now and then, but the point of a treat is that it’s not a regular occurrence. Be sensible, don’t make rash decisions and try limiting yourself to essentials for a month to see how much you can save.
Christopher says: “If a person has a spare AED 5,000 in their account they’re probably thinking of a way they can treat themselves to buying something with the money rather than saving it away.
“There’s always the temptation to go out and spend on items but I would advise that for any big purchase to just give it 24 hours’ thought.
“If you spend a day weighing up the options and considering if you really need the item before going back you will find most of the time people see sense and realise that money would be better off in your savings than being spent frivolously.
“If after 24 hours you still want the item then it’s up to you but waiting one more day before purchasing won’t hurt.”
For more financial advice, visit: adf.ae