Sticking to a budget is something all UAE residents have to consider, no matter how much they earn. This week, The National’s Money section attended a financial literacy programme for low-income workers in Dubai organised by Western Union. During the session, the financial trainer, Becollan Mageto, detailed the 10 personal finance principles low-income workers should adhere to. But it’s something we could all live by. Here are the 10:
1. Get to know your income before spending
Make sure you know how much your monthly expenses will be before you start splashing the cash.
2. Save first, spend later
Have a budget and then save 10 per cent of your monthly salary somewhere you can’t touch. If you have money leftover at the end of the month, add that to your savings too.
3. Start saving young
If you are below 30, start saving now. Between the ages of 21 to 30, you might want to be generous towards your family. But as you get older, your expenses will increase. You will have your children’s higher education to consider, along with their marriages and any family medical issues. Start young and by the time you retire, you will have enough stashed away to live comfortably.
4. Distinguish between needs and wants
A need is having to eat, and to call your family back home. But if you see an iPhone 6 in the shop – that’s a want, because you can always buy a cheaper model. Before you go to the supermarket, tell yourself ‘I am going to the supermarket because I need to buy these items’ – and stick to that list.
5. Track your income and expenses
Every time you grocery shop, write down how much you spent. Maybe you called some friends - how much did that call cost? Or how much did that taxi fare set up back? At the end of the month, you will then see where you scan reduce your spending. This will help you track your income.
6. Stay within your budget
Stick to this rule and there is no reason for not saving every month.
7. Don’t borrow what you can’t repay
Only borrow what you know you can easily afford to pay back. If you have savings, and an emergency crops up, use those to cover it rather than burdening yourself with debt.
8. Discuss your personal finances with trusted people
If you have savings in the UAE, then it’s important to tell someone you trust - such as a member of your immediate family - that you are saving in such and such an account. But don’t tell a friend here that you have money, particularly if it is stored in your room.
9. Don’t fall for a high-risk scam
If someone tells you ‘I can help you to double your money’ – be very wary. Also don’t trust anyone who tells you ‘give me your money, I will send it to your home country for you’.
10. Invest your savings
As well as emergency cash savings, you need short-term savings which you can put away for one to three years. Tell your bank you have money that you don’t plan to spend for at least a year or two. Tell them you want the money to grow. They may advise depositing it into a long-term savings account. These are called fixed deposits and offer a higher interest rate on your savings.
Read more: This week in our Money section:
■ Money lead: 'Dh100 is enough to buy a month's food'
■ Keren Bobker: Unpaid debt on credit card rules out holiday plans for Dubai resident
■ Money & Me: Egyptian F&B entrepreneur in Dubai is fearless with business investments
■ Nima Abu Wardeh column: Proper parenting comes at a price
pf@thenational.ae
