Smartest investment and life plans in UAE

11 Ways to Save Some Dirhams in Dubai

By PolicyBazaar
  | Published: 06 May 2020 | Last Updated On: 20 January 2021

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Smartest investment and life plans in UAE

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If you are a person who is constantly surrounded by simple temptations, your life in the Emirates would not be the easiest one. You won’t even realize when a quick trip to Carrefour converts into a shopping spree at your favourite store.

But, don’t worry, saving a few pennies can help you. All you need to do is exercise the following tips and you will end up saving a sufficient amount of money in no time. 

1. Maintain 2 Bank Accounts

Keep in mind that this part is an absolute necessity. Maintain one account for your expenses and another account for savings. Maintaining 2 bank accounts will make it easier for you to monitor the funds better. This may help you in tracking your spending habits and help you check places where you can go for cost-cutting.

In case you have some funds with you in the account that you have kept for expenses, they can be transferred to the savings account. Ideally, you should have more funds in your savings account as compared to your spending account. Try not to get carried away. Do not touch your savings account unless there is an absolute emergency. 

2. Try to Shop Around

Impulsive shopping is one of the biggest threats to your money. Instead of imposing such a fearful threat on your money, you can first compare prices amongst various websites or stores for making sure you get the best option at the best possible price.

Waiting for at least a day before buying something can help a lot of times. Usually, this timeline helps you in figuring out if the item you are shopping for is really necessary or not. Buying from the sale and using loyalty cards can help you in saving a few bucks. 

3. Why Wait to Start Saving?

As soon as you get your monthly allowance or salary, you should instantly keep a portion of it aside in your savings account. Even if you end up saving only 5% of your income each month, it is an achievement because it is better to have something rather than nothing.

If you start saving your money consistently, then after some time you will have a good amount sitting in your savings account. In case you are impatient about your savings and want to taste your saving objectives faster, you can gradually increase the portion of your income that you save every month. 

4. Leftovers are not always Waste- Try recycling them!

It can get quite boring when you have to eat the same food every day. There may also be many times when you have some leftovers. Instead of throwing them away, you can use them to create a new and different recipe.

For instance, if you have some leftover chicken in the refrigerator, you can use it to make yourself a chicken wrap, chicken salad, chicken soup, chicken pasta, and more. This will help you in saving some pennies that you would otherwise spend on food, reduce the wastage of food, and break the monotony in your recipes. 

5. Public Transport is not as Crazy as they sound

Although planning your schedule around public transport is pretty inconvenient, it’ll help you save money ultimately. Typically public transport is a fraction of the costs of cabs. In case you are using two public transport modes (like bus and metro) in the hour, you will be charged only once.

Moreover, if you hold a personalized Nol card, you will get 50% off. Now, imagine the amount of money you will be saving. And the next best thing is that your carbon footprint also reduces. So it is a win-win situation altogether. 

6. Make saving Change a Habit

Every drop makes an ocean. Let’s see how this saying fits in your saving habits. No matter you use a piggy bank, old wallet, cookie jar, or anything worthy of storage, just start putting your loose change somewhere. AED 2 inside something, 50 fils somewhere, and eventually you will counting dirhams in hundreds. You can add this money to your savings account. 

7. Earn More Money on Your Money

If you keep around AED 370 aside every month (which is equal to what you pay for a cup of coffee per day) across your work life and put that money in an average mutual fund, which earns 8-10% annually, you can be financially independent with a savings of more than AED 3 million at the time of your retirement. This is an estimated figure but the analysis is true.

Even if you are a person who earns an average wage, you can also take your savings to that height by following this course during your work life. Educate yourself about how insurance, trust funds, ETFs, mutual funds, and other such long-term investment functions. 

8. Make Credit Card Debts Payment a Priority

In case you have a credit card, you should always try to pay them off first and make sure you have 0 outstanding balance every month. Clearing only the minimum due amount is a trap because the outstanding balance will remain the same. On paying only the minimum amount, you are essentially just paying the interest amount to the bank.

On the other hand, on maintaining 0 balance, you avoid paying finance charges monthly, credit shield fees, and other such additional charges. This will allow you to save a good amount of dirhams every year. 

9. Proper Management of Finances

You can install a banking mobile app (if it is available). Using the app, you will get a quick view of the money, check your balance, check the transaction history, and transfer funds between the accounts.

If this does not suit you, you can go old school and record everything in a diary or notebook. You need to keep a track of the amount that goes in and goes out. You also need to check what amount goes where. This will also help you keep a check on your overspending so that you can back on unnecessary things and save more. 

10. Emergency Fund is Essential

In case of an unexpected and unfortunate event such as death within the family, accident, or loss of employment, emergency funds are a life savour. The thumb rule to follow for this kind of savings is having an amount equal to 3 months of your income kept aside in the form of an emergency fund. These funds should be within your reach so that you can use them whenever an emergency strikes. 

11. Make Goals and Objectives

It is important to develop a habit of saving and investment, which lasts throughout your life. Such a habit involves determination and willpower. Write your objectives and put them up on your desk or wall so that you are reminded about it constantly. As soon as this practice is locked in and it becomes organic, your financial success is almost guaranteed virtually. 

In a Nutshell!

All of us want to consume. Living in the Emirates, this need for consumption just magnifies as soon as you pass a fancy shopping destination.

If you have kids, then the outrageous education fees will add up to this. Therefore, you already do not have a huge amount to save but the little that you do, you should not end up spending mindlessly on things that attract you just like moths to flames.

Stop and think! It’s time to rationalize. Once you get a hold of it, you are all set to save money. These money-saving tips will help you live a luxurious yet “within budget” life in the UAE.