It’s taxing to keep a tab of the loans, credit card bills, and utility bills to pay these off timely and avoid incurring any additional charges.
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Building a financially disciplined lifestyle in the early years of economic productivity is the key to long term financial success. The earlier you start earning saving and investing in life, brighter will be your future. It is quite normal for youngsters and new earners to get anxious about their financial future. Early years of economic productivity are ideal for financial planning in Dubai, youngsters should emphasize on saving and investments in this phase of life to achieve faster growth in the future.
Financial planning in Dubai should be started right from the day you receive your first salary as it not only helps to scramble up the capital but helps you to achieve your goals at an accelerated pace. Young earners should keep in mind that financial freedom is not achieved the day you start making money but actually from the day you start planning your expenses and finances.
This article is centered on new earners and we’ll be sharing some important tips on financial planning in Dubai to help them build a corpus.
Assessing and analyzing how much you spend is the first essential step towards budgeting. Financial experts and advisors recommend keeping a track of every transaction you make which eventually will help you to understand your spending pattern. Different applications that are available online free of cost can easily do the job for you.
Once you successfully track your spending pattern you can draft a well-structured budget plan and set limits for different categories. For the majority of new earners, expenses make their way on auto-pilot mode and it becomes almost impossible to keep a systematic track of the expenditure. Monitoring and tracking expenses ensure that you do not spend out of the prescribed limit.
New earners who have started working with an outstanding student loan, it becomes even crucial to start financial planning in Dubai. Although education or student loans have the lowest rates of interest, it is still the real burden. New earners should try and repay the loan first and start investing in investment vehicles later.
According to most of the financial experts buying an insurance plan without dependents is just an unnecessary expense. New earners who are repaying student loans should consider buying insurance with a cover equal to the total amount of loans. Apart from term insurance new earners should focus on buying health insurance plans in the early years of their career because the premium would be lower due to better status of health.
On the priority list of new earners setting up an emergency fund should be first. Life is extremely uncertain and one might encounter the immediate need for money which is difficult to arrange. To ensure you have a backup plan for such situations, you should build up an emergency fund. The primary objective of setting up an emergency fund is to counter situations with ease that might require immediate financial assistance. Typically emergency funds should hold at least six months' worth of expenses.
Most of the young new earners are stuck in the dilemma of deciding where to invest their money. The market today is filled with a wide variety of financial tools that can help you to grow your wealth substantially. If you are a rookie in the world of investments it is advisable you should invest in simpler tools like a savings account or fixed deposits, etc. These investment vehicles are relatively simpler and involve low risks.
New earners should focus on maximizing their income and saving a considerable portion out of the total income which can be later allocated into investments. As a young investor, it is obvious to have doubts in mind and therefore it is logical to get professional advice from financial experts to make sure you are on the right track.