6 steps to saving money in the UAE

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Step three: Put away ten percent
This is a small enough amount to not really miss. If you had to take a 10 percent pay cut, you’d not be happy but you’d cope. Living in the UAE also means we don’t pay income tax or contribute to a company pension plan, so instantly you are saving around 40 percent of your salary. But that also means the onus is on you to plan for your future – no one else will do it for you.

Step four: Forget about student debt
Student debt is one of the cheapest loans you’ll ever get; the interest rate is often very small so the debt will not build up quickly. Pay off the minimum required and, with the impact of inflation, the amount will erode away over time. Saving, however, will provide a much higher rate of return in comparison.

Step five: Avoid all credit cards
Do not get into credit-card debt. It can build quickly and the interest alone is money wasted. Spend only what you have in your account after you’ve put your savings away and you’ll be a wealthy person one day.

Step six: Be patient
The financial markets have given great returns since time began – over the long term. So, ignore the daily, weekly and even yearly shifts. Also, the process of “dollar-cost averaging” means when the markets are down, your savings buy more units, when they’re up, your pot is worth more. As long as you save every month, you’ll win either way.

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