Tips to Manage Your Hard-Earned Dirhams More Efficiently

The United Arab Emirates (UAE) has become a major draw for job seekers who are willing to leverage the Emirate’s industrial growth, large number of job creation, and the tax-free higher salaries. Moving overseas for work means adventure, new opportunities, travel and challenges. Failing to manage the financial aspects of life and taking on unnecessary debts is a common mistake made by many expats. Therefore, when heading to the UAE or other popular job destinations, managing your finances becomes the key to leading a successful expat life.

Moving away from your home country to live and work in the UAE is exciting yet a daunting prospect for expats. Suppose if you earn Dh15, 000 per month and left with no money by the end of every month, this is actually not something that you have had planned for yourself! Well, this is a sad story of many UAE expats who come with dreams of making more money only to end up bearing debts. Therefore, to help the UAE expats managing their hard-earned Dirhams, here are a few tips to stay financially fit:

1. Access your current financial health

Working out your net worth is the first logical step towards assessing your current financial health. For this, make a realistic estimate of the value of your assets such as investments, pension plan (if any), bank accounts, car or jewelry. Next, calculate what you owe to others, such as personal loan, credit card balance and mortgage debt. Now, calculate your net worth by subtracting your liabilities from assets. The number that you get is what you should monitor at regular intervals and consider in your future financial planning.

2. Maintain and follow a budget

Maintaining a monthly budget helps to monitor whether you earn more than what you spend, where your finances are actually moving and even how much more could you save. To set a budget, check the difference between your income and total expenses, and assess what you “actually need” and what is just “nice to have”. Of course, there are certain needs (expenses) that no one can avoid, such as travel, food and other utilities, but expenses like holidays and club memberships are things that can definitely be put on hold for some time.

3. Build an emergency fund

Anyone can meet a contingency anytime, such as long illness, business loss, additional responsibilities, or losing a job. These unforeseen situations become more critical when you are living and working abroad. Therefore, creating an emergency fund can help you prepare for seeing any such emergencies. For this, you can make an extra effort to save every Dirham possible during the initial stage of creating the fund. Later, maintaining this fund becomes comparatively easier. However, make sure that you are not tempted to take even a single penny from this fund for your daily expenses. Sticking to this rule can help you enhance your fund effectively.

4. Create a right investment strategy

In order to manage your finances, following the right investment strategy plays a key role in meeting your financial goals during the later stage of life. Investing in the right options and at the right time involves efforts and knowledge. Hence, if you find it difficult to manage investments, it is ideal to take advice from a professional adviser or even a friend who can help you allocate your funds effectively.

5. Clear and avoid expensive debts

We all wish to lead a debt-free life, which is possible if we can understand and clear our expensive debts as soon as possible. Therefore, it is imperative to identify expensive bad debts such as unauthorized bank overdrafts, credit card debts or other unsecured loans. Prioritize clearing such debts to avoid missing several repayments that attract interest charges.

Other Do’s and Don’ts

• Make a habit to at least save around 10 to 20 percent of your income.
• Diversify risk by investing in various options instead of ‘putting all eggs in a single basket’.
• Do not hesitate to consult professional financial advisors.
• Monitor your expenses on a regular basis to set your financial goals.

Life is about maintaining a balance. It all depends on an expat how he/she enjoys the stay in the UAE by finding a balance between lifestyle and financial plan. Following a proper strategy helps to earn and save Dirhams, and builds a healthier relationship with all your financial affairs.

Good luck.

Author Bio –

Swati Srivastava is an avid writer with a keen interest on the extensive domain of job search and career counselling. Currently associated with Naukrigulf.com, her articles are published on several reputed job search portals and online career magazines. Follow her on Google+, Twitter

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Article Name

Tips to Manage Your Hard-Earned Dirhams More Efficiently

Description

The United Arab Emirates (UAE) has become a major draw for job seekers who are willing to leverage the Emirate’s industrial growth, large number of job creation, and the tax-free higher salaries.

Author

Swati Srivastava

Publisher Name

GCC Exchange

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