Posted by admin on 02/23/2016

How to budget monthly income in Dubai

Living carefully can leave you enough to enjoy Dubai and save up for a good future as well


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Often expats find themselves struggling to make ends meet, let alone save for retirement despite earning tax-free salaries





Tax-free income may not always leave you enough to save or send back home unless you know how to live carefully amidst a lot of expenses. 


1. Saving

Many expats find saving money one of the hardest things to do. The best way to save is as soon as you receive your income transfer a portion to a savings account. Most banks have the option to automatically transfer a set figure of your income into a saving scheme established within your account.


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Save at least 10 per cent of your income before you start off your expenses for the month. Automate this using your bank’s services.


2. Rent

According to various sources, at least 40 per cent of our income in Dubai goes towards rent and utilities (DEWA). If you are paying more than this, you might need to reconsider your living arrangements. Studios and one-bedroom apartments are the most common living choices for smaller families while bachelors tend to opt for shared accommodation, which in some cases can be over-crowded and illegal.


Value for money


Spend no more than 40 per cent of your total income for rent and utilities. 


3. Transport

Owning a car in Dubai is easier and more affordable than some countries. However when you add parking charges, maintenance, and traffic jams, taking a car everywhere might not be the best option. The metro connects most areas of the city and this is often a sensible choice once you compare the fuel, parking and time costs.

If you use the car a lot, consider taking RTA parking cards instead of temporary vouchers. The two types are: A (annual fee - Dh2500) and B (annual - Dh1500). You can get cards on a three, six or 12 month basis.

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With a Type A card, you can park anywhere in Dubai except the fish market in Deira and Tecom area. Type B card holders can only park in areas marked as B parking. You can use one card for up to three cars as long as their license numbers are shown on the card.


If you are spending more than 10 per cent of your income on transport related expenses, revise your options.


4. Credit cards

You do not need to have more than one credit card. The more credit cards you have, the more the false sense of purchasing power. Paying back your minimum balance of credit card bills can mean almost 70-80 per cent in financial service fees charged by the banks, bringing no reduction to the principal amount.

Use cash or your debit card wherever possible which will put a limit on how much you can purchase. If you use a credit card solely for regular shopping like groceries, automate complete repayment in the same month. Request from your bank a lifetime-free credit card which has no annual renewal fees.

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Have a rule to not use your credit card for purchases below Dh1,000 and if you do so, request for no-interest installment payment schemes.


5. Meals

Lunch from your company canteen and nearby restaurants is not necessary if you can whip up a cold salad of vegetables and chicken, eggs or fish for lunch. Cook dinner at home and take the leftovers for lunch the following day.

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The options are easy and endless. Expat bachelors can opt for pre-set meals where a hotel or restaurant offers breakfast and lunch meals daily for discounted monthly rates. An average rate for lunch and dinner through hotels on a monthly basis comes at around Dh250-Dh300.


The best time to cook is the weekend, keeping food frozen which can then be heated up as and when required.


6. Dining out

With the variety of dining options available in Dubai, it is easy to order in or dine out every single day. This will add significantly to your monthly food expenses as well as your quota of weight and health related issues. Try local eateries which offer great food at reasonable prices. Watch out for the Guides list of reasonable restaurants that offer great food.

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Spending more than 10 per cent of your income on eating out is not a wise option. Dine out only once in a fortnight or once in a week.




7. Grocery shopping

A lot of grocery shops and supermarkets have offers running at some time or another. Get a shopping card for your nearest supermarket which is free and will give you access to great deals.

Buy your fish from the local fish markets rather than supermarkets to get fresh produce at great rates.

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This budget does not take into account your dine-outs or cost of organic products and imported food produce.

You can cover your food shopping expenses with not more than 15 per cent of your monthly income.


8. School fees


School fees continue to be one of the biggest expenses for many residents. In many cases, expats leave their children in their home countries because they can't afford basic school fees. Fees can range from Dh12,000 to Dh80,000 on an annual basis across various grades and curriculums.

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If not covered by employers, paying above 15 per cent of your monthly income on school fees can cripple you in the long run.


9. Airplane tickets


Most families go on their vacations as per school schedules while new parents, couples and bachelors have no such restriction. Most ticketing websites offer seasonal promotions or limited deals which you can take advantage of in case you have a fixed vacation plan every year.

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Try online booking as much as possible and scour for coupon codes that can take up to 15 per cent off your total bill. While booking flights, check all merchant sites as well as official airline sites.

Plan your vacations well in advance and fly on non-peak days of the week. Try changing your landing destination in the UAE to avail better deals. 


10. Impulse shopping


Making every purchase with a question of needing versus wanting can help control impulse shopping to a great extent. While this should be the case, an occasional shopping treat is an indulgence everyone deserves. Do not whip out your credit card for un-planned purchases.

Walk into any store or shop with an idea of what you intend to buy and if something catches your eye, always choose what you need over what you want. 




Article Source : www.gulfnews.com







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