Saturday, 10 August 2013

Tips to save money for a better future

Analyse essential, optional and avoidable expenses
Saving money

Abu Dhabi: Saving is, theoretically, what is left after expenses. But practically it never happens, says K.V. Shamsudheen, chairman of the UAE-based Pravasi Bandhu Welfare Trust, a social organisation for Indian expatriates in the Gulf.

Here are his five tips for saving money:

  1. If you wait to save after meeting all expenses, you can never do it. Set aside at least 20 per cent of your salary as savings as soon as you receive it and spend the remaining amount only. For example, if your salary is Dh10,000, set side at least Dh2,000 before you start spending.

  1. Make a budget for monthly expenses and strictly follow this. Reasonably minimise variable expenses in daily life such as food, electricity and water consumption, etc. You can’t minimise fixed expenses like rent, school fees. o But you can minimise the number of visits to posh restaurants and instead cook at home.

  1. Expatriates remitting money to family back home should help the family prepare a budget for expenses. The family should also be encouraged to save money from the remittances. (Only two per cent of Indian families save money from remittances they receive).

  1. Everyone thinks that he or she doesn’t make any unnecessary expenses. But if you write down your essential, optional and unnecessary expenses every day, the reality may be different. If you do it for 15 days, you can find many unnecessary expenses. Then it will be part of your habit to avoid them.

  1. Convert savings into productive investments in diverse sectors, which should give you a regular income.

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