For many UAE residents, loans are a fact of life. But that doesn’t mean you need to be stuck with loan repayments for life. Whether you’re paying off a car loan or a home mortgage, a little discipline can go a long way to bringing your finances back into the black and strengthening your credit score. This article offers some quick strategies and suggestions that can help UAE residents meet their loan obligations on time by saving more money.
Creating a budget is the first step to financial prudence. When you know how much money is available to you – and the consequences of overstepping your boundaries – it becomes easier to stay within your limits. Perhaps the most common mistake people make when they take out a loan is not budgeting for those monthly payments alongside outgoings such as utilities, grocery bills, school fees, and other necessities.
Ideally, budget for repayments before you take out the loan. If you already have a loan to your name, take a good look at your current budget to see where you can replace expenses with instalment payments. Draw up a new budget that prioritizes debt repayments. Then call your bank and set up automatic debits so you don’t get charged late fees for missed payments.
Remember to set aside a little extra for sudden or unforeseen expenses when planning your budget.
Our high-consumption lifestyle makes it easy to spend money, particularly when retailers are rolling out unbeatable offers. But upgrading devices or buying luxury items shouldn’t become a regular occurrence. Not only do such purchases siphon away money saved, but also fund an unsustainable lifestyle.
Instead, establish a 48-hour delayed gratification policy to help bypass the purchase trigger until you can assess its impact on your budget. The same rule applies to mobile purchases.
Tempting as it is to shop in a mall, but doing so allows impulse purchases. Bought a pair of shoes because the salesman was friendly? Snagged a new phone case or box of pralines while you were waiting in a queue?
Shops are designed to get you to spend money. Supermarkets, for instance, put expensive items on shelves at eye level in the center of the store, so you often leave with heavy bags when all you went in for was a carton of milk and a loaf of bread.
A good solution is to buy your groceries based on a pre-determined list of weekly essentials, with non-perishables bought in bulk once a month. Defer the purchase of anything that’s not on your list to the following week – no matter how tempting the offer is.
With people from over 200 countries living in the UAE, there are nearly as many restaurant options to order from. The time and effort saved on having your dinner delivered every day takes its toll on your wallet – and on your waist.
Assuming that each meal ordered costs five times the amount spent on the groceries used to prepare that meal. Just ordering out three times a week adds up to a significant amount that can be used to pay down the loan.
Can’t cook? With food videos on every social media platform, why not use the extra time at your disposal to learn a new life skill?
Are you paying for multiple streaming services? Or do you rent space in the cloud for all those duplicate photos on your phone? Chances are that you’re subscribed to numerous different services that are adding up to a hefty amount.
Take a closer look at all your subscriptions and memberships. Re-examine automatic deductions and for each, ask yourself how often do you use the service?
One tip is to go cold turkey and quit everything. Add new services as and when you need them and consider a pay-per-use plan instead. Look to competing brands, too, to benefit from potentially better rates, free trials, and a sense of novelty.
Currently, you don’t need to be in the office every day. Events of the past year have taught us that many jobs that were once considered among the most essential can be done remotely. Do the math: working from home even one extra day a week can save you money: on the commute, on that coffee on the way into work and on lunch at the office.
Consider booking a meeting with your boss to pop the question.
Cutting back on your expenses comes down to planning and discipline. By embracing a mindful approach to spending and by factoring in the occasional indulgence or splurge, you can easily readjust your lifestyle to pay off your loans on schedule.
If these tips hit home or you know someone in the UAE who could benefit from financial prudence, why not share this article with them?
Estate Planning Estate planning is more than advanced financial planning; it’s guaranteeing that your legacy lives on and creates generational wealth. A well-rounded estate plan requires careful planning and attention to detail – whilst planning for all possible future outcomes.
Credit cards offer benefits, convenience and purchasing power… but they require smart credit management to avoid common credit card mistakes. Through responsible credit card use, you will be able to maintain financial stability and make the most from the benefits offered.
How they workScammers pretend to be officers from Citi and will inform you that your credit card has been blocked due to unauthorized transactions. They will ask you to re-activate your card by clicking links in their emails or by providing your card details and One-Time PINs on a fake website.
This article is intended to provide general information about finance and investments and does not replace or should be taken as professional financial advice. The content reflects the view of the author of the article and does not necessarily reflect the views of Citi or its employees, and we do not guarantee the accuracy or completeness of the information presented in the article except information on Citibank N.A. – UAE products referenced herein.
Struggling to pay off your credit card bills? Think about making a credit card balance transfer. When used responsibly, you can settle your outstanding bills with repayment options that suit your needs – while benefiting from lower interest rates and smaller instalments for up to 48 months. What’s not to like?
