At some point or the other we all have pondered over where we are going wrong with our money. The search for the answer always boils down to making bad choices and excuses for not sticking to our budgets and financial plans. Here are some few real life stories, suggestions and tips of UAE residents making decisions with their money. You would be surprised how much your mind and your emotions impact your financial decisions and often creates a pattern on how we manage our money.
Fighting temptation
“I can’t resist when I want something”, Sameena, mother of two kids explains. “It doesn’t always have to be something expensive but simple things too such as the idea of getting coffee and croissant in the morning. Until I don’t buy it, it annoys me” Sameena goes on to add, “Such a small eating habit costs me an average of AED 460 a month. Therefore, it’s not just about paying attention to your big spends but also your small temptations which add up.”
The visiting family dilemma
Many of us moved here from our home countries. As a result, our friends and family from back home visit us constantly especially if you have a big family. You can’t blame them either. However this also means unexpected costs we have to incur. Jumana a working mother explains, “my family and friends visit me all the time especially during the holiday season. Its great being the host but this also means that when I go out with them, I end up paying the whole bill as I feel bad. I now budget in these costs in my financial plan for the year to avoid any surprises.”
The emotional shopper
It’s not just women who are familiar with emotional shopping but men as well. Anish who recently moved here couple of years ago has been a victim of such form of spending. “I lived in India my whole life and when I moved here, during festive season I would get home sick. To make myself feel better, I would end up spending money on things I didn’t need and reminded me of home such as handmade, Indian, embroidered cushion covers. I now avoid malls during festive season and make my wife do all our holiday shopping.”
Spending before earning
It’s a common mistake that many of us suffer from. Many of us spend the money we do not have yet but we know is coming and as a result end up spending more. As Ernest, a single businessman puts it, “I recently opened up a new office and got carried away with decorating it. I didn’t even realize that I was spending all this money before the business was even cashflow generating. It was easy to put it all on the credit card. My advice as a business owner is first buy the essentials and slowly build upon decorating your office as your business starts to generate some profits.”
Taking time for granted
People keep saying that time is every fleeting, yet that realization never sticks in our minds. Before we know it, years have passed and we have saved little from our income. Take the example of Sara, a twenty something working for a couple years. As she states, “after graduating I was excited to make my own money and have the financial freedom to buy things I wanted. But before I knew it years passed and I saved almost nothing. When people around me started talking about paying for their weddings or financial investments they had made, I realized I was well behind in the race to save for my retirement or big life events. Now I have learned to control my urges to spend and save a pre decided amount every month.”
Listen to people around you, and how they have used or abused their income. There are some valuable lessons to learn especially with regards to your surroundings. In fact paying attention to people who are bad with their money will give you some insight on how not to make the same mistake as them.