28 tips to help you leave Dubai rich

1.   Start today

Whether you start big or small, it doesn’t really matter – as long as you start. If you can’t save 10 per cent of your income, begin with just 5 per cent and live off the remaining 95 per cent. Save consistently, even before you pay your monthly bills and debts. Find a way to gradually increase your savings rate to 6 per cent, 7 per cent, 10 per cent, if not more. Ideally, you should put aside 15 to 20 per cent of your savings in an investment fund. What’s important is that you start now, and get into the habit of saving and investing.

2.   Pay yourself first

As soon as you are paid, split the money and put yourself on top of the queue. By paying yourself first, you get the satisfaction of saving something for a rainy day (or your retirement). If your salary gets deposited each month into your bank account, put some of that into a separate account which you won’t use for weekly groceries or personal expenses. You can do a split; say 50/50, 60/40, 70/30, 80/20 per cent for expenses/savings, whichever suits you best. What’s important is that you set a personal target of paying yourself first — and stick to it.

3.   Keep two bank accounts

Have one account for your expenses and have another one for your savings. It's a simple solution, and it’s rather helpful. Splitting the two allows you to keep tabs on your money better. This allows you not only to physically put your money in two places, but know the amount of money you have spent and saved up. Ideally, you should have more in your savings than in your expense account.

4.   Make your money make you more money

If you put aside Dh370 (about $100) per month – the equivalent of a cup of cappuccino a day – throughout your working life and invest it in a fund that earns 8 per cent to 10 per cent per annum, you will be financially independent, with savings of Dh3.7 million ($1 million) by the time you retire, according to “Way to Wealth” author Brian Tracy. Even someone who earns a minimum wage can be a millionaire if he or she consistently saves over the course of his lifetime. Learn how mutual funds, exchange traded funds, trust funds, insurance, 401(k) or "forced savings" plan, and personal investments.

5.   Keep track of your finances

Use a banking app on your phone (if it’s available) where you get a bigger view of your money, keep tabs of your balances, check your transaction history and transfer money in between accounts. Or you can go old school and write it in a book. What’s important is to keep track of how much is going in and going out. Keep track of how much goes where. This allows you to see if you’re overspending, so you can cut back on things and save money.

6.   Save your change

Whether you use a box, a can or a piggy bank, saving loose change is an amazing way to earn extra money. Your 25 or 50 fils or Dh1 coin can seem insignificant, but if you round them up later, you could easily end up with a few hundreds before you know it and then you can buy something you’ve been wanting for yourself or add it to your investment kitty.

7.   Don’t keep money in your wallet

This practice guards against your impulse to buy, especially from stores that still take cash-only payments. If you look into your wallet and know there’s money there, your instinct will tell you to spend it. So if you do find yourself without any cash when you walk into a store, it cuts your impulse to spend. You can’t spend what you don’t have.

8.   Don’t buy a tank

With easy instalment plans and petrol being so cheap, walking into the 4x4 trap is not uncommon. But the amount you will end up paying in monthly instalments for a 4x4 compared to a regular car can work out to a difference of about Dh1,000. And let’s be honest, you just need a set of wheels to get you around from point A to B.

9.   Avoid road tolls

While getting a Salik tag is not very expensive and gives you the option of using Shaikh Zayed Road when necessary, you can avoid using it all the time. Shaikh Mohammad bin Zayed Road and Al Khail Road are as convenient and mostly free-flowing.

10.   Avoid overspending on food

Food is a necessity, but there’s no need to splurge. People tend to buy too much food, stocking their fridge with food that eventually goes straight in the bin. Saving money on food is as easy as preparing your lunch at home, instead of buying lunch at work.

11.   Don’t waste food

If you have ended up buying too much food, don’t throw it away. Improvise. Do what all the Nan’s in the world do… make a pickle. It’ll save you an expense on a day when you’re planning to have some friends over. You don’t have to rush out to Spinneys to buy some over-priced snacks. Slap some of that pickle on crackers and you’re sorted.

12.   Buy quality

Saving doesn’t mean not buying anything at all. When you do buy, go for quality over quantity. When you have a family, buy a quality couch that would stand the onslaughts of growing children. Invest in a nice bed, because you’ll spend a third of your life on it. Buy quality because it actually helps you save money in the long term. It’s the same when buying a car; buy cheap and you’ll end up spending more on repairs and replacements. 

13.   Achieve targets, reward yourself

Even an occasional dinner at a nice place to mark a milestone in your savings plan can be helpful. When you do meet your target, buy yourself something you’ve wanted for a while. Having something that really motivates you helps you stay focused on your goal.

14.   Do not borrow money

Avoid spending money that isn’t yours. Avoid borrowing money from your parents, siblings or friends, although it’s sometimes inevitable. Owing money is not worth buying that thing you want. As far as possible, stay away from credit card debt, as they charge up to 36 per cent a year. If you need to borrow at all, then apply for a personal loan, which in general charges much less than a credit card. Borrowing causes stress, and stress is something you need to avoid.

15.   Shop around

Before buying something you need, shop around for a better price, especially for food, clothes, shoes, cars, and insurance. Just because the supermarket nearest your home is the most convenient, it doesn’t mean it sells the cheapest goods. Shopping can be extremely therapeutic and enjoyable, so instead of looking at it like a task, make a day of it.

16.   Pin it up

Developing a lifelong habit of saving and investing is not easy. It requires will-power and determination. Write down your goal and pin it up so you’re constantly reminded of it. Once this practice locks in and becomes automatic, financial success is virtually guaranteed.

17.   Cut down spending on special occasions

Buying presents is great, but don’t overdo it. Gifts that are well thought out are more appreciated than mindless ones picked on a trip to the mall. Keep your spending down on special occasions – birthdays, anniversaries and holidays such as Christmas. It’s always the thought that counts.

18.   Avoid Credit cards

Credit cards can either be your worst enemy or your best friend. But more often than not, they’re our worst enemy. They give us a false sense of security and allow us to spend money we don’t actually have so it’s best to avoid them. Credit cards also have the highest interest rates out of any borrowing mechanism from a bank. Live within your means and spend only what you have.

19.   Pay your credit cards first

If you do have a credit card the least you can do is to pay them off first and ensure you have zero balance each month. Paying the minimum is a trap as the outstanding balance remains the same. You’re essentially only paying off the interest to the bank if you do that. If you maintain a zero balance, you avoid coughing up to 3 per cent ‘finance charges’ per month, ‘credit shield’ and all other pointless charges. Doing so would allow you to save thousands, each year.

20.   Build an emergency fund

An emergency fund is helpful in case of unexpected misfortune – job loss, accident, death in the family. The rule of thumb here is to have an equivalent of three months of your salary kept aside as an emergency fund and within easy reach.

21.   Don’t buy things on impulse

If you fancy something, wait for 24 hours before buying it. Chances are you will realise you don’t actually want it. If you love window shopping, ignore shopping malls for a while – or altogether -- because window shopping often turns into actual shopping. Don’t allow yourself to be tempted.

22.   Save on utilities

Turn off appliances when they are not in use, switch to energy-saving lights and turn off the air conditioning when you leave the house. Even by placing a water-filled plastic bottle inside an average-size toilet flush tank to displace extra water will result in hundreds of litres of water being saved each month. Don’t let the water run when brushing your teeth, use a glass instead. Avoid taking extended showers or baths. Know when the peak-hour rates apply and avoid using home appliances during that period. Avoid disconnection and reconnection fees by paying your bills on time. All these add up.

23.   Be realistic, even when you get a pay rise

Don’t let a pay rise give you an excuse to upgrade or spike your expenses. Don’t ditch your small sedan for a Porsche just because a neighbour drives one. Don’t move into a nicer, bigger villa just because a friend lives in one. You can’t keep up with the Kardashians and come on, let’s be honest, you really wouldn’t want to.

24.   Keep an eye out for discounts

Take advantage of loyalty programmes that allow you to save points. Make use of discount coupons to buy necessities. These days, most shops have loyalty cards so sign up with hypermarket loyalty programmes that convert your points into cash. 

25.   Never bounce a cheque

Bouncing a cheque in the UAE is a crime. If you use a cheque to pay rent or school fees, make sure they don’t bounce. Otherwise it will cost you dearly in charges, or even land you in legal trouble.

26.   Get adequate insurance

Make sure you and your loved ones get adequate insurance cover. If a medical condition or accident takes you away from work and you end up with a huge medical bill, insurance is a boon. When shopping for insurance, remember that the cheapest isn’t necessarily the best. Read the fine print. Some costs are necessary for your peace of mind if misfortune strikes.

27.   Get Wi-Fi instead of a socket connection

Even though a Wi-Fi connection is more expensive than the regular socket connection, in the long run it will save you more money on your phone bill as you will be using the Wi-Fi to connect to the web rather than using your phone data.

28.   Medicine

Medicine can be expensive. Research home brands of products and shop around at different pharmacies for lower costs. Don't postpone seeing a doctor, or getting regular health checks. Get what you need – your health comes first.