Hello world! 2017 has ended and with new year is coming new dreams, new hopes, new success and new…taxes! Yes, with VAT implementation in the UAE (starting tomorrow!!) a lot of us are worried about how we will manage our expenses. Although 5% is technically negligible, just the idea of giving that additional amount to TAX is a bit scary.
Which means we need to shuffle a few things in life to not just manage but also prosper in 2018!
I’ve been requested by one of my loyal readers to share something about my spending/saving habits and how I manage to not go broke every month but still have fun 🙂 Took me a while to compile this list but I think I’ve covered everything I could suggest if you asked me about saving money. Some of them are common sense and others are a bit more creative. Or extreme. Depends on how you want to look at it.
Perfect time to share it too!
Save something before you spend anything.
You will automatically end up not wasting any money at the end of the month if you put some money aside before you spend a single penny. The amount that you unconsciously spend on irrelevant things has already been deducted from your account.
It will make you sad in the moment but then when you think about that little pot of money you are filling for your future, you will realize it’s all worth it.
Learn to balance.
Going out 4 out of 4 weeks in a month is a recipe for disaster. Majority of the money we spend on the weekends is the money that could potentially be saved. We shouldn’t be surprised that VAT is hitting these luxuries hardest.
So you know you’re broke at the end of the month because you go out all the time, then start by spending only one weekend at home. Clean your house, dig up stuff you no longer need, or just stay in bed watching movies. Do it before you’re forced to do it because you’re broke. The feeling of making that choice yourself is everything.
You can also move to spending two out of four weekends at home if necessary, but there are other ways to spend less.
Mentally separate needs from wants
Building on the previous point, every time I’m in a position to spend money, all I do is ask myself if I need this item or want this item. 80 percent of the time it’s a want. Initially it was difficult for me to not buy the things I wanted (it is going to be difficult for you too) but with time and practice, I have sort of mastered the art (so you will too).
The UAE government has also announced that the middle-class which has the highest expenditure on luxury goods and high-end entertainment services will feel the VAT on their pockets most. There you go, that is all the things you want. Cut down on these.
Another change in my life that pushed me to stop buying unnecessary things was to move toward a healthy lifestyle. Eating healthy allowed me to stop spending on junk that took up my money and also deposited itself in unattractive places in my body. Now I mostly eat things that my body needs rather than what I want to eat. This way I keep expenses of eating useless junk limited and also stay healthy 🙂
Shift your sources of happiness.
Mentally shifting your sources of happiness can have a monumental impact on your spending habits. If eating out, happy hours and theaters make you happy but leave you broke at the end of the month, then it’s time to walk over to the other side.
This side is about movie nights at home, board games, beaches, books and people you love. The faster you shift your focus on the people you’re around versus the things you’re doing, the sooner you will start saving.
I know it’s easier said than done, but it’s possible. And the best part is that you don’t have to pick between the two sides. There’s always a middle ground. That’s where you’ll meet me!
Find the method that works for you.
You will need some dedicated trial and error over a few months to say for sure what method of smart money management works for you. Personally, I see only two ways really.
One is to track every penny and the other is to track none.
Some people prefer tracking every Dirham they spend. One of my friends uses an excel sheet that he updates on the go, you can use that as a starting point if you think tracking works for you.
I’m in the latter club. I don’t track anything I spend but have a general idea of how far down I’ve gone in my monthly balance. While this is hard to digest for my family, this method works really well for me. I had started tracking my spending when I downloaded Wally, but I quickly realized that tracking my spending was not working for me. I ended up panicking about the extra 100 here and a little 200 there. So I went back to tracking nothing. And I am doing just fine.
Ever since I started working, there have been very few instances when I was broke at the end of the month, thanks to finally discovering my saving method.
The most successful money management hack for me is to do point #1 as soon as my salary is credited and then spend money frugally for the rest of the month. Also, I eat out often and with my foolproof restaurant hacks, I save quite a bit.
Take your time
An extra one for motivation.
This definitely does not mean you procrastinate. It means try your best one month and if you fail then try again the next month. It sucks that we need to train our brains to behave and that requires self-control and willpower, but once it’s a habit, then your life is set.
A lot of positive changes in life are more about the attitude and less about the actions. I do not like committing to big things and forcing myself into a good habit. I prefer gracefully walking into it. That is exactly why I’m a fan of building these changes with a disclaimer in mind that this is not an exam and I’m not answerable to anyone but myself. I can take my time and learn it in 15 thousand months if I want to.
You too can be a boss saver if you want to. All you need is to keep asking yourself whether what you’re doing is good for you or is it just making you happy.
And finally, take control of your life and show me how you can save 10% of your income DESPITE the VAT. Best of luck and HAPPY NEW YEAR!