Salaried professionals must be deft with their financial planning – there is no room for error or wasteful expenditure. The family’s needs depend on your income, and one misstep can set your collective goals in jeopardy. Every salaried professional must maximise their income to benefit their financial goals in the most optimum way possible.
Don’t know where to begin your financial planning from? This article presents 3 money habits that you must inculcate, if you already haven’t. They will help you tick off your future dreams and stay true to your financial roadmap. They are:
#1 Save, save, save!
Saving money is the most fundamental financial habit to inculcate, and it always pays richly. The more you save, the more you have in the bank account as a nest egg for future needs. Savings help you stay the course for your future dreams, provided you inculcate discipline to not spend the savings on trivial things. Create a separate bank account for your savings, and do not withdraw from it unless you wish to invest the corpus for greater returns. The moment you receive your salary, set aside a portion of it in the savings account. It could be as little as AED 100 per month, and you can increase it every few months once you are certain of your monthly expenses. Over the course of one year, you can accrue a lot of money in the account. When it reaches a certain threshold, say AED 1000, you can invest it in a good instrument and increase the corpus size.
#2 Use a credit card instead of cash.
A credit card is a must for salaried professionals looking to keep their spending in check. Does this sound like an oxymoron? Usually, people equate credit card spending with reckless financial behaviour. But if you are careful with your spending and take only the best one with several benefits – points on shopping, travel, eating out, or even lounge offers on credit cards – you can spend within your means and even save money in the long run. Even a single benefit like lounge offers can help you enjoy the best of experiences and save money by redeeming your previous points or getting discounts. Besides, the credit card secures you from online theft and hacking attempts. If you are afraid of overshooting your credit limit, you can set a lower limit by discussing your options with your bank. Always be sure to repay your card bills on time and credit card loans as well – this saves you from paying interest, and helps build good credit.
#3 Make regular investments.
A salaried professional only has their income to fall back on. The trick in creating wealth lies is in making your money work for you even when you don’t. This can happen only when you invest your money in suitable instruments that grow wealth commensurate with your future milestones. There are a number of good investment options to explore in the UAE, such as fixed maturity plans, equity derivatives, recurring and fixed deposits, liquid funds and gold investments, to name a few. Another important investment to make is insurance. Get life and health insurance to protect your loved ones from future financial uncertainty. Health insurance is mandatory in the UAE, so you can select a suitable plan that offers good benefits and covers the entire family. As a salaried professional, you have umpteen demands on your income which exponentially increase with the size of your family. Having the right financial habits will help you utilise your income and create wealth, too.