Living in the UAE is a blessing in life. It is a country with a global outlook and a modern way of life, while perfectly preserving its history and culture. It offers tremendous opportunities to both residents and expats, and has an array of housing, education, work and recreation opportunities. The standard of living is quite high in the country, and it is fully digital in its operations, whether personal or professional.
As a person living in the UAE, how do you spend and use your income? You must be judicious with it, because it can get expensive living here if you are not careful with your money. These are 3 ways to use your money here:
#1 Leave out cash, use a credit card in the UAE.
One of the smartest ways to spend is to dispense with cash entirely. Using cash in a digital age makes hardly any fiscal sense. Firstly, you need to go to an ATM to get it. Secondly, you cannot keep track of loose change, and cash does not leave a trail like plastic money does. Spending cash is hardly worthwhile when you are watching your budget. Meanwhile, using a credit card in the UAE is one of the best ways to spend money. The card leaves a digital trail with every single transaction, so you are aware of your exact spends and where your money goes. This helps you put curbs on unnecessary spending. Besides, using a credit card in the UAE, especially when it comes from a leading bank, has its share of reward points, discounts and unique experiences. The card gives you access to international airport lounges and concierge services, while you can redeem the points later and enjoy discounts at different merchant outlets.
#2 Don’t spend on eating out or shopping – buy insurance.
You might be tempted to spend as much as you can on shopping, eating, travelling often, and enjoying life by yourself and with your loved ones. But think about the future as well – will these spends help you build wealth? Will they protect your income in your absence? If you answered ‘No’ to both questions, then it is time for a rethink on what you spend on. We recommend protecting your future and your loved ones from financial uncertainty with rock solid life and health insurance plans. Insurance helps you create a safety net for future fiscal shocks so that your loved ones are protected whether you are present or not. Please buy sufficient coverage such that your family’s lifestyle can continue as before even in your absence. The insurance money should be able to pay spousal support, children’s education, urgent medical expenses, unpaid debt, household maintenance, etc.
#3 Invest in an early retirement. Gone are the days when people waited to be 50 or 60 years old to retire. Today, many young professionals aim to retire by age 40 or 45, but this is easier said than done for most. Retiring early means that you stop an active income mid-way and live out the rest of your life on money accrued from savings, investments, retirement plans, etc. You may not enjoy a pension if you retire before the designated age, so you must fall back on your own reserves. Consult a financial planner to know which investments will work on both the short- and long-term to create a big retirement corpus for you. You must set your retirement age and how much AED you will need to live out the rest of your life, and work backwards from there. Having a separate savings account for your post-retirement spends is a good starting point.