Follow these steps and you should keep out of financial difficulty
There has been a recent surge in UAE residents whom are embracing extravagant life styles that their wages cannot support and taking out extreme loans which could put them at risk of long-term debt, the region’s leading financial experts cautioned.
Oil prices have dropped to the lowest rates in decades and regional businesses are facing cutbacks, the slogan for 2016 was ‘responsible spending and many of the emirate’s citizens are determined to spend less and save more. Nonetheless, the lavish lifestyle that many have been enjoying for years makes changing values and actions a lot more difficult.
With property prices at a four year low it is the perfect time to get on to the property ladder, but first your finances need to be in order this means that all debts and personal loans must be reduced. Here are some tips to avoid running into or reduce your debt so you can start your search for villas and properties.
Never underestimate the importance of budgeting, many people will get caught up living a luxurious lifestyle, with many things-to-do, parties, trips, cars etc. To avoid unwanted surprises at the end of the month it is essential to keep track of your income and expenses. A well thought out and planned budget will aid you in keeping track of your finances, make necessary cutbacks and help reach financial goals.
Avoid Credit Cards
Credit card debt is one of the most expensive forms of debt. The two main pitfalls of owning a credit card are firstly not paying the installments on time resulting in being penalized for a late payment and secondly underestimating the seemingly small interest rates (2.99 per cent – 3.25 per cent), when converted to an annual rate, interest rates on credit cards in the UAE are on average 40 per cent.
Use a Savings Account
Most people will already have a savings account, but probably don’t pay regularly into it. If you’re having difficulty to build up your savings, it could be beneficial to compare savings accounts that require a minimum balance. These types of savings accounts will usually pay out higher interest rates.
Dubai is renowned for its love of global fashion brands and many of us end up spending a lot of our time shopping in the malls. Instead of shopping throughout the year, make the majority of your purchases during the Dubai Shopping Festival, where you will find discounted top fashion brands for sale
Downsize Your Car
The UAE’s Insurance Authority has just declared a regulation that sets new minimum premiums for motor insurance. The premiums will differ for every vehicle, but as an example as a result of the new regulation, if you own a SUV, to comprehensively cover it, you’re looking at a minimum of Dh2,000. Consider whether you need an SUV, and perhaps think about downsizing to a saloon car.