If you have made your way into this article, that means you’re already on your way to creating a budget, meaning that you must have some financial ambitions that you want to work to fulfil! For that, I personally congratulate you. It is probably one of the hardest parts to actually accept circumstances and take action towards betterment, and you are already one step ahead. The first step is usually the hardest and it looks like you might already be on the journey to the ease and planning for a budget. If you are creating a budget for the first time, don’t worry. It’s not as hard as it seems and once you get into the habit of doing it, it might just be a cup of tea! Here are some questions you should ask while creating a budget in Dubai.
How much do you have?Make sure you are aware of what is in all of your accounts, including your savings accounts, investments accounts and other financial accounts. Make a note of the interest rates and expenses of each one because it is important for you to know such details. Knowing what you already have makes it’s easier for you to understand how much you need and how you can begin to manage your expenses.
Do you know how much you make?
For some people, this might be a bit is easier than others. Those who run on a salaried paycheck can easily find their monthly income. For hourly employees or those who work in a business where income may rise and fall unpredictably, this can be much more difficult.
The most important consideration, regardless of how you earn your monthly income, is to determine the average monthly amount of income that you receive. A good way to do this, if you receive irregular income, is to average out the last 6 to 12 months of recurring income and use that figure. This can give you a good idea of how much you earn on a yearly basis.
Do you owe any money?In Dubai, you want to make sure you avoid loans as MUCH as possible. It’s not only because of the fact that loans can be quite stressful for an individual and your account but it’s because of the strict laws that come with taking a loan. You need to be extremely confident that you can pay off the debt, otherwise you might be stuck in a money trap problem that might be impossible to get out of.
Average recurring expenses
Sounds a little bit intimidating, doesn’t it? However, there isn’t much need to worry. This can be the hard part for many people, but the easiest way to determine your monthly expenses is to make a stack of household expenses for a month. Make sure you keep your receipts, your utility bills, and any other expense that arises during a one month period, and divide these bills into categories. This is not only beneficial on a superficial basis, but it can allow you to keep a mental track of how much goes out of your account monthly and as a result, you may be able to consciously spend less.
Enter this information into a database
The old school style of budgeting used to be on paper or ledger. Things have significantly changed for the better for all of us new budgeters. Software programs like Microsoft Excel and online budgeting tools have made it much easier to produce the results of your first few steps, and develop an adjustable and sustainable long term budget. In Dubai especially, it’s easy to lose track of earnings and cash flow within your account and you can easily slide into a spree of spending more than you need to for that particular month.
If you don’t have a budget so far and have actually read this article, try to implement some of the suggestions that are presented. It doesn’t hurt or cost much to produce a budget in any sense, life is mostly all about trial and error, isn’t it?
Earn a secondary source of income!
With Smart Crowd, you can build a simple & affordable crowdfunding real estate investments portfolio starting from AED 5,000
