UAE offers host of benefits to residents, including Tax Free Living, Cultural Diversity, Amazing Food, Career Opportunities and a very exciting lifestyle. But some of us, unfortunately, are unable to make the most of this life here in UAE, and the reason to that is DEBT. This is exactly why most expats who arrive in UAE to make Money, end up going back to home with less than what they arrived with. This article will outline key steps to avoid the DEBT and live the life that allows more freedom, enjoyment and happiness.
According to a recent Gulf News report, the debt level raised up to 7.5% last year in UAE, including the unpaid credit card balances, auto-loans, and other various types of loans easily available here in UAE. Scarier is the fact that on average each resident carries a Debt burden of 42,600 AED.
Most of the debts are actually the result of resident’s lack of discipline and financial knowledge. Seriously, do you really need that V8 or the latest Mercedes Benz to commute to work through the crazy traffic jams? And what exactly does that latest iPhone do that the previous one couldn’t to fulfil your daily requirements? We need to be honest with ourselves, do we really need all those functionalities, I can bet, 90% of the iPhone owners don’t even know how many functions their phone actually has.
So here is the 6 simple steps that we MUST incorporate in our lives to ensure that we can enjoy our lives the way we want to:
1. CASH is KING
Go few years back, your grandparents used to have those envelopes that they had their money in, properly budgeted and distributed for each purpose, rent, electricity, food, etc. If they didn’t have money to do anything that month, they would wait for the next month, instead of swapping their cards or looking for yet another loan to fulfill their desires. So, use cash everywhere, stop using Credit Cards, and if there is anything you desire, but can’t afford, wait until you can!
2. Pay Yourself First
By paying yourself first, I mean, put some money aside for yourself right at the start of the month. This can be for saving, entertainment or anything for that matter. This will build a sense of financial security for you and will ensure you have funds in hand in case of an emergency comes your way.
3. 2nd Income Source
This is critical and a sad reality. Most of us, do absolutely nothing after our 9-5 Job. We sit on our sofas, watch TV and movies. Can’t we put in more effort in our free time to make a bit more money?
4. “CONTROL” Your Desires
The major problem with most of the people suffering from the Debt problem, is they spend more than they earn, and hence they have to use Credit Cards by the end of the month to fulfill all their desires. It can be hard, but if we want to live a Debt Free life, that is more enjoyable, we need to control what we desire for and ensure that we don’t over spend on things that are not “needed” but only “desired”.
5. Stay Away from Plastic
You have to either stop using Credit Cards at all, or at least use it only when it is “absolutely necessary”. And when you do, you MUST to ensure that you pay off all the balance the same month. Otherwise you will get into the spiral of Debt and it will be really hard to get out of it once you are there. Keep in mind, banks are not your friends, they are here to keep you in Debt, as that’s how they make money.
6. Seek Support from Friends & Family Instead of Banks
Last but not the least, in case of an emergency, instead of running towards the bank and seek yet another loan, try to seek help from your family or friends, as it might be a much better option both financially and emotionally.