It’s not about how much money you make.
It’s about how much money you save.
Saving money isn’t easy. Add to that the ever increasing cost of food, gas, rent and basic needs, the concept of saving pretty much becomes impossible. I know it’s tough and a tad overwhelming. And I also know that everyone wants to live a little. Heck, I live by that adage. There’s this line I read somewhere –
Most people save for a rainy day that will never come.
Having said that it is important to save. Please don’t go by what people say when it comes to savings. Some people live by the 80/20 rule, some live by the 50/30/20 rule. Honestly, I don’t follow other people’s saving methods blindly because only I know the kind of lifestyle/expenses I have money needed to fund it.

Here are couple of simply ways I follow to save money:
1. Open a supplementary bank account
I have a corporate account with ADCB and they have this amazing online facility that lets you open a sub-account in your name. No forms. No submissions. You just do it online and the account is up and running in minutes. Every month I have set up a standing instruction that transfers a certain amount of money from my main account to my supplementary account. This is particularly helpful because it does 1 of 2 things
– It prevents me from splurging the transferred money on unnecessary things – It helps me collect money for an upcoming big payment. For eg: Most of us here have quarterly rental checks. Hypothetically speaking, you have to pay your landlord $8000 per quarter, set up a standing instruction to transfer $ 2000 per month from your main account to your sub account. At the end of 4 months you would’ve collected 8k.
The best part is the service is completely free with no hidden charges. And you can create as many supplementary accounts you need in AED or USD. You can pretty much have one account for different budget groups. One account for RENT , another account for a car downpayment and so and so forth. I know this sounds ridiculously simple, but I’ve found this method really helps me save and ensure I’m not falling short of funds for fixed expenses. I’m sure most banks have this facility, so why not use it, eh?
2. If you have a credit card, pay in full. Better still use your debit card to make purchases online and offline.
For the longest time, I refused to get a credit card. Simply because of the ghastly credit card debt stories I had heard of. Having said that once I started travelling oversees years ago, owning a credit card became a necessity.
There are two things I did when I got my credit card:
1. I reduced the credit limit to less than my salary. This prevented me from over-splurging and even when I did I was able to pay the credit card payment in full since the total didn’t exceed my monthly salary.
2. I set up auto-debit which essentially meant my credit card was paid up in full every month. It is very easy to fall into the minimum payment trap but AVOID IT AT ALL COSTS. As a rule do not pay interest on anything that doesn’t give you returns in the future.
Tip – The good thing now is that you can use your debit card to pay for both online and offline purchases. I use my debit card for the most part and it helps because I only end up paying for thing with money that I have. My credit card is only used in times of desperate times when I am short of cash in my bank account.
3. If you like something, wait for a month before you purchase it
Most of us are impulse shoppers. We see something we like and immediately want to get our hands on it. And once we do, we have 5 minutes of gratification before we move onto the next impulse buy. It is a vicious consumerism cycle and best stopped to help you save.
When I like something, I wait for a month before I purchase it. Why? Because usually in a month’s time I would’ve either forgotten about the item or would’ve moved on to another object of my affection.
4. Look for deals online
I love getting my nails done. I hate paying an exorbitant amount for it. Also, I hate compromising on the quality of the service and hygienic conditions of the salon. I know that sounds impossible but I’ve gotten all of that and most via online coupon deals like Groupon or Cobone. There are tons of offers on beauty services online at salons and in hotels. All you have to do it log on to the sites and check for the best deals. Before you buy a coupon, google review them by searching for the salon and go through the reviews to see if you like it or not.
5. Restrict eating out to 2 or 3 meals a week
Most people love food, me included. Is it me or does food just generally taste better when it gets delivered to your house or you’re eating it out in a restaurant. Don’t get me wrong, I love home-cooked food just as much but there are several pluses to eating out, starting out with the variety of options out there. I can’t stop it. So I simply restrict it to 2 or 3 meals a week. Limiting outside food not only impacts my healthy positively but also reduces the strain on my wallet. If you absolutely must eat out more often, look up deals on the gazillion food delivery sites you have in the country and opt for protein-dense deals – they’ll not only keep you fuller for longer but also prevent you from ordering again and thus add a couple of extra pennies to your savings.
6. Avoid buying stuff in bulk just because there’s a sale
Promotions and sales are great but only on things you absolutely must have. For eg: I have 2 dogs, so whenever I see a big discount on the dog food brand I feed them, I buy it in bulk. Same rule applies to long term perishables/non-perishables like rice, pulses, condiments, tea, coffee, home care products etc. There are things you eat/use regularly so it makes sense to buy them in bulk. Ask yourself if you absolutely need it and if you will use it for the next couple of months. If you’ve answered yes to both, then go for it. Often we end up buying things on offer that sadly go to waste and in the hope of saving, you end up wasting money on stuff you didn’t need in the first place.
7. Shop wisely
Most of us shop at a supermarket that is closest to our homes. Out of sheer convenience. And rightly so. The store also because the only one we will end up going to, out of sheer habit.
The issue is that the same product is priced differently in different stores. If there’s a consumer good or food item you purchase on a regular basis, it’s best to buy the product from multiple stores around your home to see where it is priced the cheapest. Sometime it would be worthwhile to venture to another store a little away from your home and shop there. You’ll be surprised with the discrepancies in prices and how much you will be able to save with a little effort by venturing outside your comfort zone.
8. Track your expenses
Yes, It is a bit cumbersome but Im not asking you to account for every penny you save. But keep in mind you’ll only be working for a stipulated period in your lifetime and the last thing you want to do, is look back and wonder where all the money you earned over the years went.
Here’s what I do every month. I follow the 50/30/20 budget rule popularized by Elizabeth Warren and split my expenses in 3 main tiers and use the supplementary bank accounts explained in point 1, to store the 3 budgeted amounts). If you have multiple sources of incomes, you can add the amount to your monthly net salary.
Tier 1 – Fixed expenses (Rent, EMI, Insurance premiums, fuel, groceries, utility bills). These are set expenses that you have to mandatorily pay every month for survival. Fixed expenses should account for no more than 50% of your monthly net salary. Needless to say, if your fixed expenses are less than 50% then you should move the extra saved income to tier 3. For eg; if your monthly net salary is $10,000, then your fixed expenses should not be more $5000 per month. If your fixed expenses are less than $5000 then the savings ($5000 minus actual fixed expenses) should be transferred to the bank account that has Tier 3’s budget.
Tier 2 – Variable expenses/Needs These are non-fixed expenses and change every month depending on your lifestyle. Eating out, movie or concert tickets, vacations, clothes, massages, spas, Netflix/Spotify/Cable subscriptions. The best to check your variable expenses is to print out your monthly debit and credit card statements and highlight the line items that fall into this category. Sometimes, we think we haven’t spent enough till we actually see the numbers staring in our faces. So it’s good to have a reality check now and then. Look out for ‘splurges’ or miscellaneous expenses that you could’ve avoided. Sometimes our cards are on auto-debit and you don’t even realize that you’re paying for a service that you no longer use so best to check your statements every month.
Tip – I’ve personally found that I spend a considerable amount of money on my phone internet plan. It was about 13GB per month for $68 which was ridiculous, considering I have internet at home and at the office. Once my contract ended, the first thing I did was to disconnect the plan and opt for a cheaper one.
Variable expenses are things that you splurge on that make life enjoyable and should account for 30% or less of your monthly net salary. It’s only fair to splurge a little on yourself – I mean what’s the point in earning and living frugally if you can’t enjoy the money you work so hard for. But you also shouldn’t let you splurges eat into your savings. Balance is good. Greed isn’t.
Tier 3 – Savings Any savings from Tier 1 and 2 and 20% of your monthly salary constitute this tier. Best to invest this month in a fixed deposit scheme, mutual fund policy or transferred to an account in your home country or another local bank account, hoard it in a savings account, invest in real estimate or stocks, mutuals funds and bonds. Lock it up, for all I care as long as YOU DON’T SPEND IT. All I say is there’s no one size fits all.
Tip: Don’t be a blind follower when it comes to investments. Invest in things you understand and actually believe in. I’m not sure about you, but I can’t hand over my hard earned savings to some stranger (AKA broker) and expect him to do the best he can with the money that I’ve earned. It like no one will clean your house better than you do.
To know if your investment is worthwhile, ensure it is beating inflation. If not, hoard your savings in a bank account and invest in a scheme that will give you good returns i.e. beat inflation. Take advice from people who have successfully invested their money. I always ask my friends and peers what they do with their savings. You’ll be surprised how forthcoming people are with information.