SECTION 4
Now that you know how much you make, where it is coming from, you also know how much you are spending and on what, the next logical step is to create a surplus of income over expenses.
A surplus can be created either by increasing your income or decreasing expenses.
How to increase income?
While you are pursuing your day job, identify opportunities of making an additional income by a part time or a freelance gig.
There are immense opportunities if you lookout, monetize your hobby, passion or expertise.
Read books on how to increase your income, and try to implement the ideas. Some of the books that I would recommend are;
Think and Grow Rich by Napoleon Hill
Get Paid More and Promoted Faster by Brian Tracy
CRUSH IT! by Gary Vaynerchuk.
Visit www.nabbesh.com, create your profile based on your passion, expertise or hobby, also check if any of the projects listed match with your expertise.
Start a blog or write a book, If I can, so do you... Learn Arabic, it will be useful to increase your income
Create a plan to get promoted and to get an increment, implement the plan without delay.
Lookout for opportunities offering higher salary, once you have the offer negotiate with your current employer or move to get a higher salary.
How to Decrease Expenses?
The following are some of the ideas to reduce expenses;
Check if you can find a house with lesser rent than you are now paying, even a saving of AED5000 will go a long way.
If you have a mortgage, renegotiate your mortgage interest rates, if necessary move your mortgage to a bank offering lesser interest rates.
If you have a mortgage of AED 1 Million, one percent reduction in interest rate will save you AED 10,000 a year.
Keep your car for at-least one more year than you would normally do.
If you buy a new car with an EMI of AED 2,000, delaying this purchase for a year will save AED24,000/-
Do not buy a brand new car, look for a well maintained car 3 to 6 months old and buy it, you will get it for much lesser price and with warranty and service contracts.
Check with 3 -4 insurance providers, before buying car insurance, Consolidate credit card debt into a personal loan and do not borrow further.
Plan your travel early to get cheaper air tickets and room rent for your vacation.
If you are a smoker, quit or reduce smoking, it is not only good for your pocket, it is also good for your health.
If you have sustained without smoking for more than 12 months, you can renegotiate your life insurance premiums
Before going for grocery shopping;
Take advantage of the loyalty programs like myclub by Carefour, and Shukran by landmark group.
If used properly these can help you save a lot
Plan your travel to avoid traffic jams.
Maintain your car properly, check air pressure regularly.
Use public transport when possible
Wash and Iron clothes at home as much as possible
Review your mobile plan, home tv and internet plan, gym subscription, newspaper, club membership and all other subscriptions. Reduce or avoid subscription wherever possible
Reduce or avoid eating out, home cooking is not only costs less, it is also good for your health. Drink coffee at home or at work.
Save on utilities like water and electricity, visit www.dewa.gov.ae, for useful conservation tips.
Include your family and friends in the saving spree, motivate each other to spend as less as possible.
Make it a game or a challenge and try to excel each other...
Follow the above listed and many more expense reducing strategies to reduce your expenses at least by 5%.
Assuming that your monthly expenditure is around AED20,000, a 5% reduction will create a surplus of AED1000.
When you invest that AED 1000 per month for a period of 15 years, growing at 8.00%; you can accumulate AED 351,652.06.
Assuming you saved and invested AED 1000 for 26 years, you will have more than One Million dirhams.
If you plan, budget, consciously spend your money and track it effectively, you will be surprised with the amount of savings you can make.
Do whatever necessary and create a surplus, does not matter how small it is at the beginning, keep working at it and slowly you will get better for sure.