Budgeting explained: Tips for living in the UAE on a salary of Dh 10,000

Vijay Valecha, Gulf News, July 5, 2024

As cost of living goes up, managing expenses on a Dh10,000 monthly salary can be a challenging endeavor. However, with astute budgeting and lifestyle adjustments, individuals can not only survive but also enjoy the perks of living in a vibrant country like the UAE.

The UAE has attracted a diverse population with its tax-free salaries and a plethora of job opportunities. However, the ‘living’ comes with a price tag, and for those earning a modest income, it's essential to adopt a budget-conscious lifestyle. “Budgeting is a vital condition of financial management, especially when you're working with a limited income,” said Rania Edward, Financial Director of a leading multinational firm in the UAE.

In order to budget accurately, prioritisation of expenses is a crucial initial step. The two major categories would be needs and wants; adding to that, everyone can agree that needs are basic survival necessities, such as rent, groceries, utilities, and transportation, any other form of spending can be categorised as discretionary. A simple yet common recommendation of budgeting is following the 50/30/20 rule, which was founded by Elizabeth Warren, a senior US Senator from Massachusetts and renowned expert in bankruptcy law.

Warren proposed that the best way to budget is to allocate 50 per cent of your income to your needs, 30 per cent of your income to your wants, and 20 per cent of your income to your savings

Housing/Utilities: The biggest expense

Rent is typically the most significant monthly expense for UAE residents and can quickly devour a significant portion of your income. Edward suggests that on a budget of Dh10,000, it is best not to allocate more than 30 per cent of your income to rent and not more than 10 per cent to utilities; “finding roommates to split the costs of rent and utilities, looking for more affordable neighborhoods” are all suggestions to securing lower rent

Vijay Valecha Chief Investment Officer of global financial markets company, Century Financial said that utilities, including electricity, water, and internet, can vary based on usage and provider.

This limits options to studio or one-bedroom apartments in communities such as Deira, Bur Dubai,Discovery Gardens and International City, where rents are more affordable.

Transportation: Getting around

Having a car might not be cost friendly, with expenses such as rent/finance, petrol, and insurance. Fortunately, Dubai's public transportation system, including the metro, buses, and taxis, is efficient andcan be a cost-effective alternative to owning a car. A monthly Nol card, which can be used acrossvarious modes of transport, costs around Dh300, depending on the zones travelled. Carpooling or ride sharing services with colleagues can also immensely reduce transportation costs

Food: Smart grocery shopping and dining

When it comes to food expenses, shopping at local supermarkets and preparing meals at home cansignificantly cut costs. Budget supermarkets offer weekly promotions that can help save on groceries. Dining out frequently can quickly drain finances, but the UAE also offers a variety of affordable eateries and food courts that cater to its diverse population. Setting a monthly limit for dining out and taking advantage of lunch specials or discount apps can help keep this luxury within reach.

Lifestyle and entertainment

The UAE boasts a wealth of entertainment options, from beaches and parks to malls and cinemas.Many of these amenities can be enjoyed for free or at a minimal cost. Public beaches, parks withnominal entry fees, and community events offer ample opportunities for leisure without breaking the bank. “A great way to save money is to minimise on paying entry fees. Lots of places in Dubai offer free accessto attractions or alternate views, for example, free public beaches provide stunning views and sunnyvibes for nothing at all. There are lots of deals on websites and apps, which lists hundreds of 2-for-1discounts at restaurants, spas and more,” added Edward For the fitness fanatics, you can find very affordable gym memberships starting from Dh120 for a basicpackage.

Source

Gulf News