Q: How can I effectively budget in the UAE, given expenses like rent, utilities, schooling, and transportation, and what percentage of my income should ideally go towards each? — Ridhima Pai
Budgets are like diets. You restrict and restrict, you lose 10 pounds, and for a little while, you feel great. But then you get tired of saying no to everything. The rules start to feel suffocating, you slip a little, then a little more, and before you know it, the 10 pounds you lost come back. That’s exactly how budgets work for many people.
So instead of obsessing over a strict budget, I want you to focus on simple principles that are far more powerful.
Live below your means, but within your needs.
Just because you can afford something doesn’t mean you should buy it.
One of the biggest financial traps people fall into is upgrading their lifestyle every time their income increases. The raise comes in, the apartment gets bigger, the car gets nicer, the vacations get more expensive and somehow, despite earning more money, there’s still nothing left at the end of the month.
That’s lifestyle creep.
Living below your means simply means that your spending stays comfortably below what you earn. Your needs for housing, food, utilities, transportation, and insurance are fully covered, but you don’t feel compelled to spend more just because you can.
At some point, you have to ask yourself an important question: When do you buy what you can afford versus what you actually need? If you can afford more than what you need, that’s not a signal to spend more. It’s an opportunity to save and strengthen your financial future.
For the next 60 days, commit to buying needs, not wants.
Before you make a purchase, pause and ask yourself: Is this a need or a want?
A need is something required for your life to function, such as paying rent, buying groceries, and putting gas in your car. A want is everything else: a new outfit you don’t really need, takeout when there’s food at home, the newest phone when your current one works fine.
If it’s a need, of course, you buy it.
If it’s a want, don’t buy it for now.
Get as much pleasure from saving as you do from spending.
Most people feel excitement when they buy something new. But real financial confidence comes when you begin to feel that same excitement from saving.
When you start to see saving not as a sacrifice but as power, something shifts. You stop chasing temporary purchases and start building something far more valuable. This is where you control your money rather than have your money control you.
Source: Khaleej Times