Principles Of Saving Money

There’s a good reason why Franklin Delano Roosevelt said: “It is an unfortunate human failing that a full pocketbook often groans more loudly than an empty stomach.” We live in a consumer-driven era in which we are motivated and rewarded for spending our hard-earned money. While we may enjoy the pleasures, services and prestige of being able to pay for nice things, we often forget how these fulfilments burden our pockets at the end of the month and in the long term.

To quote another true legend, Thomas Jefferson said: “Never spend your money before you have it”, which is most likely the best money-saving tip any of the great men in history could have shared with us. In principle, it is possible to be in charge of your money matters as long as you understand three key principles namely: budgeting, discipline and simply spending less.


Saving money starts with understanding what’s happening with your money. Yes, the objective is to save, but it needs to be well-structured and quantified. Only when you put together the sources of cash, only then you have a comprehensive view of what’s happening with your money. It also gives you clarity and sets your expectations in terms of how much can you practically save over a period of time. There is no point in being delusional then subsequently falling short of the expectations. Understand the different sources, amount and timing of where the money is coming from and where it is going. Make sure you provision for unexpected costs that come from nowhere.

If you are married, the budget should be developed together to ensure there is a collective buy-in to reach the objective as a family. Consensus of both halves of a partnership is very important to save money.

Once you have created a picture of where your money goes in a typical month, then you can identify the trends and problem areas.


After understanding your potential to save, you need to set aside the savings amount as if you are paying a bill. Open a savings account or start an automatic saver plan and discipline yourself to deposit the amount every single month. Since you have no choice but to pay your monthly bills, your savings amount must be treated the same way. More importantly, the savings should be deposited at the start of the month before you even have a chance to spend it. You will see that your money has grown, like magic, over time.

Spend less

As common as it sounds, it is the most traditional yet effective way to save. You simply cannot spend more than you earn. By spending more using some source of borrowed money, you are actually spending more by paying interest. This borrowing accumulates really quickly and before you know you have accumulated more debt than you can manage. It’s then a painful exercise for a long period of time just to get rid of it.

While the UAE offers tax-free income and an enjoyable lifestyle, it is very easy to become complacent with your own financial status and lose control of spiralling debts and uncontrollable credit card and personal loan payments. Saving money doesn’t mean you need to cut out enjoying the finer things in life like dining out, travelling and other recreational activities. Simply look out for opportunities where you can save a dirham or two … as a single dirham can easily be turned around into a smart savings plan.

There are many ways to cut spending. Here are 10 simple examples on how to cut your costs:

1. Clear your most expensive debts first to avoid paying unnecessary interest on your credit card

2. Compare any financial products online to get the best deal on rates whether it’s for a mortgage, credit card or car loan

3. Reduce telephone bills by using cheaper options for international calling

4. Avoid parking and speeding fines

5. Reduce transportation costs through car pooling or public transportation

6. Say “no” to avoidable expenses

7. Avoid costly days or evenings out by seeking promotional deals through deal-sharing websites or two-for-one vouchers

8. Encourage the habit of saving within the entire household

9. Use the free rewards programmes offered along with credit cards

10. Deposit funds every month in a savings plan

Culled from by Mohit Malhotra

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