Beating back Januworry: 9 ways to start saving money now

Image credit: Getty Images

The UAE has the sixth-largest number of migrants in the world. A staggering 88 percent of its 10 million people are international migrants, according to Human Rights Watch.

These expatriate workers in the UAE contributed to their home countries more than $47.5bn in 2021, making the UAE the second biggest source of remittances in the world, notes the ILO.

Tying in with this statistic is a survey conducted in 2022 by insurance company Friends Provident International which found that retiring early remains out of reach for many in the workforce, with 45 per cent of residents saying they had not yet started saving for their golden years.

A significant hurdle that many employees and workers face while managing their finances is the lack of awareness of available tools and basic principles to manage their finances, which if available, would help them reduce their debt or save for their retirement years.

In order to improve financial literacy among the UAE’s blue collar work-force, Century Financial, the region’s leading investment services provider collaborated with the University of Dubai and Principles of Responsible Management Education (PRME) to release a finance guide – ‘Financial Freedom for All’.

The guide simplifies financial literacy for blue-collar and front-line workers and aims to equip them with essential financial skills.

Speaking at the unveiling, Bal Krishen, chairman and CEO, Century Financial, said, “The launch of ‘Financial Freedom for All’ marks a pivotal moment in our journey towards empowering every individual in our community.”

“By enhancing financial literacy, we are not only contributing to personal growth but also fostering a more resilient and informed workforce. This aligns perfectly with the ethos of PRME and our commitment to responsible management and education.”

The guide is meant for all but, especially, the low-income or blue collar work-force which comprises up to 60 per cent of the migrant population in the UAE.

Dr Eesa Mohammed Bastaki, president of the University of Dubai, who has written a preface to the guide, noted, “The release of ‘Financial Freedom for All’ is a crucial step in our mission to extend the benefits of education beyond the classroom. We are committed to equipping our community, especially the most vulnerable sections, with the knowledge and skills necessary for financial independence and success.”

Here is a snapshot of the comprehensive guide to saving, budgeting, and investing for a better financial future:

In the pursuit of unlocking wealth-building secrets for blue-collar workers, establishing a robust financial foundation is paramount. The guide lists practical saving strategies designed to empower individuals on their journey to financial success.

1. Embrace budgeting:
Mastering the art of budgeting is the cornerstone of any effective savings strategy.

Create a comprehensive budget that accounts for all income and expenses. Categorise spending, identify areas for potential cutbacks, and allocate a portion of your income to savings. This disciplined approach lays the groundwork for wealth accumulation.

2. Automate savings for consistency considerations
Blue-collar or low-income workers often face unpredictable income streams. Automating savings through direct deposits or automatic transfers ensures consistency. Set up a separate savings account and designate a percentage of your income to be transferred automatically. This ‚pay yourself first‘ mentality helps build a financial cushion over time.

3. Strategic Debt Management
Addressing debt is crucial for wealth building. Prioritize high- interest debts and develop a systematic repayment plan. By minimising interest payments, you free up more funds for savings. This strategic approach to debt management accelerates your journey towards financial independence.

4. Explore employer benefits
Many blue-collar jobs offer employer-sponsored benefits. Take full advantage of these opportunities, such as retirement plans, matching contributions, or employee stock programs. These benefits can significantly boost your wealth-building efforts, providing a valuable supplement to your personal savings.

5. Invest long-term 
While the stock market might seem distant to some blue- collar workers, understanding its potential benefits is crucial. Explore simple investment options and consider consulting a financial advisor. Building a diversified, long-term investment portfolio can unlock substantial wealth over time.

6. Continuous learning and skill enhancement
Investing in yourself is an investment in your financial future. Seek opportunities for skill enhancement and continuous learning within your industry. Acquiring new skills may open doors to higher- paying positions, expanding your income potential and, consequently, your capacity for saving.

7. Emergency fund as a benefits safety net
Create a robust emergency fund to navigate unforeseen financial challenges. Aim for at least three to six months‘ worth of living expenses. This safety net provides peace of mind and prevents unexpected expenses from derailing your long-term savings goals.

8. Real Estate

Explore real estate opportunities as a means of wealth accumulation. While not everyone can afford to purchase property immediately, understanding the real estate market can guide future investment decisions. Consider options like homeownership, real estate crowdfunding, or rental properties as part of a diversified wealth-building strategy.

9. Side income
In addition to your primary job, explore side income ventures that align with your skills and interests. This could include freelancing, consulting, or starting a small business. The extra income generated from these endeavors can be directly channeled into your savings, accelerating your wealth-building journey.

How to save money is a personal journey and one that changes over time, depending on circumstances.

It can be challenging and also rewarding and give you options down the road. The key is paying off debt, creating a solid emergency fund, and carving a path for retirement, even if progress is slow. That way you have more breathing room for life’s unexpected periods.

Also read: UAE’s new end-of-service benefits scheme for employees: Why should you switch?