Young Professionals | Saving | Purchasing a Car | Education | Planning a Trip | Starting up your own business | Budgeting | Spending | Banking Guidelines
Young professionals face fresh challenges as they enter the job market and start the exciting journey towards developing their careers, adapting to the real world and learning to be independent. A big part of this journey to becoming responsible adults is financial independence.
As a young professional, you have to deal with all bills, payments and expenses; that task is not an easy feat. Trial and error is the basis for learning how to budget your finances, but this could be costly. Here are some tips to help you so that you can avoid some common mistakes.
First thing’s first: saving is essential for any young professional. You have to learn how to set aside a certain amount of money from your monthly salary in order to be able to afford items you need. Learning how to be an efficient saver will help whether you intend to buy a car, plan a summer getaway, continue your education or even start your own business.
One of the popular saving instruments is a savings account. Unlike a current account, this tool allows you to receive annual interest on your money. Bonds can also be used as a saving instrument. Bonds basically allow you to lend a fixed amount of money for a predetermined amount of time to a bank or other institution. Terms for bonds differ, but all bonds entail the repayment of the full amount of the capital placed after completing the specified time (usually referred to as maturity rate) with additional interest rates according to fixed intervals. You can choose to invest in bonds at both national and international banks.
Your car is one of the most important purchases you will be making. With so many options, price ranges and brands out there, it is important that you take the time to research the market properly and find the car that best suits you both in terms of your preferences and affordability.
First, you need to determine your price range. Make sure that your car is within the limits that you will be able to afford in addition to the other expenses you have such as rent and bills. Research the market really well, and take your time before buying your car. Visit the different car dealerships and compare prices. Remember that the asking price of the car does not include other costs such as insurance and licensing.
After enquiring about the features and facilities of the car, it is also a good idea to ask about the resale value of the vehicle to be better aware of its worth. Other issues to keep in mind include maintenance and repair costs and how much you will need to pay for spare parts.
You might decide to take a car loan in order to finance your vehicle, which is a good option if it is managed, researched, and budgeted correctly. Make sure you study the market well and are aware of the different rates and options banks offer.
Guidelines when applying for a car loan:
Car Loan Comparison Table
Your car insurance is another crucial aspect of your purchase, as you cannot register your car in the UAE without it. Often, when budgeting for a car, some people forget to include insurance fees as part of the cost of the vehicle. However, although it involves a steady payment, quality car insurance can save you a lot of money in case of an accident. Therefore, it is important to be selective when deciding which insurance company you want to deal with.
Continuing your education is the best kind of investment you can make because you are investing in yourself. Obtaining higher degrees also contributes to advancing your career and provides the opportunity of being offered higher salary ranges. When considering studying for a degree, search for available scholarship funds. The government offers many scholarships for UAE nationals who want to continue their studies in the country or abroad. Many organizations and companies also sponsor individuals who wish to continue their education as well. You might also want to check if the university offers a payment plan that will allow you to pay over a period of time rather than coming up with the full amount at the start of the program.
When planning for a trip locally or abroad, there are many things you can do to save yourself some extra cash. For instance, rather than booking your flight through an agent, you can book it online and receive cheaper rates. Also, when booking a ticket for a vacation, make sure you do so well ahead of time. The longer you wait, the more costly your trip may become as last minute bookings cost much higher.
You might want to start your own business sometime in the future. This will require planning and saving so that you can have some of your own equity in the business. You need to research what type of business you would like to have, taking market needs into consideration. Innovation is always a plus when thinking of new business concepts. Ask around and try to find out what types of services or items people need or are missing from the market. And even if it is not a new product or service, think of ways in which you can differentiate your business from the competition.
There are many aspects you need to consider before you start your new business. Most importantly, you need to decide how you are going to finance your business. Research and collect information on the different services that are available to help you get started – funding, training marketing etc. are available from different agencies and institutions. You have to consider how much of your own money you will put into the business and whether you will involve any partners in your venture. You can also apply for business loans to aid you in financing your project.
If you decide to apply for a business loan, make sure you decide how much you need before applying. Furthermore, research the different lenders available to you, and it would also help if you can have legal advice on the loan stipulations.
To learn more about the different agencies that support entrepreneurs and to get inspiration from other young Emirati entrepreneurs, visit the AKOUN website: https://www.adced.ae/akoun/
Quick Business Finance tips:
Careful planning is an integral part of managing your income as you start to make your own money. You need to balance the amount you make with the amount you spend in order to avoid debt and other unfavourable situations.
An effective way of making a budget for your monthly expenses is by listing all the essential costs that you have every month such as the amount you want to save, phone bills, electric bills, rent, car payments, etc. You then need to calculate how much you will have leftover for your other expenses.
It is also advisable that you save a certain amount every month from your income, in order to be able to afford things that you cannot immediately purchase. Furthermore, it is crucial to have some money set aside in case of unexpected emergencies.
Young Professionals Expenses
Young Professionals Budget
The golden rule is that you should not spend more than you earn. At the beginning of your career, you need to be able to learn how to prioritize and manage your expenditures according to the monthly income you receive. But as you progress in your career and make more money, you will be able to indulge in more extravagant items. There are so many areas in your daily life where wise spending tips will provide you with significant savings over a period of time.
Be a smart shopper
Banks offer many services and products to customers. It is crucial to become familiar with all these features, conditions and penalties. Deciding what type of account you would like to open and which bank you would like to deal with depends on a number of variables. You need to find the bank that is right for you.
A credit card is different from a debit card. Credit cards allow you to borrow money, which you do not possess, from the bank up to a certain limit. If you pay off the outstanding balance on your credit card before the due date, you will not be required to pay any interest. As a rule of thumb, the longer you take, the more you will pay. Once you reach your limit, you can no longer use your card until you repay some of your debt.
There are different categories of cards you can acquire, which differ in benefits, credit range and interest rates. The first category is standard cards, which most people own. Prestige cards such as silver, gold and platinum cards, usually offer a higher credit limit and lower interest.
Features of credit cards differ from one bank to another. There is no uniform set of rules for these cards and you need to ensure that you fully understand the features you can enjoy before applying for the category you want.
Online shopping credit cards are used solely for one purpose, and thereby allow you to keep personal information retaining to your main bank account safe. Furthermore, many banks offer temporary credit online shopping cards that provide high level of security to protect you from hackers.
Credit card tips:
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