Ask the Accounting Community

Almost every aspect of our lives depends on how we manage our finances. In this day and age, it is very difficult to survive without proper financial management. Financial stability does not depend on the size of your paycheck but what you do after earning. The difference between a financially secure person and one who is on the verge of bankruptcy is often about management.

Here are tips on how to improve personal finances

1 .Create and maintain a budget

The first step to improve your financial health is by organizing your finances. Nowadays, there are numerous tools to help you manage your finances both offline and online. Frequently analyse your net worth and keep track of where your money goes. Net worth is the representation of your current financial stand. Normally, your net worth will fluctuate from time to time depending on your income and expenses. Staying up to date with your financial standing will help you evaluate your progress and the areas you will need to improve. The best way to track your finances is by creating and maintaining a budget.

2. Start saving

Saving is one of the most prominent principles of financial literacy. Even if your budget is extremely tight, you should find a way of saving at least every month. It is very important to get into the habit of saving, however small it may be.  Life is full of surprises and you never know which turn it may take. So, it is good to be prepared for the worst at all times.

3. Manage your lifestyle inflation

A trend that is followed by most people is that the more they earn, the more they tend to spend. This is what is known as lifestyle inflation. No matter how much you earn, overspending may damage your long-term saving plans.

4. Differentiate needs and wants

It is very important to draw the line between needs and wants. This will help you make better decisions when spending your money. Needs are the things you must have to survive like shelter and food. However, wants are the desires that do not determine your survival.

If you manage your finances properly, you will be able to invest. There are many investment options in the Dubai real estate market. For instance, Meraas Holdings has several off plan projects in Dubai such as Sur la Mer townhouses, which are offered at affordable prices. Alternatively, you can invest in the numerous apartments for sale in Palm Jumeirah. But before you dream of owning your very own luxury pad in Dubai, make sure you are managing your finances in a sane manner.