A Budget Planner that actually works.
With the prevailing low Oil prices and global economic uncertainty, it is important to keep a close tab on your expenses.
This Budget Planner helps you do that with much ease, as it is exclusively prepared for UAE residents. It can help you optimize your income and expenses to facilitate wealth accumulation and financial independence.
How to use the Budget Planner?
To begin with, let us understand the features of this Budget Planner;
It has 2 parts,
- The monthly budget sheets, 12 sheets in all – One for Each month.
- The Summary sheet provides a bird’s eye view of the whole year
The monthly budget sheets are where you can enter your income and expenses. I would recommend that you do the whole year’s budget at one time to get a fair idea of the overall budget.
Once you enter all the relevant information on the 12 monthly sheets, their summary will auto-populate on the summary sheet, providing you a one-page view of your annual budget.
You can always go back and review the budget at the beginning of each month, to make sure it includes expenses you figured out late…
The first step would be to include the monthly Income expected each month for the next 12 months.
All segments have 2 columns, the planned and actual. The “planned” column allows you to set a budget and the “actual” column allows you to record the actual income/expense you made during the particular period.
If you are salaried then you would enter your monthly salary and the average commission if you get some in the particular column. Repeat this for the next 11 months at one go…
If you are Professional, Self Employed or Business Owner, then enter the average monthly income you took home in the last 12 months.
At the end of this exercise, you will know the total money you could make in 2017.
The First Expense
Your first expense from your income should be a saving for yourself. This is very important to succeed financially. By default, the Budget Planner allocates 10% of your income as savings. This allows you to plan all your expense after setting aside the 10% for your future.
Start a regular savings plan, with auto-payments from your bank account every month so that the money is wisely invested.
There are many options with companies like LIC International for capital guaranteed and returns guaranteed saving plans.
You can also choose to invest in international mutual funds via investment plans from Generali, FPI, Oman Insurance and Zurich.
Opening Balance of Cash / Bank
“Balancing your money is the key to having enough.” ― Elizabeth Warren
In this segment, you will begin with entering the opening balance of your bank accounts and the cash you hold. When you add your monthly income to your existing cash/bank balance it helps you understand the total funds available for better cash flow management.
Less Fixed Expenses
In this segment, you must enter the Fixed expenses (which will not change at least for a year) like Rent, School Fees etc…
These are easy to list and budget, as they are unlikely to change quickly.
Make sure all fixed expenses are captured and budgeted for…
At the end of each segment, you can see your net cash flow, making it easy to plan ahead.
I strongly believe, that there is always some room to cut corners here, thanks to the digital subscriptions we signup online and on our smartphones.
At each instance, the amount might look small, but a few of such subscriptions over a long period of time can drain your credit card/bank account.
This is a good place to list and review all your subscriptions including your Gym / Club Membership. If you are really using a particular service for which you are paying a monthly subscription, convert it into the annual mode, it will end up being very cheap.
In the past, I was guilty of paying for digital subscriptions for my blog and on my IOS devices which I was no longer using as much as I would like. When I listed them in this segment, I realized the money I could save by canceling those unwanted subscriptions.
If I need them again, I can always signup for a short period of time.
In this segment, you must list and budget for utilities like DEWA / SEWA / FEWA, Water, Cooking Gas and the Internet. While listing your mobile and internet accounts with Etisalat / DU, list and budget for each account separately. This helps in understanding the trend of spending on each account separately.
On Dewa Online, you can see your consumption trend for this year and the previous 2 years for both Electricity and Water Consumption
This feature will allow you to plan for your annual DEWA bill and reduce consumption by making small changes to your usage.
The DEWA website also has some useful conservation tips, using some of the tips listed there can save you lots of money in the long run.
Food and Groceries
This segment comes second in forcing people to breach their budgets consistently. We will discuss the segment that comes first in the next few paragraphs.
It has immense savings potential when carefully planned and executed. Particularly on eating out / Order from home categories.
Given the trend of Dual income families where both partners are working, it is easy to breach the budget on eating out / Order from home aspects.
A conscious effort and collective accountability will help you create and stick to an effective budget under this segment.
I am not saying that you must totally eliminate eating out / ordering from home; I am only encouraging you to make small but consistent changes in your eating out habits. This can help your purse and your health as well…
The interesting tips on the following links can help you save a lot; while shopping at the Super Market next time;
- 15 Money-Saving Ways to Outsmart Your Supermarket | Kitchn
- My Top 10 Tips for Creating a Grocery Budget (and Sticking to It) | Kitchn
No More Loan Payments
In this segment, you must list all the credit card, car loan, personal loan and mortgage payments you plan to make each month.
Once you have listed the payments it is worth applying the snowball method or any other method of debt elimination to get rid of your debt…
Listing Debt is easy, refraining from borrowing further takes a lot of discipline. Take one step at a time. Target one credit card, stop borrowing on it.
You may do better if you use one of the following apps to manage your Debt effectively
Fewer Transportation Expenses
It is quite difficult to manage without a car in UAE, but managing the car expenses can also be challenging with yearly renewals, fines, parking fees, Salik and regular service/repairs at the dealer or garage.
Even if you don’t have a car, it is easy to ignore the money spent on public transportation while budgeting, thus ending up with a shortfall every month.
It is important to diligently list down all expenses related to car/transportation under this head and make sure it fits into your overall budget well.
Earlier I mentioned about food and grocery being the second cause forcing people to breach their budget, and shopping at the departmental stores comes first.
Everything is on Sale and offers are always tempting. It takes a lot of emotional muscle to develop delayed gratification.
Shopping can be a guilt free bliss if the expenses are kept within the Budget and if you cash for the goods.
it makes total sense to plan and save for shopping of major Electronics / Electrical / Furniture. Don’t be lured by sales and discounts. Budget, and only buy if it is in the budget.
It is essential to budget and provide for shopping of clothes and other personal accessories for at least once in 2 – 3 months for a family of 3 or 4 members.
Birthday’s, Anniversaries or festivals like EID, Diwali or Christmas must be considered while planning the yearly budget, with relevant provisions in those particular months.
More Vacations but Less Debt….
With all those travel selfies filling people timeline’s in the Summer, year end and every possible long weekend it makes budgeting for vacations all the more difficult.
I sometimes feel people in UAE are always packed and ready for travel. Every log weekend or even a 3 day holiday is taken advantage of…
Decide as a family when you would want to travel, depending on your work schedules and plan for vacations both short and long without borrowing, particularly on credit cards.
Personal Care and Beauty
As with Departmental Store expenses, it is wise to plan for Personal Care and Beauty expenses as well. This segment is usually ignored in most budget plans but is an unavoidable expense.
Estimate personal care expenses fairly and provide for each month in your budget, allocate more on months which have important events like birthdays, anniversaries, festivals, vacations, and guests.
Most budget plans also ignore providing for various insurances. Now that ii is mandatory to have medical insurance in Dubai and Abi Dhabi it would be easier if planned properly on a budget.
Also, provide for other insurances like;
- Life / Critical Illness Insurance
- Motor Insurance
- Home and Contents Insurance
- Travel Insurance
Savings and Investments
Usually, people save what is left after paying all expenses. Given the struggling economy and rising inflation very little or nothing remains for saving for major financial goals, hence it is essential to plan and provide for such goals.
Consult a good financial advisor, set up a Personal Financial Plan to understand how and what it will take to achieve your major financial goals like;
- Emergency Savings – If you do not have it already
- Children’s Education
- Property Investment
- Starting a Business
- Immigration to another country
- Financial Independence
Don’t forget Entertainment and Charity
What is life without fun? Plan and provide for an amount in line with your income and overall expenses for the movies, shows, clubbing and other entertainment activities you and your family would want to engage in.
Ignoring this aspect will leave you and your family unhappy or a broken Budget.
Also provide for some Charity every month, because if you give selflessly, it would provide a feeling and fulfillment and happiness.
Rare, Unplanned or Miscellaneous Expenses
Keep some money aside for rare, unplanned and miscellaneous expenses, which do not fall under other heads in this segment.
At the end of the Budget, the closing balance would show you if you are left with or short of money. If your surplus is more than the opening balance, allocate the difference for Charity or any segment like under vacation, shopping or entertainment…
If you are short of money, rebalance your budget, trim the expenses wherever possible. Test and re-test the significance of each expense on the Budget and aim to achieve optimal utilization of your money.
Use the Free Budget Planner Template and take control of your finances. Share the benefits of the Budget Planner with your friends and colleagues.
Let me know if any corrections, additions or developments can be made to the template.