Money is certainly a powerful tool. Not only do you need it for sustenance and physical well-being, but it is also a requirement for education, investments, entertainment, and many other life aspects. A full-time job is the main, and sometimes the only, source of income for many workers. It is probably not shocking news that the average salary in the Middle East and North Africa (MENA) is dissatisfactory. The Bayt.com Middle East and North Africa Salary Survey, May 2016, revealed that only a small proportion of respondents (4%) claim to have ‘high’ levels of satisfaction with their current salary across the MENA region. Keeping in mind the rising cost of living, saving a portion of your income may be challenging but is certainly possible. Here are a few tips from Bayt.com, the #1 Job site in the Middle East, to help you save more money:
1. Create a budget
For many people, even hearing the word ‘budget’ is stressful. However, personal budgeting does not need an advanced accounting degree. You can create a simple spreadsheet, using excel or Google sheets, to list your financial obligations and the respective amounts. Make sure that the numbers are as accurate as possible and that you have clear categories for your records. We recommend making monthly budget sheets as a yearly budget will not reflect the varying expenses over the months.
2. Allocate for absolute necessities
When you receive your paycheck, the first thing to do is to allocate an amount for your musts. In the budget you created, you should have already listed how much you need to pay for things like rent, utilities, taxes, transportation…etc. Make sure that you put that amount aside and do not be tempted to spend it on non-essentials.
3. Allocate for flexible necessities
We call Items like food, internet, and clothing flexible necessities because their amounts can vary significantly based on preferences and lifestyles. Typically, you should not be spending more than 50% of your income on these items. Your income level will inevitably have an impact on how frequently you eat out, travel, or buy new clothes. Make sure that spending on these items is proportionate to your income. Use the percentage feature on your spreadsheet to determine a spending limit for yourself.
4. Do not make the leftovers your savings
When you are formulating your budget sheet, designate a specific percentage of your income as savings. A realistic proportion is 15% of your income as savings. Make sure that this amount is calculated before you receive and start spending your salary. If you wait until you have spent most of your income and use the leftovers as savings, then most likely you will end up with too little or nothing at all. Over one-third (35%) of the Bayt.com Middle East and North Africa salary survey respondents claim they do not manage to save any of their monthly salary.
5. Designate a budget for emergencies
It is very important that you designate a portion of your income for urgent matters. Things like sickness, accidents, and job dismissal are all highly unpredictable. Do not assume that your savings are you emergency fund. Although you may sometimes need to spend a portion of your savings on emergencies, it is highly recommended that you keep these two items separate.
6. Negotiate a better salary
Realistically speaking if your salary is too low for the average cost of living, you will be highly inclined to deplete your savings. Ask your manager for a raise, but before doing so, make sure to visit the salary search tool from Bayt.com. This way you can have a clear understanding of the average salaries for your job type and location.
