UAE Savings Guide: How To Save More Of Your Salary With The 50/30/20 Rule

With UAE workers benefitting from earning a tax-free income, it’s vital that expats take advantage of this opportunity to bolster their savings.

Leading weekly business website Arabianbusiness.com recently spoke with Mike Coady of the multi-award winning Skybound Wealth to discuss the 50/30/20 savings rule first popularised by former Harvard Law professor Elizabeth Warren in more detail.

Applicable to almost all income groups, this savings rule follows a 3-step strategy:

1. 50 percent of your income for needs
2. 30 percent of your income for wants
3. 20 percent of your income for savings

Mike Coady, a financial adviser in the UAE with over 25 years’ experience in the financial industry, told Arabian Business:

‍“This rule isn’t just a budgeting formula; it’s all about balancing life’s necessities, pleasures, and future security. In the UAE, where lifestyle temptations never stop, it’s crucial to embrace this rule (or similar) not as a constraint but as a guide to mindful spending and saving.

For example, considering the high cost of living in Dubai or Abu Dhabi etc., allocating 50 percent to essentials might mean making smarter housing choices or opting for more cost-effective transportation,”

Coady also stressed on the importance of saving in the UAE as an expat, as this helps in tracking one’s current financial situation, as well as their future financial needs.

“Effective budgeting requires more than just tracking expenses; it involves forecasting future financial needs and goals. This foresight allows you to adjust your spending and saving habits accordingly. Knowing your numbers – your income, fixed costs, variable expenses, and financial commitments – is critical. It empowers you to make informed decisions, anticipate challenges, and adjust your financial plan proactively to stay on track with your goals.”

A Host Of Opportunities

Being an international expatriate opens up a whole host of offshore wealth management solutions that allow you to maximise both your returns and tax efficiency. However, it’s important to have professional advice to guide you in this process.

How Can Skybound Wealth Help You?

All our financial planners are experienced in the complexities of international financial advice, and as a firm we are regulated locally in every jurisdiction where we have a physical presence. To provide you with the right solution, our experts seek to understand your goals, assess your attitude to risk, consider the relevant jurisdictions’ regulations, where your expat journey might take you next, and talk to you about your timeframe for investing. We do the work to make sure you achieve your desired outcome from your offshore investment.

Award Winning Advice

Skybound Wealth were delighted to receive seven awards across three jurisdictions in the latest International Adviser Best Practice Awards, including Best Adviser Firm – Middle East.

Sponsored by Morningstar and designed to recognise, showcase and celebrate achievements in embedding best practice within every aspect of a business, from front-line advice to client relationship management, the awards are seen as a benchmark for quality within the financial planning industry.