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Even the simple act of sharing your daily taxi from the Marina to the DIFC can save you Dh12,000 a year.

By Richard Hextall Special to Gulf News
Published: May 08, 2009, 23:07

Look after the fills and the Dirhams will look after themselves.

As the dust settles on the most significant economic downturn in living memory, we need to learn from recent events. The first lesson we can draw is that in this brave new world there are very few certainties, especially when it comes to personal finance.

In the last six months people around the world have found themselves unexpectedly unemployed and buried under debt which they can't afford to maintain let alone pay off.

No amount of optimism can change the fact that a cushion of savings is the only real way to soften the blow of an unforeseen event, whether it be unemployment or an unexpected outgoing.

Now is the moment to take stock, to rein in unnecessary expenditure, to factor saving into a weekly or monthly budget and to stockpile for the future.

In the past the importance of saving was drummed into people by their parents, but in recent years we have stopped saving and become a society of borrowers.

The best means of ensuring you are saving is to factor it into your monthly budget to ensure that saving is not a solitary act but a habit.

Remember, no need to make huge sacrifices but by intelligently culling the unnecessary expenditures that we so often take for granted you can safeguard your future.

So how do you do this? Sit down with someone who understands money who can help you work through your income and expenses as well as how much you can save.

Remember its not an "all or nothing" situation - saving a small amount each month will quickly add up. If you feel that you need guidance, banks have relationship managers specifically to talk through saving and expenditures with all their clients.

It is a process that can start immediately by reducing unnecessary expenses, such as dining out or car washes, and saving the money instead.

For example, even the simple act of sharing your daily taxi from the Marina to the DIFC can save you Dh12,000 a year.

If your expenses decrease, for example when you pay off a car loan, try to set the entire amount aside for savings.

Most importantly, you need to find a savings product that works for you. Look for a high interest rate so the more you save, the more you earn and ensure the account enables easy access.

If you like to save regularly, you could transfer a fixed amount at the start of every month, just after you've been paid, by setting up a standing order from your current account. Or just keep it flexible and transfer what's left over at the end of each month.

Whatever you choose to do with your money and wherever you invest it, in 2009 saving, should become one of your regular habits.

The writer is head of personal banking, Lloyds TSB Middle East, Dubai.

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