The extraordinary global events of 2020 have rocked budgets, sapped savings and frustrated fiscal aspirations.
But with the calendar clicking towards 2021, the new year presents an opportunity to review personal finances and re-assess savings and spending goals.
Three experts who regularly contribute to these pages offer some tips framed by a pandemic-tainted year that has shaken many and prompted plenty to re-examine their financial strategies.
Should we give our finances a new year spring clean?
Ambareen Musa, founder and chief executive of souqalmal.com, says there's no better time to take stock of where you stand financially, starting with a thorough review of your budget and expenses.
She suggests a few questions to start this exercise, such as whether you managed your expenses reasonably well in 2020, exceeded budget limits or met your savings goals.
“Once you figure out where you stand, list your expenses and tweak your budget so you can use your income more effectively,” says Ms Musa.
“Set your priorities with the most basic outgoings at the top – such as mortgage/rent, utilities and phone bills, groceries, school fees and minimum credit card payments.”
Once you have these covered, Ms Musa suggests moving on to saving towards your “rainy day fund for unexpected expenses”.
“With whatever income you have left over, use your own judgement when allocating it towards ‘wants’ versus making extra payments towards your debt or setting aside a higher amount towards your savings pool.”
For many, resetting and taking control of their financial situation in 2021 is more important than ever, says Carol Glynn, founder of Conscious Finance Coaching.
That includes budgeting, which she feels is all about clarity and awareness rather than something restrictive, shameful or self-critical.
“When it’s viewed and approached with that restrictive, strict and cut-back mindset, it’s similar to a detox diet,” she says.
“For me, budgeting is about knowing what you have, where you are spending, saving and earning.
“It provides tangible, real information to help you make informed decisions about what you want to do with your money, how you spend your time and the direction you want to take in your life.
“It’s a positive exercise, the purpose of which is to help reduce stress and worry, not increase it.”
Ms Glynn describes the process and its outcome as “an enabler to a better relationship with your money”, leading to informed decisions, more confidence and more enjoyment from your cash and life.
Budgeting is about knowing what you have, where you are spending, saving and earning
“What better time to start this positive habit than the start of a new year,” she adds.
One thing should be clear, however, is that none of us know what 2021 will bring, according to Steve Cronin, SimplyFI board member and founder of expat personal finance education website DeadSimpleSaving.com.
“There is light at the end of the tunnel, but we can’t see how long the tunnel is,” he says. “This makes planning more important than ever – and it needn’t be tedious.”
Mr Cronin recommends assessing your current financial situation, namely cash and investments anywhere in the world, loans and interest rates, all your income and a reasonable understanding of your expenses by major category.
Mr Cronin asks: “Did anything work out well? Did you make any mistakes or face unexpected problems? Did you rely too much on a bank, financial adviser or partner to take control of the finances without you understanding what they were doing and charging you?”
Setting financial goals for 2021
We should understand our personal values – as well as our goals, says Ms Glynn.
“It helps you understand what is important to you … what your ambitions, dreams and hopes are. Then, setting goals is much easier.”
Ms Glynn suggests documenting three goals, why you want to achieve each and what’s required, how you’ll measure progress, anticipated obstacles and how to overcome them.
“Best of all, write down something you will reward yourself with when you achieve that goal,” she adds.
Ms Musa says now is a good time to go through your savings, investments, loans and credit cards with a fine-toothed comb – and figure out how to boost your capacity to save in 2021.
Set your priorities with the most basic outgoings at the top – such as mortgage/rent, utilities and phone bills, groceries, school fees and minimum credit card payments
Cash can then be stowed in a separate savings account, a high-yield fixed deposit, or by remitting money back home in pursuit of higher returns.
“Review your credit card reward statement to see if the rewards outshine the annual fee,” she recommends, with a view to finding alternative cards with better rewards.
And with interest rates hitting new lows, Ms Musa suggests considering loan buyouts and mortgage refinancing.
“Compare interest rates across different banks to see if you can switch over or convince your existing lender to cut you a better deal,” she says.
Should we take more risk to recoup 2020 deficits?
There’s nothing worse than trying to catch up with your goals by taking more risk if you’ve lost money through bad investments, says Mr Cronin.
“There is a big risk that you will lose even more,” he warns.
“We see this particularly with people near retirement losing money in savings plans – they then take more risk and put themselves in a very vulnerable position.
“Instead, you should focus on earning more, spending less and investing more, but investing it very sensibly in a global stock fund and a global bond fund.”
2020 saw emerging asset classes and platforms, including cryptocurrency, peer-to-peer lending and property crowdfunding, gain ground in some portfolios.
Again, Mr Cronin sounds a note of caution.
“Chasing what is fashionable at the start of the year is a great way to lose money by the end of the year,” he says.
“If you must scratch the itch of investing in the latest high-growth opportunities, limit the total to 10 per cent of your portfolio. Have fun with that – Tesla, Bitcoin, whatever – but make sure if it bombs, it doesn’t derail your future.
If you must scratch the itch of investing in the latest high-growth opportunities, limit the total to 10 per cent of your portfolio
“Feel free to take a gamble, but don’t bet the house … these may not be the investments we are talking about warmly at the end of 2021.”
Lessons for 2021
Many personal finance experts highlight an emergency fund – at least six months' expenses in bank accounts, spread between the UAE and elsewhere.
Ask yourself whether you have a financial safety net so you and your family are protected for a period of time should you lose your job, need to suddenly move overseas or have a large unexpected financial burden, says Ms Glynn.
“If not, then decide how many months of expenses you need to set aside to provide this security and add it to your financial goals.”
Having a cash buffer got many people through 2020 when they lost their job or took a big pay cut due to Covid-19, says Mr Cronin.
“It will help you sleep at night, even during the roughest personal and global crises,” he says, while encouraging us to learn in 2021 how to take control of our money and invest sensibly.
“It takes much less time than you think.”
Taking a good look at our personal and domestic finance habits, approaches and aspirations after such a turbulent year makes considerable sense.
Reviewing, decluttering and reorganising those finances now could lead to us being in better financial shape next year, Ms Musa says .
“Spring cleaning your finances can not only help you better manage your money but also unlock completely new savings avenues,” she says.
“You can cancel unnecessary subscriptions, do away with expensive memberships, and sell stuff you don’t need.”
By simply re-prioritising and repaying debts more systematically, you could also save significantly on interest payments.
“There’s a lot you can do to be in a better financial position to prepare for uncertainties in the near future,” she adds.
The Voice of Hind Rajab
Starring: Saja Kilani, Clara Khoury, Motaz Malhees
Director: Kaouther Ben Hania
Rating: 4/5
Evacuations to France hit by controversy
- Over 500 Gazans have been evacuated to France since November 2023
- Evacuations were paused after a student already in France posted anti-Semitic content and was subsequently expelled to Qatar
- The Foreign Ministry launched a review to determine how authorities failed to detect the posts before her entry
- Artists and researchers fall under a programme called Pause that began in 2017
- It has benefited more than 700 people from 44 countries, including Syria, Turkey, Iran, and Sudan
- Since the start of the Gaza war, it has also included 45 Gazan beneficiaries
- Unlike students, they are allowed to bring their families to France
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
Killing of Qassem Suleimani
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Mohammed bin Zayed Majlis
KILLING OF QASSEM SULEIMANI
Zayed Sustainability Prize
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
UAE currency: the story behind the money in your pockets
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
Mohammed bin Zayed Majlis
Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
- Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
- Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
UAE currency: the story behind the money in your pockets
The years Ramadan fell in May
Getting there
The flights
Emirates and Etihad fly to Johannesburg or Cape Town daily. Flights cost from about Dh3,325, with a flying time of 8hours and 15 minutes. From there, fly South African Airlines or Air Namibia to Namibia’s Windhoek Hosea Kutako International Airport, for about Dh850. Flying time is 2 hours.
The stay
Wilderness Little Kulala offers stays from £460 (Dh2,135) per person, per night. It is one of seven Wilderness Safari lodges in Namibia; www.wilderness-safaris.com.
Skeleton Coast Safaris’ four-day adventure involves joining a very small group in a private plane, flying to some of the remotest areas in the world, with each night spent at a different camp. It costs from US$8,335.30 (Dh30,611); www.skeletoncoastsafaris.com
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
More on animal trafficking
Killing of Qassem Suleimani
Killing of Qassem Suleimani
Mohammed bin Zayed Majlis
The years Ramadan fell in May
England Test squad
Joe Root (captain), Moeen Ali, James Anderson, Jonny Bairstow (wicketkeeper), Stuart Broad, Jos Buttler, Alastair Cook, Sam Curran, Keaton Jennings, Dawid Malan, Jamie Porter, Adil Rashid, Ben Stokes.
The alternatives
• Founded in 2014, Telr is a payment aggregator and gateway with an office in Silicon Oasis. It’s e-commerce entry plan costs Dh349 monthly (plus VAT). QR codes direct customers to an online payment page and merchants can generate payments through messaging apps.
• Business Bay’s Pallapay claims 40,000-plus active merchants who can invoice customers and receive payment by card. Fees range from 1.99 per cent plus Dh1 per transaction depending on payment method and location, such as online or via UAE mobile.
• Tap started in May 2013 in Kuwait, allowing Middle East businesses to bill, accept, receive and make payments online “easier, faster and smoother” via goSell and goCollect. It supports more than 10,000 merchants. Monthly fees range from US$65-100, plus card charges of 2.75-3.75 per cent and Dh1.2 per sale.
• 2checkout’s “all-in-one payment gateway and merchant account” accepts payments in 200-plus markets for 2.4-3.9 per cent, plus a Dh1.2-Dh1.8 currency conversion charge. The US provider processes online shop and mobile transactions and has 17,000-plus active digital commerce users.
• PayPal is probably the best-known online goods payment method - usually used for eBay purchases - but can be used to receive funds, providing everyone’s signed up. Costs from 2.9 per cent plus Dh1.2 per transaction.
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
if you go
The flights
Fly direct to Kutaisi with Flydubai from Dh925 return, including taxes. The flight takes 3.5 hours. From there, Svaneti is a four-hour drive. The driving time from Tbilisi is eight hours.
The trip
The cost of the Svaneti trip is US$2,000 (Dh7,345) for 10 days, including food, guiding, accommodation and transfers from and to Tbilisi or Kutaisi. This summer the TCT is also offering a 5-day hike in Armenia for $1,200 (Dh4,407) per person. For further information, visit www.transcaucasiantrail.org/en/hike/
Killing of Qassem Suleimani
The five pillars of Islam
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
More on Quran memorisation:
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
More from Neighbourhood Watch:
