Travelling with friends is an economical way to save on accommodation, transportation and other expenses. Getty Images
Travelling with friends is an economical way to save on accommodation, transportation and other expenses. Getty Images
Travelling with friends is an economical way to save on accommodation, transportation and other expenses. Getty Images
Travelling with friends is an economical way to save on accommodation, transportation and other expenses. Getty Images

Business

Money

Eight strategies to save for your dream holiday

Automate savings, track your spending, make use of rewards and find the tactic that works for you

Mithil Ajmera

April 25, 2024

  • English
  • Arabic

In the UAE’s ever-changing economic landscape, saving for a holiday can be both a challenge and a unique opportunity.

Renowned globally for its shopping festivals and year-round deals, the country offers a luxurious lifestyle.

As a result, people often find themselves splurging on the latest gadgets and experiences.

This, coupled with the rising cost of living globally, makes saving for a dream holiday particularly challenging.

While there is some relief with zero tax on personal income, having a tailored saving strategy that balances immediate expenses with future adventures is a must for anyone creating a holiday fund.

It is crucial to understand the broader economic environment, make informed choices when it comes to what we are spending on, and make regular saving a habit.

Challenges in saving for holidays

High living expenses: It is easy to get caught up in the UAE's sparkle and glamour, but it comes at a cost – a high standard of living. Rents, education fees and a penchant for luxury can divert funds from your holiday savings, particularly for those focused on keeping up appearances.

Financial literacy: Poor financial management can deprive people of the opportunity to save money. Many do not know of or understand tools and strategies that can enable them to allocate funds for future holidays without diminishing their present quality of life.

How to save for your holiday

  1. Know your holiday goals: Figure out what kind of holiday you want. Are we talking about a luxury getaway or a budget-friendly trip? Knowing this helps to set savings goals.
  2. Automate your savings: Think of it like setting up a direct deposit for your holiday fund. Create a savings goal just for your holidays and automate transfers into it. This way, you're not tempted to dip into it for everyday spending.
  3. Track your spending: Keep an eye on where your money's going. Maybe you can cut back on those daily coffees or unused subscriptions. Redirecting that money into your holiday fund can add up over time.
  4. Leverage rewards: Don't ignore those loyalty programmes and cashback offers. They can enhance your holiday savings, whether it's earning air miles or getting cash back on purchases.
  5. Confide and save with others: Saving for holidays doesn't have to be a solo mission. Join a community of fellow savers for motivation and tips to reach your goals together.
  6. Avoid currency exchange fees: Use prepaid cards with zerio or low foreign exchange fees or withdraw cash from ATMs that offer favourable rates.
  7. Travel with others: Travelling with others helps to split the cost of accommodation, transportation and other expenses, making it economical for everyone.
  8. Eat like a local and research low-cost activities: Explore local markets and eateries instead of dining at popular restaurants that are overpriced. Look for free or low-cost activities such as hiking, visiting parks and nearby festivals with free admission days.

My goal has always been to simplify money management, making it accessible for everyone irrespective of their backgrounds or financial literacy.

Our lives are a tapestry of experiences and holidays stand out as some of the most vibrant threads. They provide a much-needed form of escape from the mundane, a chance to explore, relax and create lasting memories with your loved ones.

Ensuring that financial difficulties do not stand in the way of these experiences is very important.

Saving for a holiday embodies the full essence of better money management: setting a goal, planning towards it and watching it come to fruition.

The journey teaches discipline and patience. It also reminds us that with the right tools and strategies, our loftiest dreams are within reach.

Much like the journey itself, the path to saving for your dream holiday is rife with discoveries, challenges and, ultimately, rewards.

By embracing smart saving strategies, using technology and celebrating each milestone, you will be able to turn what was once a daunting task into an empowering journey.

So, here's to making all our holiday dreams come true, one smart saving step at a time.

Mithil Ajmera is co-founder and chief operating officer of Sav

More from Rashmee Roshan Lall
The bio

Favourite book: Peter Rabbit. I used to read it to my three children and still read it myself. If I am feeling down it brings back good memories.

Best thing about your job: Getting to help people. My mum always told me never to pass up an opportunity to do a good deed.

Best part of life in the UAE: The weather. The constant sunshine is amazing and there is always something to do, you have so many options when it comes to how to spend your day.

Favourite holiday destination: Malaysia. I went there for my honeymoon and ended up volunteering to teach local children for a few hours each day. It is such a special place and I plan to retire there one day.

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Who: UAE v USA
What: first T20 international
When: Friday, 2pm
Where: ICC Academy in Dubai

On Women's Day
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UAE%20v%20West%20Indies
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Starring: Abdullah Boushehri, Laila Abdallah, Lulwa Almulla

Rating: 3/5

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Stars: Kangana Ranaut, Soham Shah, Esha Tiwari Pandey

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Updated: April 25, 2024, 5:00 AM
Personal financeHolidaysFinance