Mixed race woman holding jar of change. Getty Images
Building a nest egg for your future requires more than just a gratuity payment, say experts.  Getty

How to build up your 'oh no' fund



For many, the emergency fund is not working out.

While some simply do not have one, of those that do many cannot resist tapping what they have already saved. I'd like to propose an alternative for both sets of people: The "oh, no" fund - a savings account for not-quite-emergency expenses.

One of the reasons people do not have emergency funds is misplaced optimism. People think that if they are healthy, they will stay healthy. If they are employed, ditto. The car will keep running, the AC won't break down and, since everybody's a better-than-average driver, there won't be any accidents. Behavioural scientists call that "recency bias," which is the delusion that whatever happened in the recent past will continue into the indefinite future.

Everyone, though, has experienced those "oh, no" moments: the no-parking sign they didn't see, the crown the dentist says they need, the smartphone dropped in the toilet. A relatively small amount in such a fund can keep people from turning to expensive credit cards.

The power of just a few hundred dollars of savings can really help reduce the use of short-term, high-cost lending, according to John Thompson. He is chief programme officer for the Center for Financial Services Innovation in the United States, a nonprofit that promotes financial health.

Having a cushion is particularly important if you are a homeowner. In a recent Harris Poll survey commissioned by NerdWallet, nearly two-thirds of homeowners in the US say they have experienced anxiety about their home, with unexpected home repair costs the top cause of anxiety.

The "oh, no" fund is designed to be spent, not hoarded. Emergency funds - which are designed to store the equivalent of three months' salary - are meant to be spent, too, but people are often reluctant to part with money labelled as savings, says financial literacy expert and Rutgers University professor Barbara O'Neill.

"People hate to experience losses, and pulling money out of a savings account feels like a loss," Ms O'Neill says.

______

Read more:

Personal finance in the UAE: Residents track finances better but struggle with saving and debt

New Dubai marketplace app lets UAE residents lend and hire personal items

The expensive bills you can now pay monthly in the UAE

______

Many people also give up on the idea of an emergency fund because any money they manage to put aside is quickly wiped out by unexpected expenses. They do not realise that the emergency fund did its job by keeping those expenses from going on a credit card, or that saving for unexpected expenses is a "rinse and repeat" deal. You don't just hit a savings goal and you're done. You save, you spend, and then you save again.

The "oh, no" fund can help people build that muscle. It can be viewed as a transactional account with constant additions and subtractions as life unfolds. The fund can also help people who already have savings they do not want to touch except in big emergencies, such as a job loss.

The first "oh, no" goal can be pretty modest, say Dh2,000. For those new to saving, here is how to get there:

• Set up a dedicated account

By keeping this account separate to your regular account, it is clearer to you what this balance is for. You could open it in a separate bank to make it harder to access or keep it in the same bank, so that it is easier to transfer funds into it on a regular basis.

• Automate it if you can

Those with regular monthly salaries and bank accounts can set up automatic transfers, so Dh100 or Dh200 a month - or whatever amount you like - gets swept into a savings account each pay period. If this account is based overseas, you could technology that automatically rounds up your purchases to the nearest dollar and deposits the money in savings. Bank of America's Keep the Change debit card and Chime, a mobile bank account, both offer this option. Or try Digit, an app that analyses your spending and moves unneeded funds to a savings account.

• If you cannot automate it, make a rule

Decide to put aside a set dirham amount or percentage from every pay cheque or other income you receive. For example, say to yourself: "I'll save Dh500 from every salary payment and 10 per cent of any windfalls."

• Don't stop

Once you are in the habit of saving, keep going. Your next goal can be Dh5,000, which is the median cost of the largest financial shock experienced by households studied by the Pew Charitable Trusts in the US. After that, you can shoot for the traditional emergency fund recommendation of building a fund equal to three months' worth of expenses.

Even as you do, though, you may still want to keep a separate fund for those everyday mishaps. Because things go wrong - all the time.

Liz Weston is a columnist at NerdWallet, a financial planner and author of Your Credit Score

Illegal shipments intercepted in Gulf region

The Royal Navy raid is the latest in a series of successful interceptions of drugs and arms in the Gulf

May 11: US coastguard recovers $80 million heroin haul from fishing vessel in Gulf of Oman

May 8: US coastguard vessel USCGC Glen Harris seizes heroin and meth worth more than $30 million from a fishing boat

March 2: Anti-tank guided missiles and missile components seized by HMS Lancaster from a small boat travelling from Iran

October 9, 2022: Royal Navy frigate HMS Montrose recovers drugs worth $17.8 million from a dhow in Arabian Sea

September 27, 2022: US Naval Forces Central Command reports a find of 2.4 tonnes of heroin on board fishing boat in Gulf of Oman 

Indoor cricket in a nutshell

Indoor cricket in a nutshell
Indoor Cricket World Cup - Sept 16-20, Insportz, Dubai

16 Indoor cricket matches are 16 overs per side
8 There are eight players per team
9 There have been nine Indoor Cricket World Cups for men. Australia have won every one.
5 Five runs are deducted from the score when a wickets falls
4 Batsmen bat in pairs, facing four overs per partnership

Scoring In indoor cricket, runs are scored by way of both physical and bonus runs. Physical runs are scored by both batsmen completing a run from one crease to the other. Bonus runs are scored when the ball hits a net in different zones, but only when at least one physical run is score.

Zones

A Front net, behind the striker and wicketkeeper: 0 runs
B Side nets, between the striker and halfway down the pitch: 1 run
C Side nets between halfway and the bowlers end: 2 runs
D Back net: 4 runs on the bounce, 6 runs on the full

SOUTH KOREA SQUAD

Goalkeepers: Kim Seung-gyu, Jo Hyeon-woo, Song Bum-keun
Defenders: Kim Young-gwon, Kim Min-jae, Jung Seung-hyun, Kim Ju-sung, Kim Ji-soo, Seol Young-woo, Kim Tae-hwan, Lee Ki-je, Kim Jin-su
Midfielders: Park Yong-woo, Hwang In-beom, Hong Hyun-seok, Lee Soon-min, Lee Jae-sung, Lee Kang-in, Son Heung-min (captain), Jeong Woo-yeong, Moon Seon-min, Park Jin-seob, Yang Hyun-jun
Strikers: Hwang Hee-chan, Cho Gue-sung, Oh Hyeon-gyu

EMIRATES'S REVISED A350 DEPLOYMENT SCHEDULE

Edinburgh: November 4 (unchanged)

Bahrain: November 15 (from September 15); second daily service from January 1

Kuwait: November 15 (from September 16)

Mumbai: January 1 (from October 27)

Ahmedabad: January 1 (from October 27)

Colombo: January 2 (from January 1)

Muscat: March 1 (from December 1)

Lyon: March 1 (from December 1)

Bologna: March 1 (from December 1)

Source: Emirates

yallacompare profile

Date of launch: 2014

Founder: Jon Richards, founder and chief executive; Samer Chebab, co-founder and chief operating officer, and Jonathan Rawlings, co-founder and chief financial officer

Based: Media City, Dubai 

Sector: Financial services

Size: 120 employees

Investors: 2014: $500,000 in a seed round led by Mulverhill Associates; 2015: $3m in Series A funding led by STC Ventures (managed by Iris Capital), Wamda and Dubai Silicon Oasis Authority; 2019: $8m in Series B funding with the same investors as Series A along with Precinct Partners, Saned and Argo Ventures (the VC arm of multinational insurer Argo Group)

'The Batman'

Stars:Robert Pattinson

Director:Matt Reeves

Rating: 5/5

COMPANY PROFILE

Company name: Revibe
Started: 2022
Founders: Hamza Iraqui and Abdessamad Ben Zakour
Based: UAE
Industry: Refurbished electronics
Funds raised so far: $10m
Investors: Flat6Labs, Resonance and various others

Company Profile

Name: Direct Debit System
Started: Sept 2017
Based: UAE with a subsidiary in the UK
Industry: FinTech
Funding: Undisclosed
Investors: Elaine Jones
Number of employees: 8

Milestones on the road to union

1970

October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar. 

December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.

1971

March 1:  Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.

July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.

July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.

August 6:  The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.

August 15: Bahrain becomes independent.

September 3: Qatar becomes independent.

November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.

November 29:  At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.

November 30: Despite  a power sharing agreement, Tehran takes full control of Abu Musa. 

November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties

December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.

December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.

December 9: UAE joins the United Nations.

RESULTS

6.30pm: Emirates Holidays Maiden (TB) Dh 82,500 (Dirt) 1,900m
Winner: Lady Snazz, Richard Mullen (jockey), Satish Seemar (trainer).

7.05pm: Arabian Adventures Maiden (TB) Dh 82,500 (D) 1,200m
Winner: Zhou Storm, Connor Beasley, Ali Rashid Al Raihe.

7.40pm: Emirates Skywards Handicap (TB) Dh 82,500 (D) 1,200m
Winner: Rich And Famous, Royston Ffrench, Salem bin Ghadayer.

8.15pm: Emirates Airline Conditions (TB) Dh 120,000 (D) 1,400m
Winner: Rio Angie, Sam Hitchcock, Doug Watson.

8.50pm: Emirates Sky Cargo (TB) Dh 92,500 (D) 1,400m
Winner: Kinver Edge, Richard Mullen, Satish Seemar.

9.15pm: Emirates.com (TB) Dh 95,000 (D) 2,000m
Winner: Firnas, Xavier Ziani, Salem bin Ghadayer.

Company Profile

Name: HyveGeo
Started: 2023
Founders: Abdulaziz bin Redha, Dr Samsurin Welch, Eva Morales and Dr Harjit Singh
Based: Cambridge and Dubai
Number of employees: 8
Industry: Sustainability & Environment
Funding: $200,000 plus undisclosed grant
Investors: Venture capital and government

FROM THE ASHES

Director: Khalid Fahad

Starring: Shaima Al Tayeb, Wafa Muhamad, Hamss Bandar

Rating: 3/5

KINGDOM OF THE PLANET OF THE APES

Director: Wes Ball

Starring: Owen Teague, Freya Allen, Kevin Durand

Rating: 3.5/5

The Little Things

Directed by: John Lee Hancock

Starring: Denzel Washington, Rami Malek, Jared Leto

Four stars

COMPANY PROFILE

Company: Eco Way
Started: December 2023
Founder: Ivan Kroshnyi
Based: Dubai, UAE
Industry: Electric vehicles
Investors: Bootstrapped with undisclosed funding. Looking to raise funds from outside

Company Profile

Company name: Namara
Started: June 2022
Founder: Mohammed Alnamara
Based: Dubai
Sector: Microfinance
Current number of staff: 16
Investment stage: Series A
Investors: Family offices

UAE v Gibraltar

What: International friendly

When: 7pm kick off

Where: Rugby Park, Dubai Sports City

Admission: Free

Online: The match will be broadcast live on Dubai Exiles’ Facebook page

UAE squad: Lucas Waddington (Dubai Exiles), Gio Fourie (Exiles), Craig Nutt (Abu Dhabi Harlequins), Phil Brady (Harlequins), Daniel Perry (Dubai Hurricanes), Esekaia Dranibota (Harlequins), Matt Mills (Exiles), Jaen Botes (Exiles), Kristian Stinson (Exiles), Murray Reason (Abu Dhabi Saracens), Dave Knight (Hurricanes), Ross Samson (Jebel Ali Dragons), DuRandt Gerber (Exiles), Saki Naisau (Dragons), Andrew Powell (Hurricanes), Emosi Vacanau (Harlequins), Niko Volavola (Dragons), Matt Richards (Dragons), Luke Stevenson (Harlequins), Josh Ives (Dubai Sports City Eagles), Sean Stevens (Saracens), Thinus Steyn (Exiles)

A QUIET PLACE

Starring: Lupita Nyong'o, Joseph Quinn, Djimon Hounsou

Director: Michael Sarnoski

Rating: 4/5

Director: Nag Ashwin

Starring: Prabhas, Saswata Chatterjee, Deepika Padukone, Amitabh Bachchan, Shobhana

Rating: ★★★★

‘White Elephant’

Director: Jesse V Johnson
Stars: Michael Rooker, Bruce Willis, John Malkovich, Olga Kurylenko
Rating: 3/5


Latest
Most Read
Top Videos

On The Money

Make money work for you with news, features and expert analysis

      By signing up, I agree to The National's privacy policy
      On The Money