Living large during your time in the UAE will not help you meet your financial goals. Photo: Getty Images
Living large during your time in the UAE will not help you meet your financial goals. Photo: Getty Images

The simple formula that will help you beat lifestyle inflation



“I can afford it" is a thought that will stop you getting rich. It’s especially bad if it crosses your mind after you receive a raise or a new, better paid job.

Like all the most-effective lies, it is built on a destructive truth.  You probably can afford whatever it is you want because you are making such a great salary here in the UAE. It’s probably also something you have always wanted. Now, it’s within your reach.

I had a teacher friend who used to pull up to work every day in a new luxury convertible. It was a very pretty car.  One day I asked her about it. I thought she might be independently wealthy or have a husband making way more money than we do as teachers. But, no.

She told me something I’ve heard many times since moving to Dubai: “I figure, I’ll only be able to afford it now, while I live in Dubai, and why not live a little?”  She bought it on credit, and followed that up with: “It’s probably why I’m not saving much money."

In the financial independence world, we refer to that as “lifestyle inflation”. Basically, as you make more money, you spend more of it on nicer and nicer things - because you can afford it. There’s always something else to buy, no matter how much money you make and what you’ve bought before. Thank you capitalism.

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Read more:

You deserve nothing in life but but you can earn anything

How to live frugally in the UAE and still feel fulfilled

The Happiest Teacher: 'The less you want, the richer you will become'

'Happiest Teacher' blogs about saving money in Dubai

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Lifestyle Inflation can easily destroy your ability to save money or make progress towards your financial goals.  Are you hoping to retire early?  Living large now will keep you from that.  Do you want to own property? How will you save for the down payment if your big pay cheque is swallowed by ever increasing spending? You won’t.

Fortunately, there’s a simple solution.  When you first get a job, determine how much you want to save or pay down your debts. Then, add your normal bills, such as phone, utilities and rent to that. These are your standard monthly expenses, so subtract them from your salary.

If, for example, you earn Dh15,000 a month, want to save Dh5,000 of that and have normal expenses of Dh3,000, that means you have Dh7,000 left to spend. The key is to take that Dh7,000 and figure out how much you can spend each day on expenses such as food and shopping. I like to give myself more on the weekends than on the weekdays because I spend more when I’m not at work. So, if you spend Dh200 on each weekday, and Dh300 on the weekends, that will be come to about Dh7,000 a month.

This daily spending amount is key, because if you aim to spend less than that figure every day, you will rein in your spending and start saving more. I think of it as a little daily competition, and I get a little burst of happiness if I’m under my amount, for near constant reinforcement of a positive habit.

How this helps you control lifestyle Inflation is that when you get a raise or start a new job with more income, you just keep your daily spending number the same. This is the simplest solution to a complex problem that I can come up with.

If you're content spending a certain amount, realise that spending more will not change your contentment, because you were already content. You’re already happy spending that amount each day, and hopefully you are not cutting your spending to the point that you are miserable about it.  Any extra money you earn just goes towards reaching your financial goals faster.

Even if you can afford something you want now, spending the extra money is not something you need to do. You can make that money work for you, creating long-term financial stability, early retirement, or opportunities that can only be seized when you have a strong bankroll behind you.

Dubai school teacher Zach Holz documents his journey towards financial independence on his personal finance blog The Happiest Teacher

COMPANY PROFILE

Name: SmartCrowd
Started: 2018
Founder: Siddiq Farid and Musfique Ahmed
Based: Dubai
Sector: FinTech / PropTech
Initial investment: $650,000
Current number of staff: 35
Investment stage: Series A
Investors: Various institutional investors and notable angel investors (500 MENA, Shurooq, Mada, Seedstar, Tricap)

Director: Nag Ashwin

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

Rating: ★★★★

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/

THE SPECS

Engine: 1.5-litre turbocharged four-cylinder

Transmission: Constant Variable (CVT)

Power: 141bhp 

Torque: 250Nm 

Price: Dh64,500

On sale: Now

MATCH INFO

Chelsea 0

Liverpool 2 (Mane 50', 54')

Red card: Andreas Christensen (Chelsea)

Man of the match: Sadio Mane (Liverpool)

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

Company Profile

Company name: Cargoz
Date started: January 2022
Founders: Premlal Pullisserry and Lijo Antony
Based: Dubai
Number of staff: 30
Investment stage: Seed

UAE ILT20

Marquee players:
Moeen Ali, Andre Russell, Dawid Malan, Wanindu Hasiranga, Sunil Narine, Evin Lewis, Colin Munro, Fabien Allen, Sam Billings, Tom Curran, Alex Hales, Dushmantha Chameera, Shimron Hetmyer, Akeal Hosein, Chris Jordan, Tom Banton, Sandeep Lamichhane, Chris Lynn, Rovman Powell, Bhanuka Rajapaksa, Mujeeb Ul Rahman
International players:
Lahiru Kumara, Seekugge Prassanna, Charith Asalanka, Colin Ingram, Paul Stirling, Kennar Lewis, Ali Khan, Brandon Glover, Ravi Rampaul, Raymon Reifer, Isuru Udana, Blessing Muzarabani, Niroshan Dickwella, Hazaratullah Zazai, Frederick Klassen, Sikandar Raja, George Munsey, Dan Lawrence, Dominic Drakes, Jamie Overton, Liam Dawson, David Wiese, Qais Ahmed, Richard Gleeson, James Vince, Noor Ahmed, Rahmanullah Gurbaz, Navin Ul Haq, Sherfane Rutherford, Saqib Mahmood, Ben Duckett, Benny Howell, Ruben Trumpelman

Essentials
The flights: You can fly from the UAE to Iceland with one stop in Europe with a variety of airlines. Return flights with Emirates from Dubai to Stockholm, then Icelandair to Reykjavik, cost from Dh4,153 return. The whole trip takes 11 hours. British Airways flies from Abu Dhabi and Dubai to Reykjavik, via London, with return flights taking 12 hours and costing from Dh2,490 return, including taxes. 
The activities: A half-day Silfra snorkelling trip costs 14,990 Icelandic kronur (Dh544) with Dive.is. Inside the Volcano also takes half a day and costs 42,000 kronur (Dh1,524). The Jokulsarlon small-boat cruise lasts about an hour and costs 9,800 kronur (Dh356). Into the Glacier costs 19,500 kronur (Dh708). It lasts three to four hours.
The tours: It’s often better to book a tailor-made trip through a specialist operator. UK-based Discover the World offers seven nights, self-driving, across the island from £892 (Dh4,505) per person. This includes three nights’ accommodation at Hotel Husafell near Into the Glacier, two nights at Hotel Ranga and two nights at the Icelandair Hotel Klaustur. It includes car rental, plus an iPad with itinerary and tourist information pre-loaded onto it, while activities can be booked as optional extras. More information inspiredbyiceland.com

COMPANY PROFILE

Name: Haltia.ai
Started: 2023
Co-founders: Arto Bendiken and Talal Thabet
Based: Dubai, UAE
Industry: AI
Number of employees: 41
Funding: About $1.7 million
Investors: Self, family and friends

Confirmed bouts (more to be added)

Cory Sandhagen v Umar Nurmagomedov
Nick Diaz v Vicente Luque
Michael Chiesa v Tony Ferguson
Deiveson Figueiredo v Marlon Vera
Mackenzie Dern v Loopy Godinez

Tickets for the August 3 Fight Night, held in partnership with the Department of Culture and Tourism Abu Dhabi, went on sale earlier this month, through www.etihadarena.ae and www.ticketmaster.ae.

MATCH INFO

Arsenal 1 (Aubameyang 12’) Liverpool 1 (Minamino 73’)

Arsenal win 5-4 on penalties

Man of the Match: Ainsley Maitland-Niles (Arsenal)

TWISTERS

Director:+Lee+Isaac+Chung

Starring:+Glen+Powell,+Daisy+Edgar-Jones,+Anthony+Ramos

Rating:+2.5/5

The 100 Best Novels in Translation
Boyd Tonkin, Galileo Press

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

How to wear a kandura

Dos

  • Wear the right fabric for the right season and occasion 
  • Always ask for the dress code if you don’t know
  • Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work 
  • Wear 100 per cent cotton under the kandura as most fabrics are polyester

Don’ts 

  • Wear hamdania for work, always wear a ghutra and agal 
  • Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
COMPANY PROFILE

Name: Xpanceo

Started: 2018

Founders: Roman Axelrod, Valentyn Volkov

Based: Dubai, UAE

Industry: Smart contact lenses, augmented/virtual reality

Funding: $40 million

Investor: Opportunity Venture (Asia)

MATCH INFO

Uefa Champions League semi-finals, first leg
Liverpool v Roma

When: April 24, 10.45pm kick-off (UAE)
Where: Anfield, Liverpool
Live: BeIN Sports HD
Second leg: May 2, Stadio Olimpico, Rome

Who is Tim-Berners Lee?

Sir Tim Berners-Lee was born in London in a household of mathematicians and computer scientists. Both his mother, Mary Lee, and father, Conway, were early computer scientists who worked on the Ferranti 1 - the world's first commercially-available, general purpose digital computer. Sir Tim studied Physics at the University of Oxford and held a series of roles developing code and building software before moving to Switzerland to work for Cern, the European Particle Physics laboratory. He developed the worldwide web code as a side project in 1989 as a global information-sharing system. After releasing the first web code in 1991, Cern made it open and free for all to use. Sir Tim now campaigns for initiatives to make sure the web remains open and accessible to all.

A QUIET PLACE

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

Director: Michael Sarnoski

Rating: 4/5

The Specs:

The Specs:

Engine: 2.9-litre, V6 twin-turbo

Transmission: 8-speed automatic

Power: 444bhp

Torque: 600Nm

Price: AED 356,580 incl VAT

On sale: now.

The specs

Engine: 2-litre 4-cylinder and 3.6-litre 6-cylinder

Power: 220 and 280 horsepower

Torque: 350 and 360Nm

Transmission: eight-speed automatic

Price: from Dh136,521 + VAT and Dh166,464 + VAT 

On sale: now

COMPANY PROFILE

Name: DarDoc
Based: Abu Dhabi
Founders: Samer Masri, Keswin Suresh
Sector: HealthTech
Total funding: $800,000
Investors: Flat6Labs, angel investors + Incubated by Hub71, Abu Dhabi's Department of Health
Number of employees: 10

Scorline

Iraq 1-0 UAE

Iraq Hussein 28’


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