Saving a small amount, only to see it swallowed up by an unexpected expense, is not satisfying. Peter Dazeley / Getty Images
Saving a small amount, only to see it swallowed up by an unexpected expense, is not satisfying. Peter Dazeley / Getty Images

Why saving for something fun is good for your financial health



Financial experts tend to have firm ideas about the most important goals: you should save for retirement, pay off debt and build an emergency fund. Buying a pair of US$200 trainers or an ultra-high definition TV is probably not on that list.

But maybe saving for something you really, really want isn't frivolous. It may be exactly what you need to get your financial life on track.

Researchers who have studied the role of savings in financial health say what's important is the habit of putting aside money and having a plan for that cash. People who have a planned savings habit are four times more likely to be financially healthy than those who don't, according to a report by the US non-profit the Center for Financial Services Innovation. That habit is more important than income, age or other demographic characteristics, the report found.

Saving even small amounts can help people avoid the high cost of being broke. A few hundred bucks saved may help bypass credit card debt and bank overdraft fees. It can help avoid eviction, or losing a job because the car broke down. Even a thin financial cushion can help people become more financially stable.

"That ability to be resilient in the face of ups and downs is a very important component of financial health," says John Thompson, senior vice president and head of research consulting at the Center for Financial Services Innovation. "It also helps people avoid high-cost financial services when they face a short-term challenge."

But saving a small amount, only to see it wiped out by an unexpected expense, is not satisfying. Saving up to buy something we want, on the other hand, can feel like a real win - and it's the winning that matters to our brains. Each time we anticipate getting a reward, our brains are treated to a shot of dopamine, the chemical that makes us want to repeat a pleasurable experience.

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Read more:

How to budget for a surprise expense in the UAE

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Seven in ten UAE residents unsure how to achieve their financial goals

20 tips to get your finances back on track in the UAE

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Recalling our small wins can also help us learn to persist when difficulties arise, rather than just giving up, says Michael Thomas, a financial counsellor in the United States.

Remembering the times we've achieved a money-focused goal helps counteract the "negative automatic thoughts and catastrophic thinking" that keeps people from seeing progress, says Mr Thomas, who has studied psychology and also co-hosts Nothing Funny About Money a public radio programme in Atlanta.

If people are not already in the habit of saving money, their goal doesn't need to be lofty - and perhaps shouldn't be. Being told to save $1 million for retirement or three months' worth of expenses for emergencies could cause them to give up in despair.

"When I'm starting from zero, those seem like magical, fantastical, unattainable sums of money," Mr Thompson says. "How would you begin is a daunting challenge."

What may be worse is telling non-savers that they need to put aside money for retirement and emergencies and a host of other goals. Researchers at the University of Toronto's Rotman School of Management found people were much more likely to save money when presented with a single goal. When contemplating multiple goals, people considered the trade-offs and put off taking action, the researchers found.

Letting people set their own goals also may goose savings habits. WiseBanyan, a digital investing website, found the percentage of customers who set up automatic savings plans increased about 50 per cent after it allowed them to create their own milestones or goals, whether retirement, a trip around the world or a new wardrobe, says chief operating officer and co-founder Vicki Zhou.

"When you personalise it, the way you think about it changes," Ms Zhou says.

That's not to say people should save only for the fun stuff and ignore their long-term financial health. But the fun stuff can be a powerful motivator.

"The behaviour of savings is what we're trying to encourage," Mr Thompson says. "It's not that we're suggesting (saving for emergencies and retirement) isn't important, but before that comes the behaviour."

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

Company profile

Company name: Shipsy
Year of inception: 2015
Founders: Soham Chokshi, Dhruv Agrawal, Harsh Kumar and Himanshu Gupta
Based: India, UAE and Indonesia
Sector: logistics
Size: more than 350 employees
Funding received so far: $31 million in series A and B rounds
Investors: Info Edge, Sequoia Capital’s Surge, A91 Partners and Z3 Partners

Electric scooters: some rules to remember
  • Riders must be 14-years-old or over
  • Wear a protective helmet
  • Park the electric scooter in designated parking lots (if any)
  • Do not leave electric scooter in locations that obstruct traffic or pedestrians
  • Solo riders only, no passengers allowed
  • Do not drive outside designated lanes
'Falling for Christmas'

Director: Janeen Damian

Stars: Lindsay Lohan, Chord Overstreet, Jack Wagner, Aliana Lohan

Rating: 1/5

10 tips for entry-level job seekers
  • Have an up-to-date, professional LinkedIn profile. If you don’t have a LinkedIn account, set one up today. Avoid poor-quality profile pictures with distracting backgrounds. Include a professional summary and begin to grow your network.
  • Keep track of the job trends in your sector through the news. Apply for job alerts at your dream organisations and the types of jobs you want – LinkedIn uses AI to share similar relevant jobs based on your selections.
  • Double check that you’ve highlighted relevant skills on your resume and LinkedIn profile.
  • For most entry-level jobs, your resume will first be filtered by an applicant tracking system for keywords. Look closely at the description of the job you are applying for and mirror the language as much as possible (while being honest and accurate about your skills and experience).
  • Keep your CV professional and in a simple format – make sure you tailor your cover letter and application to the company and role.
  • Go online and look for details on job specifications for your target position. Make a list of skills required and set yourself some learning goals to tick off all the necessary skills one by one.
  • Don’t be afraid to reach outside your immediate friends and family to other acquaintances and let them know you are looking for new opportunities.
  • Make sure you’ve set your LinkedIn profile to signal that you are “open to opportunities”. Also be sure to use LinkedIn to search for people who are still actively hiring by searching for those that have the headline “I’m hiring” or “We’re hiring” in their profile.
  • Prepare for online interviews using mock interview tools. Even before landing interviews, it can be useful to start practising.
  • Be professional and patient. Always be professional with whoever you are interacting with throughout your search process, this will be remembered. You need to be patient, dedicated and not give up on your search. Candidates need to make sure they are following up appropriately for roles they have applied.

Arda Atalay, head of Mena private sector at LinkedIn Talent Solutions, Rudy Bier, managing partner of Kinetic Business Solutions and Ben Kinerman Daltrey, co-founder of KinFitz

What went into the film

25 visual effects (VFX) studios

2,150 VFX shots in a film with 2,500 shots

1,000 VFX artists

3,000 technicians

10 Concept artists, 25 3D designers

New sound technology, named 4D SRL

 

ESSENTIALS

The flights 
Emirates, Etihad and Swiss fly direct from the UAE to Zurich from Dh2,855 return, including taxes.
 

The chalet
Chalet N is currently open in winter only, between now and April 21. During the ski season, starting on December 11, a week’s rental costs from €210,000 (Dh898,431) per week for the whole property, which has 22 beds in total, across six suites, three double rooms and a children’s suite. The price includes all scheduled meals, a week’s ski pass, Wi-Fi, parking, transfers between Munich, Innsbruck or Zurich airports and one 50-minute massage per person. Private ski lessons cost from €360 (Dh1,541) per day. Halal food is available on request.

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Display: 6.7-inch flexible Amoled, 2,412 x 1,080, 394ppi, 120Hz, Corning Gorilla Glass 5

Processor: MediaTek Dimensity 7,200 Pro, 4nm, octa-core

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Platform: Android 14, Nothing OS 2.5

Main camera: Dual 50MP main, f/1.88 + 50MP ultra-wide, f/2.2; OIS, EIS, auto-focus, ultra XDR, night mode

Main camera video: 4K @ 30fps, full-HD @ 60fps; slo-mo full-HD at 120fps

Front camera: 32MP wide, f/2.2

Battery: 5,000mAh; 50% in 30 minutes with 45-watt charger

Connectivity: Wi-Fi, Bluetooth 5.3, NFC (Google Pay)

Biometrics: Fingerprint, face unlock

I/O: USB-C

Durability: IP54, limited protection from water/dust

Cards: Dual-nano SIM

Colours: Black, milk, white

In the box: Nothing Phone (2a), USB-C-to-USB-C cable, pre-applied screen protector, Sim tray ejector tool

Price (UAE): Dh1,199 (8GB/128GB) / Dh1,399 (12GB/256GB)

The Saga Continues

Wu-Tang Clan

(36 Chambers / Entertainment One)

COMPANY PROFILE

Company name: Klipit

Started: 2022

Founders: Venkat Reddy, Mohammed Al Bulooki, Bilal Merchant, Asif Ahmed, Ovais Merchant

Based: Dubai, UAE

Industry: Digital receipts, finance, blockchain

Funding: $4 million

Investors: Privately/self-funded

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Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

3 Body Problem

Creators: David Benioff, D B Weiss, Alexander Woo

Starring: Benedict Wong, Jess Hong, Jovan Adepo, Eiza Gonzalez, John Bradley, Alex Sharp

Rating: 3/5

The specs

Engine: 4.4-litre, twin-turbo V8
Transmission: eight-speed auto
Power: 617hp
Torque: 750Nm
Price: from Dh630,000
On sale: now

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

Name: Peter Dicce

Title: Assistant dean of students and director of athletics

Favourite sport: soccer

Favourite team: Bayern Munich

Favourite player: Franz Beckenbauer

Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates 

 

Company profile

Company name: Fasset
Started: 2019
Founders: Mohammad Raafi Hossain, Daniel Ahmed
Based: Dubai
Sector: FinTech
Initial investment: $2.45 million
Current number of staff: 86
Investment stage: Pre-series B
Investors: Investcorp, Liberty City Ventures, Fatima Gobi Ventures, Primal Capital, Wealthwell Ventures, FHS Capital, VN2 Capital, local family offices

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Engine: 3.5-litre V6
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Speed: 0-100km/h 3.9 seconds
Price: Dh230,000
On sale: now

Company profile

Name:+Thndr

Started:+October 2020

Founders:+Ahmad Hammouda and Seif Amr

Based: Cairo, Egypt

Sector: FinTech

Initial investment: pre-seed of+$800,000

Funding stage: series A;+$20 million

Investors: Tiger Global, Beco Capital, Prosus Ventures, Y Combinator, Global Ventures, Abdul Latif Jameel, Endure Capital, 4DX Ventures, Plus VC, Rabacap and MSA Capital


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