Dubai: I am not a financial pundit, nor am I a millionaire. But I have tried to put into practice some of the lessons I learnt early in life concerning the use of money.

One of the fundamental principles that has guided my life is that I am a steward of resources, not the owner. This means that I have been put in charge of wealth so that I can take care of it and put it to good use. The idea is that I am responsible and accountable for how I use the money that has been entrusted to me, in my case – a salary.

How do I use it, how do I spend it, how much do I save?

Over the years I have met many financial analysts who have enthusiastically offered to help me with financial planning. I have always said ‘no’ to them. For them it meant investing in a product that they were trying to sell. But not one of them told me that one of the foundation blocks of saving is to write down where the money goes.

How does that help?

A few years ago I read a book that was on the New York Times bestseller list entitled The Millionaire Next Door. It was an eyeopener. The book went on to say that the average American millionaire lived well below his means, wore inexpensive suits, drove American-model cars, was a meticulous budgeter and fastidious investor. And there was one thing most of them had in common – they were frugal, avoiding wasteful expenditure and hyper-consumption.

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Most of them also knew exactly how much they spent on food, clothing, shelter and other expenses because not only did they keep a close watch on where their money went, they also recorded it.

After we got married, my wife and I maintained a diary to record our expenses. I was inspired by an uncle who would sit down and write every expense made during the day. (At 87 years of age, he still records every single rupee that is spent).

Tips to handle money better
1. Make a budget – Be realistic when you list the expected expenses for the month, but make sure you live within your means.
2. Keep a list of your expenses – Tracking what you spend could be the key to better savings. Enter your expenses in a diary / excel sheet or an app. It will help you keep track of the money spent and ensure that you stay within the budget.
3. Differentiate between ‘needs’ and ‘wants’ – If you find it difficult to save, ask yourself if what you buy is a need or a want. You will be surprised that most of the money we splurge on are ‘wants’.

Irrespective of what we spent; my wife and I would record it in the diary at the end of the day. There were two advantages – we could track our expenses and at the same time be accountable to each other with our finances. We never questioned each other on what we spent, but the fact that it had to be written in the diary meant that we needed to think twice before making any unnecessary purchase.

A few years later, we discovered a simple app named Wally where we could record our expenses. Once the figures were entered, it would compute the data and turn it into a pie chart. In short, at the end of a week or month, we could get an exact idea of where our money had gone. Add a budget and the app will tell you how you are placed financially.

The pandemic has made financial calculations simple. As groceries are purchased once a week, and with fewer outings over the weekend, it is easy to calculate expenses. Once again, writing down financial goals helps the process.