Managing a Salary Cut or Job Loss When Working in the UAE
While there is no doubt that the United Arab Emirates has been one of the most economically robust economies in the world, it is also a fact that this nation will not been immune from the effects of the current global economic downturn. The COVID-19 pandemic has placed a great deal of strain upon many businesses and industries in Dubai and Abu Dhabi etc. and due to the international nature of the UAE, job losses have hit hard and will continue to impact our communities. Facing such a situation is a very challenging scenario and even the most successful individuals may find themselves in an uncomfortable position. How will you be able to manage this situation? Are there any ways to mitigate the emotional and financial impacts that can result from being laid off or having your salary reduced? In order to be better prepared for any possible eventuality, it is a good idea to look at a handful of suggestions and coping strategies. Let´s talk more about pay cuts and job losses in UAE.
A Bit of Financial Prudence Will go a Long Way
The first and most important step to embrace during any time of financial hardship involves curtailing your spending habits. Never assume that your state of liquidity to remain the same and start to adopt a more pragmatic mindset. Here are some pertinent suggestions to keep in mind:
- Avoid spending money on superfluous activities.
- Use cash as opposed to a credit card in order to avoid the temptation to make excess purchases while out and about.
- Carefully monitor your ongoing energy and utility bills etc.
- Determine what other expenses can be reduced.
As always, be sure to pay all monthly bills on time. Do not lapse in regard to credit card premiums, as your credit score could otherwise be placed in jeopardy. You will be surprised to learn just how much can be saved by adopting the simple strategies outlined above.
Life Insurance Policies and Investments
It is crucial to maintain your current life insurance policy. While some individuals may be tempted to cancel, this strategy will inevitably place your long-term future in jeopardy. Having said this, it is also wise to speak with your adviser to determine if there are any additional ways available such as a temporary break from payments. Whatever the situation, do not let pay cuts or job losses in UAE clam your outgoings up to a point that you´ll damage important responsibilities.
Investments are often intended to provide you with a financial “nest egg” for the future. However, we also need to keep in mind that these will often be used as a form of liquidity during a tough economic climate. There are nonetheless a handful of mistakes which should be avoided at all costs including:
- Never unnecessarily liquidate a holding that is performing at a loss in line with market conditions.
- Be wary about becoming involved with short-term asset trading, as they are associated with higher degrees of volatility.
- Do not sell a well-performing asset if doing so would incur as massive loss (such as exit and surrender fees).
It is therefore wise to speak with a financial adviser or wealth management specialist in order to determine the most logical options based upon your current employment situation.
Smart Savings Plans
Analyse the performance of your current savings and investment accounts; particularly in terms of interest rates, performance, and return. When possible, try to allocate at least twenty per cent of your monthly income into a savings account. This will quickly add up over time; offering a convenient source of liquidity during future challenging situations.
Working Together with Banks and Financial Institutions
Banks rely upon their customers in order to ensure continuous operations. This is why they are likely to provide you with a host of options in the event that you fall upon hard times. Take a few moments to schedule an appointment with your banking representative. Enquire as to whether or not it is possible to freeze ongoing mortgage and loan payments for a specific period of time. Ask if they have other means of helping you out (such as in the form of an short-term loan). Of course, make certain that any proposals are feasible from a financial point of view. If you take out a loan and fail to meet the repayment requirements, you will only dig yourself into a deeper fiscal hole. Everybody is aware that salary cuts and job losses in UAE and globally are real, so people will have to be more flex.
Communicating with Loved Ones: The Notion of Strength in Numbers
Losing a job or having your salary cut back is certainly one of the most emotionally stressful events in life. This is why it is important to remember that speaking with friends and loved ones represents an excellent strategy. Speak with family members and explain the current situation to them. It is best to be open from the very beginning, as you will be provided with additional levels of support. Furthermore, they can help to cut back on any expenses; further reducing your current financial burden. Friends may even be able to offer additional suggestions or provide you with a bit of much-needed liquidity. Never allow pride to interfere with your state of affairs. It is always better to make things clear from the beginning and if possible, to ask for assistance.
There is no doubt that businesses throughout the UAE will eventually bounce back from this economic downturn. However, no one is exactly sure what the future may have in store. If you have recently been made redundant or should you be concerned about living off of a reduced salary, all of the suggestions mentioned above should be taken into account. On a final note, remember that you are not alone. Countless millions are experiencing similar hardships. This is why maintaining a positive outlook and realising that conditions will improve is always critical.
For more insights, further advice or guidance, you can get in touch HERE.
Blog published by Mike Coady.
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