Money ‘diet’: Frugal February can help boost savings, develop conscious spending habits

People from all over the world choose the month of February to practice frugality and go on a money ‘diet’ or spending ‘fast’. It’s a great way to see how far a small budget can stretch while helping to develop mindful spending habits.

The all-encompassing culture in most parts of the world encourages people to spend more (and often thoughtlessly). And while many might find the frugality challenge dull or uninteresting, keeping expenditures in check can bring amazing results. 

Most importantly, it can help people save a major portion of their incomes, providing a financial cushion for when life’s uncertainties show up. The savings can also be used as ‘seed money’ for a side business or to fund a major investment with a focus on creating an alternative income stream. 

According to a survey by Policybazaar.ae, UAE residents have started saving and investing more than ever before, especially after the pandemic. Here’s how people can make the best use of February to refill their coffers and cut down on avoidable expenditures;

Around 66 percent of UAE residents eat out at least once per week and spend an average of AED 120 per head.

Cook at home

Home-cooked meals are inexpensive - and also great for health. According to this survey by KPMG, around 66 percent of UAE residents eat out at least once per week and spend an average of AED 120 per head. This means a family of 4 people can save up to AED 1,920 per month - a number that can amount to AED 23,040 in one year.

Cooking at home means people could end up saving big portions of their incomes. The focus should be on eating all of February’s meals at home, and this challenge should extend to work lunches and evening meals too. 

Freeze spending in one category

Readers can pick any one category, preferably one that has been a major expense, and completely freeze spending for it. This may be clothing, entertainment, or something else. If this approach feels too restrictive, another technique is to pick two categories and limit expenditures instead of freezing them altogether. The result is two-pronged; it helps families understand that they can thrive on a smaller budget and also enables them to become more aware of where their hard-earned money is going.

The average person wastes 95 kgs of food per year in the UAE, taking the total household food waste to 923,675 tonnes per year, according to a new UN report. 

Take inventory of your pantry

Grocery shopping can be a major expense, along with food wastage, if kept unchecked. In fact, the average person wastes 95 kgs of food per year in the UAE, taking the total household food waste to 923,675 tonnes per year, according to a new UN report. 

Dubai Carbon confirms that roughly 38% of food prepared every day in Dubai, which is still fit for human consumption, gets thrown away. These numbers jump to a whopping 60% in Ramadan. 

The best way to avoid food (and money) wastage is to plan meals ahead of time and use shopping lists to avoid impulse purchases. Moreover, taking regular stock of the food that’s already available in the pantry means readers are more aware of what’s on hand and can plan ways to utilize these ingredients within their meals. This practice isn’t just great for when families want to save more, it is also very good for the environment and can lower carbon emissions.

The ultimate success of the money diet or spending fast depends on how ambitious the savings goal is. It also depends on how much participants enjoy the process of saving and cutting down on expenses instead of wondering why they’re doing it at all. For readers who reach their monthly savings goals for this month (and enjoy the process too), it’s a good idea to continue this approach down the line as well. Money saved every month can pile up fast and give people much more leverage to plan the course of their lives in a smarter way.

For more insights on regular savings plan, please connect with us at info@cfsgroup.com.