Understand your saving habits

Before setting any financial goals, take some time to objectively analyse how you currently manage money day-to-day. Look at the past 3 to 6 months of spending and saving activity. What do you notice? Do you tend to spend most of your money every month with little left over? Do you have trouble resisting impulse purchases?

Try to understand your usual behaviours around spending, saving and financial decision making. Then, identify what is behind those behaviours. For example, you may be overspending when stressed, or find it hard to deny "little luxuries" after a long week at work. The more insight you can get into what drives your financial habits, good and bad, the better equipped you'll be to set appropriate goals.

Start small with your goals

Armed with this self-knowledge, begin crafting S.M.A.R.T. financial goals – ones that are Specific, Measurable, Achievable, Relevant, and Time-bound. But make sure to start small and focus on incremental change that is easy to sustain.

For instance, if your analysis shows you have trouble saving consistently, set a goal to automatically transfer just AED 50 every week to savings. Or, if you know you overspend on convenience items, commit to limiting takeout meals to just one day a week.

Baby steps are best when trying to change behaviours. Don't expect perfection right away. Setting goals that stretch your comfort zone too quickly, often fails.

Automate what you can

Speaking of stretching comfort zones, automating your finances can work wonders. Setting up automatic transfers into separate savings accounts or automatically investing a set amount from each paycheck takes the decision-making out of your hands so you don’t really have to think about it.

Once you automate something like a recurring transfer into an emergency fund, maintaining that positive financial habit becomes effortless. The passive nature of automation may help sidestep common self-control issues that often sabotage sound money management practices.

Give every dirham a job

Budgeting can transform scattered intuitions about where your money goes every month, into cold, hard facts. Once armed with accurate spending data, you can strategically assign your money in accordance with your priorities. Budgeting experts recommend categorising expenses as either needs, wants, savings and/or debt payments.

Be brutally honest about available income after your essential needs are covered. What can realistically go toward savings goals or extra debt payments? This clear breakdown reduces guesswork and wishful thinking about finances. Now your dirhams have specific jobs aligned with your values, which relates to your smart goal setting.

Assess progress frequently

The final piece of the goal-setting puzzle is consistent tracking and assessment. Don't just set well-intentioned goals then forget about them! Try setting calendar reminders to check in on your progress throughout the month.

Are automated transfers occurring regularly? Have impulse purchases decreased? How much progress have you made towards paying off credit card debt? Frequent accountability checks reinforce motivation and highlight problem spots.

If certain goals need adjustment, that's okay. Revaluate what's realistic with the insight gained, and tweak goals or timelines accordingly. The key is consistency and continued awareness. Progress may not be linear, but as long you pay attention and remain committed, you're on the right path.