Why do UAE expats struggle to save money?
A new survey carried out in Dubai shows many expatriates living in the UAE find it difficult to save money, primarily because their monthly wages are not sufficient enough to keep up with the ever increasing cost of living in the country.
In a study of 2,200 residents who are mostly expats in the UAE, it was found that around three in ten (30%) are unable to save even a single dirham each month. And also, nearly six in ten (53%) are uncertain whether household salaries even leave enough cash to save.
The study, which was carried out between December 2015 and January 2016, emphasised not just the bearing of living costs on family incomes, but also the poor savings attitude or the lack of financial discipline among a number of residents.
Dubai’s inflation reached 3.99% in 2015, largely due to the costs of furnishings, household equipment, routine household maintenance, as well as accommodation, water, electricity and gas, among others.
CEO of compareit4me, Jon Richards, who led the survey, said many people moved to the UAE because they thought they could make more money, but they didn’t bear in mind the high cost of living that comes with moving overseas.
Richards said, “I think that often, expats are attracted here with the considerably higher salaries than their home country, but don’t factor in the huge expenses involved with living here”.
He added, “You can of course budget your lifestyle here, which many don’t do, and then fall into the debt trap which I guess falls into the lack of discipline category”.
However, not everyone in Dubai is drowning in debt or domestic expenses. Those who have made an effort to stick to a savings plan have seen their funds grow in spite of high living costs and modest incomes.
Financial planner at deVere Acuma, Andrew Prince, said the failure to save could be caused by a lack of financial schooling either from general education or from parents. He added, "In fairness, you don't know what you don't know, so how can you possibly teach?”
He said people can kick start the habit of saving money by paying themselves first. A good rule of thumb is to set aside 20 per cent of the monthly salary first before anything else.
"Before your salary reaches the bank account, establish how much you are going to set aside each month for your 'tomorrow. So, for every Dh10,000 income, Dh2,000 is set aside and saved for tomorrow. The balance is for you to spend today on rent, food and entertainment [among others]”.
Prince said it may be difficult for many people to really stick to this habit, but with a "little discipline and practice, a good habit will form and you will be on your way to financial security”.
If you need financial advice in Dubai, contact deVere Acuma today to speak with one of our expert consultants.
A new survey carried out in Dubai shows many expatriates living in the UAE find it difficult to save money, primarily because their monthly wages are not sufficient enough to keep up with the ever increasing cost of living in the country.
In a study of 2,200 residents who are mostly expats in the UAE, it was found that around three in ten (30%) are unable to save even a single dirham each month. And also, nearly six in ten (53%) are uncertain whether household salaries even leave enough cash to save.
The study, which was carried out between December 2015 and January 2016, emphasised not just the bearing of living costs on family incomes, but also the poor savings attitude or the lack of financial discipline among a number of residents.
Dubai’s inflation reached 3.99% in 2015, largely due to the costs of furnishings, household equipment, routine household maintenance, as well as accommodation, water, electricity and gas, among others.
CEO of compareit4me, Jon Richards, who led the survey, said many people moved to the UAE because they thought they could make more money, but they didn’t bear in mind the high cost of living that comes with moving overseas.
Richards said, “I think that often, expats are attracted here with the considerably higher salaries than their home country, but don’t factor in the huge expenses involved with living here”.
He added, “You can of course budget your lifestyle here, which many don’t do, and then fall into the debt trap which I guess falls into the lack of discipline category”.
However, not everyone in Dubai is drowning in debt or domestic expenses. Those who have made an effort to stick to a savings plan have seen their funds grow in spite of high living costs and modest incomes.
Financial planner at deVere Acuma, Andrew Prince, said the failure to save could be caused by a lack of financial schooling either from general education or from parents. He added, "In fairness, you don't know what you don't know, so how can you possibly teach?”
He said people can kick start the habit of saving money by paying themselves first. A good rule of thumb is to set aside 20 per cent of the monthly salary first before anything else.
"Before your salary reaches the bank account, establish how much you are going to set aside each month for your 'tomorrow. So, for every Dh10,000 income, Dh2,000 is set aside and saved for tomorrow. The balance is for you to spend today on rent, food and entertainment [among others]”.
Prince said it may be difficult for many people to really stick to this habit, but with a "little discipline and practice, a good habit will form and you will be on your way to financial security”.
If you need financial advice in Dubai, contact deVere Acuma today to speak with one of our expert consultants.