Dubai's culture of savings to be altered?

Dubai’s culture of savings to be altered?

A new poll reveals just how little UAE residents have planned to secure their future nest egg. Nine out of 10 residents believe that they haven't saved nearly enough...

September 2, 2012 9:14 by M. Aldalou

Dubai’s tax-free salary package and luxury lifestyle is one of the fundamental attraction points for expatriates from all over the world to leave their homes and set up a new life in the Middle Eastern city. It is perhaps also the main reason why over 90 percent of expatriates living here feel that they haven’t saved nearly enough for the future.

Kipp wasn’t too taken aback while reading the comments of Mohammed Qasim Al Ali, CEO of National Bonds when he said that there was still a long way to go for residents and savings. We also weren’t surprised when he highlighted the absence of a culture of saving in the United Arab Emirates. We were, however, slightly shocked that out of all respondents, a mere 1 percent actually revealed that they had more than enough saved for the future. That leaves 99 percent divided between expatriates that live from cheque to cheque, those that do save but not nearly enough and those that don’t believe in saving at all.

“People need to realise they need to save more,” Al Ali said. The chief pointed out that money management must be injected in the culture as early as possible. School children should be taught the basics of money management and employees should be encouraged to participate in money saving schemes. Al Ali did however add that despite the disappointing trend in savings, the survey did reveal a positive surge in attitude and structure for the possibility. Interestingly enough, social and peer pressure have been cited as one of the main sparks that set some residents on a ‘consumerism spree’. They spend what they don’t have and buy what they can’t afford to maintain an image of power and wealth. Just say no, says Al Ali.

That’s interesting. I suppose tackling the issue at the very core of it makes sense but let’s speak practically. While Western expatriate respondents have said that they are more optimistic about setting a nest egg for the future, Emiratis and Asian expatriates have revealed that they found it harder to save in 2012 compared with the year before. Why is that, Kipp wonders? It’s not as if there have been surges in grocery prices, rent or education. Oh wait, there has!

“How do you save more? You either increase your income – which is more difficult nowadays – or you cut your expenses,” Al Ali said. Kipp senses validity in that comment. It is perhaps not news to us that cutting our expenses will lead to more frequent and larger sums of saving, much like we are all aware that we lose weight by cutting calories, but sometimes we just can’t help but reach for that second helping. Many expatriates have come here for the high life and are far from ready to give that up.

Feeling a positive trend in savings? Kipp doesn’t buy it.