A new survey on the saving habits expatriate residents conducted by compareit4me, the Middle East’s leading finance comparison site, revealed that 53 percent of respondents don’t think they earn enough money to allow for them to allocate any to savings.
The study was conducted among 2,200 residents who are mostly expatriates between December 2015 and January 2016.
30 percent do not save a single dirham
The study highlighted not just the impact of living costs on family incomes, but also the poor savings culture or the lack of financial discipline among a number of residents.
Findings of the survey indicate that while less than half of respondents set aside funds from their monthly wage for retirement or emergencies, over 30 percent do not save a single dirham, with over 13 percent admitting they believe life is too short to save.
According to Jon Richards, CEO of compareit4me, who conducted the study, many people moved to the UAE because they believed they could make more money, but they failed to take into account the high cost of living that comes with moving overseas.
“It’s easy to put off saving especially in your younger years, but before you know it, another year has passed and you still haven’t put your saving plan into action,” said Sonja Stephen, Editor at compareit4me group.
Low income, credit card debt and high expenses
Most people attribute financial insecurities to a lack of income and list loans and credit card debt among their biggest concerns.
Preeti Bhambri, founder of personal finance website MoneyCamel.com, said she had come across a number of cases where expats find it hard to provide financial support to their families because of high school fees, transportation and other living expenses in the country.
Financial discipline is the key
However, not everyone is up to their neck with debt or household expenses. Those who have made an effort to stick to a savings habit have seen their nest eggs grow despite high living costs and modest incomes.
“Along with good credit card management, making payments in full and on time, both factors which are essential to avoid debt, it’s smart to focus on a savings plan.” Sonja Stephen said.
“Individuals should tailor a realistic savings plan to suit them and should take positive steps to achieve their goal. Increasing emergency savings, signing up for a good pensions plan and even investing are all key areas that should never be overlooked,” she added.