The Debt Panel: ‘How can I pay off Dh350,000 debt to get my finances on track?'

The Dubai resident admits to living beyond his means and being a compulsive spender

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I have been working in Dubai for 18 years and while I initially lived within my means, I found it hard to resist the city’s flashy lifestyle and became extravagant in my spending habits. I sent my family back to our home country to reduce costs so I could, in turn, live a lavish life with my friends.

Because of this, I have racked up a credit card debt of Dh350,000. My salary of Dh22,000 is not enough to support my needs and I often borrow from friends to repay my dues.

My friends have stopped lending me money and I have defaulted on credit card payments. Collection agents are now calling me but I have evaded them so far by changing my mobile number and residential address. It is getting quite stressful.

I have become a compulsive spender. Even when I visit my home country, I prefer to stay in five-star hotels rather than my home since I am used to material comforts.

I do not know how to restrain my spending habits anymore. But I wish to make amends and get back on track with my finances. Is it possible? Please advise. SD, Dubai

Debt Panellist 1: Steve Cronin, founder of

You have a spending addiction. This goes far beyond the spending problem that many people in the region have when tempted by endless opportunities to spend money. You need professional help. There are many excellent centres such as LifeWorks and Lighthouse Arabia that can provide counselling. Figure out what from your past drives your spending, what current anxieties and inadequacies are motivating you.

It’s going to be a hard road back. You may not be able to make this change until you have truly hit rock bottom.

Your entire lifestyle is funded by debt, which is not your money to spend. There may come a time in the future when you have saved and invested enough to live a life of material comfort with your own money. The more you spend now and get into debt, the further away that future of financial independence will recede.

Learn to become more excited about saving and investing for your future than the temporary thrill of spending now. You will need to learn how to delay gratification. To say no to yourself when you see something you want to buy. To say no to your friends when they invite you on an expensive trip.

Figure out what from your past drives your spending, what current anxieties and inadequacies are motivating you
Steve Cronin, founder,

You have also forgotten what truly matters in life and all these things are free. Family, the love of a child, a beautiful sunset, helping a friend. Be grateful for the friends that have stuck by you. Have you defaulted on them as well? Be grateful for your family.

If you lose your job, you could end up in jail for debt. So turn things around now while you still can. You have a good, tax-free salary. Talk to your bank and other banks today. Get a consolidation loan for all your credit card debts, so you can avoid high interest rates and monthly late fees. This will keep the collection agents away as well.

Sell any expensive items you have, so you can repay a chunk of your debt. It may be painful getting rid of nice clothes, cars and TVs, but this is an important step on your road to being a less materialistic person.

Build coping strategies into your therapy sessions to stop you from spending while you sort out your mindset. Hide your credit cards. Move a big chunk of your salary into a separate savings account so it doesn’t feel like it’s there.

Set a monthly budget for each spending category and stick to it. Enlist the help of your friends and family. Learn from this and make sure you never go back to your old ways. It’s time to become disciplined, forward-looking and responsible.

Debt panellist 2: Philip King, head of retail banking at Abu Dhabi Islamic Bank

It is absolutely crucial for you to take stock not only of your personal finances but also the lifestyle choices that you are making. Each of us has a duty to manage our affairs in a responsible way.

The first thing you must do is stop running from your debt – it can and will eventually catch up with you and when that happens, the repercussions are even more challenging

At this stage, with defaults and debt collection agencies chasing you, you will understandably be stressed and frightened of what might happen next.

As I always say, please speak to your bank. If you are transparent about your situation, income and debts, they may help you consolidate all your debts into one loan and agree to a payment plan.

This will provide you with peace of mind and help you think about how you want to live your life and get on the right track, both financially and personally.

Remember, we must all live within our means and cut our cloth according to our income.

Debt panellist 3: Carol Glynn, founder of Conscious Finance Coaching

Firstly, anything is possible, and there is always hope. Admitting you have a problem is the first step to resolving it. This is often the hardest part in situations like yours and well done for being brave enough to ask for help.

You have clearly identified the cause of your debt escalation: you are living well beyond your means. However, that knowledge is often not enough to ignite change.

As a first step, I suggest the following exercise as you need to see and understand exactly what your lifestyle is costing you. I would advise you to review your bank and credit card statements for the past six months or more and add up how much you have spent on luxuries and your lifestyle.

Spending on credit cards can allow a disassociation with the cost, but looking at real numbers on a piece of paper or spreadsheet can be a jolt of reality
Carol Glynn, founder, Conscious Finance Coaching

Spending on credit cards can allow a disassociation with the cost. But looking at real numbers on a piece of paper or spreadsheet can be the jolt of reality many in your situation need so you can clearly see how much you are spending each month.

List all your debts, including as much detail such as repayment amounts and interest rates. You need absolute clarity on your spending habits and financial situation. Hopefully, this understanding of your reality will help you make better choices when you have the desire to spend in the future.

You are incurring significant interest and penalties each month on a credit card balance of Dh350,000. This makes it extremely difficult to resolve and it can feel like you are in financial quicksand.

Your debt is escalating as you are not making even the minimum payments. Speak to banks about obtaining a personal loan to pay off your credit card. You need to stop the cycle of compounding interest urgently.

Once you have paid off your credit card, cancel it and do not take out another card. You need to remove all access to debt as it is facilitating your spending habits.

It’s time to set yourself a budget for each month and commit to sticking to it. Reduce your costs wherever possible.

It is a big step to move from an extravagant lifestyle to a much more thrifty one, so try to build in small rewards for when you reach milestones.

Write down your financial goal and keep it within your view as much as possible. When times are hard, remind yourself why you need to change your spending habits. It will help you to stay focused when it inevitably gets hard.

It will not be easy to change your habits overnight. Do you have a friend or access to a coach or therapist who can act as an accountability partner while you work through this? Having someone to support you positively while you work through this will increase your chances of success hugely.

Updated: December 29, 2021, 5:00 AM