When I first heard that salaries would be given early due to Eid, I thought it was a positive thing. I assumed it would help in various pre-Eid preparations, paying zakat, new clothes and so on.
What I did not understand was why many of my peers were so distressed by this. Apparently getting their salaries early meant that there was extra time until their next one, and this meant running out of funds.
Surely, these individuals who have steady, well-paying jobs were not living from month to month. But I slowly found out that a large number of my peers, in fact, had some serious problems when it came to saving or money management in general.
There will always be those who live from month to month. That is a situation that's unfortunately unavoidable. Furthermore, I truly believe that anyone working hard to earn an income has the right to spend it however she or he pleases. But when it seems like an overwhelming number of educated level-headed individuals have no savings, then we have a situation that needs to be addressed.
This reality is even more drastic when we consider that, according to statistics from the Emirates Foundation, about 70 per cent of young Emiratis are in debt. Research conducted by the organisation shows that Emirati youth spent three times more on fashion than their expatriate Arab and Asian peers.
While I am a big believer in the “treat yourself” philosophy, I am also more concerned with mapping out what my necessary expenses are every month. My inner survivalist has always ensured that if I were to find myself suddenly without income, I would have a grace period through which I would be financially secure. These are financial responsibility tenets I acquired both from my family and from years of living alone as a student.
There is a real need for financial literacy programmes, initiatives that help people not only to understand how they earn and use their money, but how to manage, invest and donate it.
The programmes should be part of any curriculum, both high school and college, because those are when good habits can be formed. They should be part of a larger set of educational classes that can prepare people for “adult” life. These can also include basic legal procedures or laws that the average individual should be aware of.
This problem is not just reserved to our youth. It was reported last month that the UAE has one of the world’s highest rates of indebtedness, at $95,000 (Dh349,000) per household.
Saving regularly and knowing how to manage debt are crucial skills. They are important especially as housing costs and utility prices continue to increase. On a positive note, in mid-August a report by the National Bonds Corporation revealed that more UAE residents (42 per cent) are saving for retirement.
I was also pleased to hear about the launch of the Esref Sah Shabaab club by the Emirates Foundation. The programme aims to use trained Emiratis to educate youths at workplaces, schools and universities across the country, promoting the fundamentals of personal finance.Over the years, I have learnt that the first step to proper financial management is to be able to distinguish between essential and non-essential expenditures and keep track of them. Sometimes that means compromise.
A new car can be necessary because the one you’re driving is falling apart, but the new PlayStation could wait. Being responsible does not mean you cannot have what you want; sometimes it just means you need to delay purchases.
As a society, we should work towards rewiring our relationship with money. We can still enjoy a certain lifestyle without emptying our bank accounts. It is all about maintaining a balance.
Fatima Al Shamsi is a globetrotting Emirati foodie, film buff and football fanatic
