Emirati families in debt urged to seek help

Event hears of high earners on near-six figure salaries struggling with finances

Speakers during the financial panel discussion organised by the Department of Community Development. Photo: DCD
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Almost half of Abu Dhabi families owe money on loans and more than 50 per cent of Emiratis have no clear plan to budget for household expenses, a government survey found.

The Quality of Life Index by the emirate's Department of Community Development (DCD) showed there is work still to be done to foster a culture of prudent financial management.

The authority hosted a panel discussion this week to raise awareness of the need to save money and strengthen the financial security of the family.

One expert spoke of his efforts to help a man who struggled on a monthly salary of close to Dh100,000 because of his poor budgeting.

It is a behavioural problem that is gradually changing. We recognise that it is a challenge
Mohammed Al Blooshi, Department of Community Development, Abu Dhabi

Experts highlighted the dangers of people spending more instead of tightening their belts in an effort to maintain their social status.

“It is a behavioural problem that is gradually changing,” said Mohammed Al Blooshi, executive director of the strategic affairs office at DCD.

“We recognise that it is a challenge and we are offering solutions. It is also one of the main pillars for a stable family.”

Family finances under the microscope

  • The survey found 47 per cent of Abu Dhabi families have loans to pay back
  • 53 per cent of citizens and 42 per cent of residents do not have a clear financial plan for their families' expenses
  • However, one in four Emirati families saves a significant amount of their monthly income

While concerns over the financial well-being of families remain, there was encouragement from the number of people seeking help to climb out of debt.

“You need to be responsible and do seek the knowledge because it is out there,” said Mr Al Blooshi.

“There are programmes that the government is offering and there are many solutions,” he said.

Assistance schemes in place include the Ghaya financial literacy programme, established in 2020 in partnership with the Abu Dhabi Global Market Academy and the London Institute of Banking and Finance (LIBF), with the support of the Abu Dhabi Social Support Authority, which offers guidance to Emiratis on how to be fiscally responsible.

Out of pocket on Dh100,000 a month

Even high earners can endure money troubles if they do not balance their income against their outgoings.

Emirati Saif Al Naqbi is a self-made millionaire who has made it a mission to help others after digging himself out of significant debt.

He set up the Gorich app last year to help users track their spending.

“I want every person to know that any employee can be a millionaire,” the founder of Rain Management Consultancies said.

“However, it is important to save and to have a goal to saving.”

The former banker said that residents should be wary of overdependence on credit cards.

“The main problem is that Emiratis spend too much. It is in their behaviour. They spend beyond their means and on non-essential items,” Mr Al Naqbi, 32, said.

He offered a cautionary tale of one Emirati he helped, who had found himself in financial difficulty despite earning a salary close to six figures a month.

“He contacted me saying that in spite of earning almost Dh100,000, he was always broke by the second week of the month and didn’t know where all his money was going.

“When I asked further, I found out that he had two wives, three housemaids and was spending a lot on outings and non-essential items.

“All he needed was better management of his finances and to know exactly where he spent his money.”

Mr Al Naqbi advises people to invest their money wisely to avoid being reliant on a single income.

“Open a business or invest,” he said. “But try to not only be dependent on one salary,” he said.

Mr Al Naqbi said that every person can manage their finances by having five bank accounts.

“One for your salary and one for family expenses and the third is a personal account and a fourth for savings and the last and most important is the investment account,” he said.

Updated: November 02, 2022, 2:39 AM