Personal finance in the UAE: Residents track finances better but struggle with saving and debt
While UAE residents are keeping better tabs on their finances with fewer living beyond their means, saving and staying on top of debts is now a struggle, a new personal finance index from Abu Dhabi Islamic Bank has revealed.
According to the bank’s moneysmart index released on Tuesday, 56 per cent of residents “keep very close track” on their money, up from 52 per cent in 2014, while only 3 per cent are spending more than they earn compared to 9 per cent in 2014.
However, just under a quarter of respondents are managing to save every month, down from four in 10 in 2014 and almost half struggle to meet their debt repayments each month.
The poll surveyed 1,300 UAE residents earning over Dh10,000 with the responses compared to an earlier unpublished poll carried out by the bank in 2014.
“The key thing here is that people are becoming much more aware of the importance of keeping track of spending and saving,” says Philip King, the head of retail banking at ADIB. “And if they do, they have a better chance of staying out of difficulty. Importantly, if they keep track, they should be able to detect the early warning signs of financial difficulty.
“This could be having slightly less money left over at the end of the month, or starting to carry over payments for a bank card. When that happens, your first reaction should be to see where you can cut back on spending.”
The new personal finance barometer comes at a time when many residents are feeling the squeeze due to rises in the cost of living in the first quarter of this year. Statistics released in April by the Statistics Centre - Abu Dhabi found that consumer prices rose by 2.7 per cent in the first quarter of 2018 compared to the same period the previous year. And Central Bank of the UAE data released the same month, found that of the 7.168 million cheques worth Dh351.1 billion, handled by the UAE Clearing Cheque System during the first three months of 2018, Dh15.7bn worth bounced.
