Many Emiratis of recent generations have too little awareness of the importance of financial planning.
Life was much simpler a few decades ago. The marketplace was also different: prices were lower, and there were not malls full of luxury goods. Families were able to live a good life while maintaining a strong sense of responsibility towards their future.
Unfortunately this is not the case with my generation. My friends and I grew up in a more modern country, with a more complicated way of life. We buy what we need and want in a more expensive marketplace that targets young people and drags them into debt.
We have become rivals in spending. We compete with each other to purchase more luxurious cars, bags and gadgets; we compete on travelling to better holiday destinations; and we compete on organising fancier weddings to show off our wealth. We face great social pressure to possess the best and latest brands.
But are we all wealthy? Do we all have large sums of disposable cash in our bank accounts? Of course not. Most of us depend on our monthly salaries to pay for our cars, start families and raise children, buy our daily needs and fill our long list of wants.
In such an environment, it's no wonder that many of us have fallen into debt.
In Abu Dhabi, a recent poll for the Department of Economic Development found that more than half of Emirati family heads were in debt. The poll, which looked at the status of families during the first quarter of this year, found that 60 per cent of debt covered car loan instalments, 25 per cent was connected to housing loans, 12 per cent to wedding expenses, and 3 per cent to travel.
The problem is even more evident in the case of young people: more than 70 per cent of survey respondents under the age of 30 were in debt.
Central Bank statistics show a 17.4 per cent growth in personal lending for consumption purposes between 2011 and 2012.
This suggests only one thing: unless we have financial security, we need to change the way we manage our monthly incomings and outgoings; to focus on our needs and dismiss unnecessary wants; to save for the long-term future, or for a rainy day.
Even among those who do save, the amount of savings is not adequate. A survey of 900 people by financial comparison company Souqalmal found that four in 10 UAE residents saved less than 10 per cent of their monthly income, with half of them saying they did not save anything at all. When it came to Emiratis, the survey showed that 30 per cent of respondents did not save at all.
In another poll by the National Bonds Corporation, done in 2011-12, more than two-thirds of UAE residents said they did not save at a regular pace. Most respondents recognised the problem, with 87 per cent of them saying they did not believe their current savings would be adequate for the future. Only 1 per cent considered their savings to be "more than enough" for the future.
Among the survey respondents, 44 per cent cited the high cost of living as the main reason they could not save, with 38 per cent blaming loans and other debts.
The rising cost of living could be a factor leading to this situation, but it is certainly not an excuse to fall into debt. Keeping out of debt is a matter of good management of our monthly incomes.
People in the UAE also tend to overuse their bank accounts. In the Souqalmal poll, almost 40 per cent of savers said they kept their money in a basic bank account. This indicates a lack of awareness of other investment options such as shares and bonds.
One option is the National Sukuk Programme, run by the Investment Corporation of Dubai and initiated by the Dubai government to provide low-risk savings. Such schemes play a part in building up the foundations of the economy, boosting its liquidity and stability.
For individuals, having good financial-management skills is important to secure the future and reduce dependency on bank loans or government handouts. And this cannot be achieved without keeping track of how much we spend and how much we save or invest.
Younger people are less likely to save because they have not yet been subjected to life's big expenses, such as marriage, rent and raising and educating children.
For this reason, parents have a responsibility to teach their children how to manage their money from an early age, by instilling in them the importance of saving money, and introducing them to the right habits and tools to assist them in doing that.
Before buying an unnecessary super-expensive handbag, or before taking a loan to buy a luxury car or organising a super-fancy wedding, we should ask ourselves: do we really need that?
On Twitter: @AyeshaAlmazroui