In a developed, well-off country like the UAE, it's easy to lose sight of the importance of saving. But without it, financial ruin is closer than many people seem willing to recognise.
Financial security starts at an early age
Some may have doubted that Mohamed and Peyman Parham Al Awadhi would succeed when they launched their gourmet shawarma restaurant in Dubai in 2009. Not anymore. Today, Al Awadhi's Wild Peeta chain has expanded beyond Dubai Healthcare City into the World Trade Centre, and soon to other countries in the region.
These young Emirati brothers had what it takes to succeed: an idea - quick delivery of tasty food - and the initiative to make it happen. But more than that, they had a keen understanding of how to manage money. Sadly, it is this last skill that too few young people have today.
In a developed, well-off country like the UAE, it's easy to lose sight of the importance of saving. But with high costs and lavish spending, financial ruin is closer than many people seem willing to recognise.
As The National reports today, students at the University of Dubai have done a study, for the National Bonds savings organisation, on Emirati saving habits. The result indicated that only 58 per cent of Emiratis save money, and around 30 per cent save regularly. Of those who saved, more people were saving for a new car or a house than they were for retirement or their children's' education. Another survey by National Bonds in 2010 found that UAE residents are among the worst savers in all of the GCC.
Spending makes the economy spin, so too much money locked up in banks isn't the best policy either. But individuals' failure to plan for the future, or a rainy day, shows a clear lack of awareness about the need for financial planning at all income levels.
Last year, Emirates NBD launched a financial literacy campaign, Pay Yourself First, to educate people on managing and saving. People were encouraged to visit the campaign's Facebook page and take a pledge to save a certain amount of money each month. They could also find saving tips to help them manage their budgets more effectively.
More of these campaigns are needed. Even more importantly, parents have the responsibility to teach their children how to manage their finances more prudently. Lessons in the home can make a huge difference in developing children's money-management skills as they grow up and have their own incomes in the future. Not everyone has to spend his or her savings on a new restaurant, or even a college education. But if a person wants to, it's nice to know the money is there.