DUBAI, Jan 26: A recent survey by financial technology platform Yabi has revealed that 50.46% of UAE residents spent more than they earned over the past year, highlighting growing concerns about economic security and stability. Yabi's Financial Health Report 2024 emphasizes the consequences of this overspending, with only 33.53% of respondents confident about having enough savings for retirement and 41% feeling pessimistic about achieving long-term financial goals.

Despite more than 63% of respondents managing to pay bills on time, the report reveals that only half could sustain their expenses for two weeks or less without an income. This alarming statistic underscores the need for better financial education and budgeting skills among UAE residents.

Financial advisor Raji Kaippallil identified three key reasons for overspending: the abundance of leisure activities in cities like Dubai, societal pressure to maintain appearances, and the ease of using credit cards and buy-now-pay-later services. "The rising cost of living has pushed residents to rethink their spending habits and focus on living within their means. However, many still struggle to track their expenses effectively," she noted.

Kaippallil advises residents to save at least 20% of their monthly income, focusing on building an emergency fund to cover three to six months of fixed expenses.

UAE residents like 28-year-old content creator Kaunain Fatima and travel producer Zahirah Marty shared their financial management approaches. Fatima allocates 30% of her salary to rent and groceries and sets aside 25% for savings but admits that delayed payments from collaborations can create financial stress. Marty, a freelancer, said inconsistent income affects her ability to save but emphasized the importance of meeting expenses on time to avoid high interest rates.

The report calls for greater awareness about saving and investing to ensure financial stability and highlights the urgent need for residents to prioritize needs over wants while developing stronger budgeting habits.