UAE residents become frugal to be better prepared for emergencies

Families in the UAE are spending less and saving more to be better prepared for emergencies.

Since the start of the pandemic, many people have lost jobs or faced salary cuts, a trend that has seen individuals become more financially responsible.

Residents who spoke to The National said they have cut back on travel, entertainment and unnecessary spending to build their savings.

Sonal Chhibber, an Indian freelancer in Dubai, said before the pandemic she went on expensive family holidays and shopping sprees with friends.

But now, she and her husband have scaled back their spending and are building an emergency fund.

“Working from home has resulted in saving big time on our commuting costs, clothing, business lunches and conferences,” said Ms Chhibber, who has been a UAE resident for 14 years.

“Time spent indoors, however, has made us spend more on home entertainment and groceries. However, we have cut down on all non-essential products and services.

“We have built a comprehensive family budget and have put our family’s financial and health records in order to keep them handy during an emergency.”

Ms Chhibber said her family decided to continue living in an apartment, instead of moving to a large villa.

Moving would have increased their monthly rent by Dh5,000 ($1,361) and utility bills by Dh1,500.

She moved her three children to a more affordable school, saving Dh3,500 per month.

They also save Dh2,000 a month by reducing the amount they dine out and spend on movie nights, fun days out, and shopping.

“The Covid-19 pandemic has drastically altered how and where we choose to spend our hard-earned cash,” Ms Chhibber said.

“As a family, we are trying to make sure to use this time at home to our advantage, so that we can make the post-pandemic period as stress-free and enjoyable as possible.”

Dedra Stevenson, an American-Emirati author in Sharjah, said she and her family are also focusing more on saving.

She said she has already made major cutbacks, including spending only Dh400 on fitness apps, instead of Dh4,000 a year on gym memberships.

Ms Stevenson also bought her own barista machine, so she does not need to spend Dh700 each month at cafes.

“Before, I also spent more on clothes and outings for myself and my children,” said Ms Stevenson, who has lived in the UAE for nearly 30 years.

“I spent more in malls than I should have. I was pretty careless and frivolous about my spending.”

Ms Stevenson said she has now become more financially responsible and keeps track of her spending.

She has stopped her regular outings and exercises at home.

“I think that families are fiercely aware of the fact that they need savings more than ever,” Ms Stevenson said.

“The whole world had the rug pulled from under their feet when the pandemic struck, so now people are much smarter about preparing something for emergencies.

“We’ve now witnessed a global disaster, so I suppose the older ones of us are tucking away some things for a rainy day in case it happens again in our lifetime.”

Shantelle Norman, a South African resident in Dubai, said her family has set a very tight budget.

She and her husband decided to homeschool their son, 5, as it was a more affordable option. They previously spent Dh31,800 a year on tuition fees.

“We have a very tight budget – schooling especially,” Ms Norman said.

“We budget down to the last dirham when purchasing groceries and my sons extracurricular activities because it’s beneficial to us.

“It's always important, especially now, to ensure you put money aside as a backup because you just never know what is going to happen from one day to the next. Financial responsibility is key to a happy and healthy outcome.”

She said they are saving about Dh2,000 per month on entertainment and dining out.

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