Many expatriates settling in the United Arab Emirates have their families set in higher order of priority than themselves, making sure a portion of their wages are sent back home.
Financial experts argue that there is nothing wrong with providing financial assistance to family members in need, but workers need to save for themselves as well, to ensure a decent amount of security at the time when they are no longer able to work.
Unfortunately, the needs of the family — and even members of extended family — may prove setting up personal savings plan is an uphill task.
Quresh, a migrant worker from Pakistan, sends close to one-third of his salary to his parents. With salaries staying at the same level and cost of living in Dubai rising, Quresh often struggles to save a portion of his income for himself.
“It does make things difficult. I need to restrict myself from [spending so much on] shopping, food, traveling and social life,” he said. “I dream about starting my own business, but as my family is dependent on me, I had to prolong my dream as much as I can to save for a better future.”
According to a research by HSBC, more than nine of ten people in the UAE (92%) provide regular financial support to at least one person, the highest in the world and far exceeds the global average of 73%. In comparison, Indonesia (96%), Malaysia (92%), and India (90%) also have high percentage of people who have dependents who rely on them while western countries like the United Kingdom (57%), Australia (61%) and United States (62%) do not share the same sentiment that much.
“.. financial obligations to their dependents weigh on people’s ability to not only save for their own retirement, but also to leave behind an inheritance for their loved ones,” the HSBC study said.
There are too many sad tales of expatriates left with no savings after years of toiling hard abroad because hey failed to plan for their own future, says Preeti Bhambri of MoneyCamel.com.
“A worker from Nepal sent two years’ wages back home to build a house of bricks (pukka). In the recent earthquake, the house fell and now she has nothing to show for all her wages. A single Asian man sent everything to his family back home and never got to save even for health or life insurance. He has been lying in coma in Rashid hospital for the last two months,” Bhambri said.
Without faulting these expats for caring enough for their families, Bhambri said they should also take action to ensure security in case of future upheavals.
Bhambri said it is important to think about their own financial security by investing a portion of income in a comprehensive insurance plan, for instance, may prove useful in the future. They also need to make sure they have savings equivalent to four or six months’ salary.
“This will sustain the individual and his family in case of a job loss or natural disaster,” she said.