Are millennials in the UAE living beyond their means?

There is something empowering about leading a good life. And sometimes it is the knowledge of ticking all boxes of luxe living. Think about the time when you visited the Dubai Mall and decided to blow up a considerable portion of your salary on choicest of clothes and cosmetics? Or the time you decided to go for a Eurotrip without having to think about how that will impact your savings? For some, these are affordable escapes. However, for a section of the urban, middle class youngsters living in the UAE, these Insta-worthy adventures have become a way of life, irrespective of the cost they come at.

Lately, a spate of articles in American publications have been almost scorning millennials for being a generation that does not believe in saving. Observing the saving habits among the millennials in the US, an article in CNBC last year claimed, "Of 'young millennials' (between 18 and 24 years old), 72 per cent have less than $1,000 in their savings accounts and 31 per cent have $0. A sliver (8 per cent) have over $10,000 saved. 'Older millennials' - defined as those between 25 and 34 - aren't doing much better - 67 per cent have less than $1,000 in their savings accounts, 33 per cent have nothing at all and 15 per cent have over $10,000."
The story in the UAE is a tad different. A majority of youngsters not only come here for work, many of them have families that have lived and worked here for years and possibly built a financial pool. Most youngsters wknd. spoke to said that they do spend an average of 30-50 per cent of their monthly salaries on activities that may as well qualify as indulgences, while the rest of the money is spent on essentials such as rents, transport, food, etc. While they may not have gone the American way, it is clear that saving, for most youngsters, isn't exactly top priority.
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Dubai, and the UAE at large, is a world of possibilities for those who want to be part of it. For some, it is a land of opportunities, while for others, it is a place that can afford them a 'good' life. Over the years, as the country earned the reputation of being one of the world's luxury hotspots, people from all over the world came in to find jobs that can not only help them save in a tax-free economy, but also afford them great quality of life. The 'pressure' then for most youngsters is to stand out and get noticed amid what they see as a 'highly glossy crowd'. Twenty-two-year-old Aishwarya Sangani doesn't mince any words when she says keeping up with appearances is important in order to be taken seriously. "When you are living in a megapolis like Dubai, you tend to meet a lot of different people and you need to make a good impression. For that, you end up buying expensive clothes and mobiles." Aishwarya's Achilles heel is her love for gadgets and she keeps updating them as and when a new model hits the market! It wasn't until she received a reality check that she realised saving might just be worth considering. "There was a time when my bank showed I had Dh1.75 only," she laughs. "That's when I realised that I had spent about Dh5,000 in a month only on food and clothes. This when I was making Dh7,500 working as a video editor for a production house." When it's not about putting up an appearance, lifestyle choices determine how your finances shape up. Twenty-five-year-old Pakistani expat Haasin Khan, a digital project manager, puts his monthly expenditure at Dh8,000, though he earns a little more than Dh15,000 per month. Saving, he says, is important only if it has a larger purpose attached to it, like a potential investment. A few months ago, he got a rude shock when he figured his biggest expense was eating out. "I checked my statements and understood I was spending about 25 per cent of my income on eating out at upscale restaurants." Efforts to curb his expenditures are underway.
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Among the urban middle class, any expenditure incurred above one's savings often calls for intense scrutiny - not just of the factual kind but also moral. Twenty-five-year-old radio professional Adarsh Anoop found himself on one such guilt trip when his girlfriend came to visit him in Dubai for four days. Like a responsible boyfriend, he took care of her accommodation, travel, food, shopping but later discovered he had spent close to Dh4,500 on her (he makes Dh9,000 a month). Looking back, his biggest regret today is not sending any money for the education loan in the process. Today, Adarsh categorically states that living beyond one's means is an absolutely personal choice. "Dubai does provide all the options and hence I might end up spending comparatively more than what I would in a place like Bangalore. At the end of the day, it's a choice," he says.
There is considerable truth in that claim. While there are industries like communications and hospitality, where an unwritten code of conduct demands that professionals be dressed to look the part, in other cases it is mostly the peer pressure and personal ambition that drives the need to carry oneself in a certain way. Swapna Koshy, associate professor, arts and humanities at University of Wollongong, elaborates, "There is extreme pressure to fit in, especially for those who are looking for an entry into specific industries like media or specific companies. Those who are new in Dubai learn slowly that maintaining their 'friends' is too expensive. If they are unemployed, it adds to the pressure. Many take the decision to slip out of the rat race after burning their fingers. Image is not just about appearance, it is also about where you go and what you do. Some students confessed to have splurged on VIP entrance to clubs and festivals, lunches and extravagantly priced brunches to appease their 'friends'. Most youngsters without the means to fund their propped up 'image' wisely exit the social circle and search for 'real' friends. If not, it can end in a financial disaster."
For the generation that moved here in the past two decades - especially the urban, middle class - saving wasn't merely a necessity, it was a mission! Today, most of the youngsters who live beyond their means do so with the knowledge that there is a support system to fall back on. The said support system, in most cases, is familial wealth. Josiane Assaad, director of communications at Souqalmal.com, says families need to be the first check points when it comes to expenditures. "It is vital for parents to instill the value of money in their children from an early age and to make them understand the significance of each dirham. This teaches the child not to take things for granted and associate every element to a cost. A money box or a savings account is a good way of educating a child how savings can accumulate over the years and how any amount of money, regardless of how small it might be today, can add up to a significant amount of cash that can be used later for education or a down payment. It is these values that will help them appreciate the importance of financial planning when they grow older and will empower them to make more informed decisions."
Living amid the glitz and glamour of the UAE, perhaps it is easy to get swayed by the power of perception. Perhaps it would be useful to aim for the sweet spot between living in the moment and prepping for the future!
anamika @khaleejtimes.com