Saudi families ‘lack savings culture’

Saudi families ‘lack savings culture’
Updated 25 December 2015

Saudi families ‘lack savings culture’

Saudi families ‘lack savings culture’

ABHA: Many Saudis generally do not have a culture of saving their money and are instead spending above their means on cars, travel and electronic accessories.
According to statistics published in the media recently, only 26 percent of Gulf citizens save on a regular basis. In contrast, 89 percent of Saudi citizens are in debt, with many failing to make lifestyle changes. There are 3.5 million people in debt in this country, with personal loans amounting to SR400 billion in 2014.
Economist Fadhel Al-Buainain said that most crises faced by people can be linked to high levels of debt. There are often reports of people being arrested and having their cars repossessed because they took out enormous loans that they could not pay back.
It was clear that many people were taking out personal, mortgage and other loans because they were unaware of the consequences of unchecked consumerism, and the importance of saving.
If these people were aware of saving their money, they would not buy luxurious cars, or travel abroad. They would instead get vehicles commensurate with their income and not spend on extravagant items such as overseas travel, he said.
He said both husbands and wives must take equal responsibility for the family budget and keep a close eye on wasteful expenditure. They should not fall into the trap of spending to keep up appearances or to compete with others.
Al-Buainain said that banks must also be responsible in the manner they advertise borrowing and loans. There has been a tendency to bombard consumers with advertisements for loans of all kinds, he said.
Khaled Jalban, a family and community medicine consultant, said parents play a critical role in how their children view spending. Since the Kingdom is relatively well off, there is a tendency to spoil children by providing them with everything they want. This unintentionally makes them become avid consumers.
Jalban said many people are spending too much money on luxuries and not the basics, often over and above their ability to pay for these products. He said schools play a critical role in teaching young people about living simply.