The global reputation of wealth associated with the UAE cannot be denied. With sports cars, yachts, and high-end brands dominating the landscape, the country is often viewed as a playground for the rich. However, beyond the glitz, the UAE offers opportunities for professionals seeking new career paths.

“The UAE offers an incredible lifestyle and opportunities that many could only dream of before moving here,” says Michael Yanni, Founder of YAN Capital & Anchor Strategic Advisory Services. “It’s a place that inspires ambition and creativity… But with so much on offer, it’s easy to say ‘yes’ to everything—brunches every weekend, spontaneous luxury purchases, dining out daily—without considering whether those choices truly align with the life you want.”

A CULTURE OF SPENDING

The spending culture in the UAE is undeniable. According to the NielsenIQ Retail Spend Barometer, UAE shoppers spent $2.1 billion on FMCG products in Q3 2024, a 6.4% increase from the previous year. Tech & Durables saw a 2.5% year-on-year rise, reaching $1.5 billion. A 2024 Skyscanner report revealed that 71% of UAE residents plan to increase travel spending in 2025. Meanwhile, a recent entertainment survey found that 70% of residents dine out weekly, and 81% have digital subscriptions.

While these numbers showcase a booming consumer economy, an important question arises: how many are spending the money they have?

Debt is an open secret in the UAE. Credit card usage and excessive loans are common, yet financial struggles remain taboo. Discussing this issue, Dr. Ana Kochoska, a medical doctor and certified hypnotherapist, explains, “It’s easy to fall into the mindset of, ‘I work hard, so I deserve to treat myself.’ This mentality and the fast-paced, luxurious environment often lead to overspending and accumulating debt.”

WHY MANY FALL INTO THE DEBT TRAP

According to CEIC data, domestic credit in the UAE reached $418.9 billion in February 2024, up from $408.2 billion the previous month. A regional study by Strategic Analysis estimated household debt to be $95,000 per household, amounting to $114 billion. The survey found that 48% of those polled said their monthly income was insufficient to cover their repayment obligations, with 60% saying a quarter or more of their salary was spent on paying back debts. The report said the UAE represented roughly 67% of the GCC household debt.

Karim Chouman, Founder & CEO of Myne, a wealth-tech platform, identifies three key reasons for widespread debt accumulation in the UAE. The first he points to is the high cost of living. “Dubai isn’t cheap,” says Chouman. “Between rent, transportation, and food, a huge chunk of people’s salaries covers the basics. That often leaves little room for savings, and when unexpected expenses arise, or even just the desire to enjoy life, people turn to credit cards and loans to fill the gap.”

The second is the fast-paced lifestyle and social pressure. With new restaurant openings, exclusive events, and tempting travel destinations just a short flight away, FOMO is real. “When everyone around you is constantly doing exciting things, it’s easy to get caught up in the momentum and start spending just to keep up,” says Chouman.

Last, and perhaps the most critical factor, is easy access to credit. UAE banks actively offer credit cards, personal loans, and BNPL options, making spending painless. “Many people don’t realize how quickly small purchases add up,” he warns. “The idea of splitting payments into smaller chunks makes expensive purchases seem manageable—until you’re juggling multiple installments and struggling to keep up.” Mortgages and car loans further compound the issue.

THE SOCIAL MEDIA ILLUSION

Social media exacerbates financial strain by setting unrealistic lifestyle expectations. “There is an unspoken expectation that if you live and work in Dubai, you should maintain a lavish lifestyle and showcase it online,” says Dr Kochoska. “If you’re not posting designer clothes, luxury cars, and extravagant experiences, you may feel like you’re falling behind.”

This is all aggravated by what Chouman describes as one of the biggest financial pitfalls: the “I’ll make it back next month” mindset. “Since most expats rely on salaries and don’t have income tax eating into their paychecks, there’s a false sense of security. Many see their time in Dubai as temporary and want to ‘make the most of it,’ often prioritizing short-term enjoyment over long-term financial stability.”

THE REAL CONSEQUENCES 

Living beyond one’s means has serious consequences. Debt leads to mounting late payment fees and interest accumulation. Banks utilize debt collection agencies, and in extreme cases, bounced cheques due to insufficient funds can result in legal action. Under UAE law, smaller debts may lead to court proceedings, while larger sums could result in imprisonment, asset seizure, travel bans, or deportation.

The psychological toll is equally severe. A recent GCC survey found that nearly 60% of respondents cited money worries as a top stressor. Mental health professionals report a 30% increase in stress-related cases linked to financial concerns over the past five years. 

THE CASE FOR MINDFUL SPENDING

Understanding financial boundaries is crucial, says Dr. Kochoska. “The UAE offers many attractive financial benefits, such as tax-free income, accessible bank loans, and opportunities to start businesses. The key is using these wisely while maintaining financial discipline.”

Yanni agrees: “The issue isn’t spending—it’s whether you’re spending intentionally. I spend more on rent but less on air travel. I prioritize high-quality groceries and playing padel over nightlife and entertainment. The key is defining your own version of success and aligning your spending with what genuinely matters to you.”

His advice? Approach financial decisions like an investor in your own life. “Before committing to a luxury purchase or experience, ask yourself: ‘What’s the maximum financial and time loss I’m comfortable with?’ This allows for calculated risk-taking—exploring what the UAE offers without financial distress.”

Chouman adds, “Dubai is an amazing city with so much to offer, but it’s easy to fall into the trap of living beyond your means. Financial awareness and smart money management are key to enjoying life here without falling into debt. At the end of the day, real wealth isn’t about what you show off—it’s about financial security and peace of mind.”