As part of the 2030 plan, one of the initiatives of the Ministry of Housing is to develop a savings program to help Saudis save up for a down payment on their future homes. Riyali Financial Literacy Program (SEDCO Holding Group) and launched a survey to find out how much is saving part of the culture among Saudi residents.

The results of the survey show that more than 4 out of 10 respondents did not save any part of their income at all, while 17% saved less than 5% of their salaries, and a total of 38% saved above 6% of their salaries.

When asked about the reason behind the low level of savings in the household, 60% of the respondents blamed their level of income for not being able to save. However, data shows that the average level of income in Saudi Arabia in both the private and government sectors has increased on average by 13%, and 6% respectively in both segments since 2014

If salaries have increased, then has the cost of living increased higher than the salaries in the last four years? According to the Saudi General Authority for Statistics, the cost of living index (CPI) in Saudi Arabia has increased by 7.6 points between 2014 and 2016.

The data may be an indicator that Saudi residents not only need help in learning how to manage their finances better and understand how to control their expenses but also how to increase their level of investments to prepare for their retirement or have an emergency fund. Financial planning is an essential part of learning how to be financially independent and achieve your goals without resorting to borrowing and living beyond your means.

The average monthly salary for Saudis in the private sector has witnessed a growth of 12.9%, and within the government sector, the growth rate was 6.1%.

Sectors H1-2014 H1-2017 Growth rate
Private SR 6.8K SR 7.7K 12.9%
Governmental SR 9.9K SR 10.5K 6.1%

Amr Banaja, Vice-President, Marketing and Corporate Responsibility at SEDCO Holding, commented on these figures by saying, “Anyone should be able to achieve what they aspire for financially without resorting to borrowing or depriving themselves of what they desire. One can do this by properly managing their finances, shunning needless expenses, and choosing appropriate saving and investment opportunities. If you feel that your salary is insufficient, or you’re unable to save even a small portion of your salary, you should immediately start a goal-driven plan of action, where you should change the way you spend and focus more on savings, in a manner that suits you best.”

An essential step in financial planning is moderating monthly expenses, which can help in solidifying your savings. However, if your salary seems to be insufficient as compared to your expenditures, even after trying different ways to cover your needs, it is recommended that you supplement your income by developing specific technical and hands-on skills. Developing your skills not only can it help you earn a part-time income, but also result in improving your job grade.

Survey results also yielded that more than 83% of respondents have no investment plans at all, which brings forth the lack of awareness around investing. On top of the lack of education around investment, respondents mentioned fear of losing money and the lack of funds to invest as a key deterrent to them.

Ms. Ambareen Musa, the Founder and CEO of says, “Savings and investments should go hand-in-hand. Start with a monthly budget and figure out what your basic necessities are, and come up with a percentage of your salary that you can save every month. I find it very useful to transfer that amount every month to a savings/investment account as soon as the salary hits the account. This way it is already out and the only funds left in your account is what you can use for your day-to-day expenditures. Once you have that sorted out, and have a regular savings schedule, you should start looking at what your retirement plan is and think about which investment track would suit your risk profile and your long term goals”.

In alignment with the Saudi Vision 2030, where promoting financial independence and savings has a significant play, Riyali and has made it a high priority to build awareness and promote financial education among the Saudi population.