Varied family fortunes

School fees, rent, travel expenses, food. Rising prices are costing families dear, as many struggle to maintain their lifestyles and save for their future. Staff reporters Zoi Constantine and Abbas Al Lawati ask five families what percentage of their monthly income goes on what and how their lives have been impacted by the increasing cost of living.

The only home children have known

The spiralling cost of living, particularly for those in the rental market, is driving families such as the Tajanlangits to ponder the possibility of a future outside the UAE.

Long-time Dubai residents John-Paul and Rachelle Tajanlangit from the Philippines say they are now considering moving to another country with their four children because of the high rate of inflation.

"As much as we would like to stay in Dubai ... my family is now considering following our relatives and friends who migrated [to] other countries recently due to the spiralling cost of living in Dubai," said Rachelle, who works at a brokerage company. "All my children - Mark, 9, Patricia, 7, Andre, 5, and James, 3 - were born here, this is their home."

Changing lifestyle over last six years

Tim and Rachel Jones and their two daughters Catherine, 13, and Olivia, 9, moved to Dubai six years ago to live the Gulf life, but life in Dubai is not as it used to be, at least in terms of the cost.

For one, the Jones save significantly less now as the spiralling cost of living makes it impossible to maintain both the desired lifestyle and savings. The falling dirham also means that the Jones have to think again before picking a travel destination or sending money home. "The dirham to pound exchange rate has swung around 15 to 20 per cent since I first came here. Now I avoid sending money to the UK. I prefer to keep my investments here in the region." Tim Jones pays up to 80 per cent more for housing today, and 50 per cent more for his children's education.

Making money work for the future

Ten years ago, Sundar Shanmuga packed up and moved with his young family to the UAE.

Dubai was very different from the boomtown it is today; the pace of life was slower. The cost of living was also such that the Shanmuga family was able to save a considerable amount of their income.

"Ten years ago, my expectation was that I would be able to save the equivalent of six months savings in India in one month in Dubai," said Shanmuga, 43, who works in information security.

Originally from Chennai, Shanmuga moved to the UAE with his wife Sujatha and their daughter Aiswarya, now 16. A year after their arrival, their son Visvak was born.

"In 1998, when we lived in Ras Al Khaimah, we used to come down to Dubai for shopping, which would cost only Dh300," he says.

Now, ten years on, managing their own finances and making their money work, has led the family to make decisions, including relocating from Bur Dubai to Sharjah, as the rents spiral out of reach.

New opportunities after Iraq experience

Hadi, Fadia and five-year-old Shams have been living in Sharjah for a year and a half. They have not saved a single dirham since moving here from war-torn Iraq. Unlike other expatriates, says Fadia, the Al Jassars didn't move to the UAE to make money "but to survive".

Despite the fact that two incomes come into the house, as both Hadi and Fadia work as architects in Dubai, the rising cost of living in the UAE could force the family to spend more than they can afford. "We brought some money with us from Iraq, which we have kept aside for emergencies. If we start using it, it won't last us more than a year," said Fadia."Once our savings from Iraq are over, we'll probably have to reduce our spending."

Trickle down effect

The UAE dirham has been linked to the US dollar since 1997. As the value of the dollar continues to decline compared to other currencies, so does the value of the dirham.

This means that expatriate remittances to their home countries will translate to less money in their home currencies, and that those whose income is in dirhams will find it more expensive to travel to, invest in, or import goods from places like

Europe, Canada and Asia. The dollar peg contributes to the rising cost of living in the UAE because a significant portion of the UAE's imports comes from countries whose currencies are not pegged to the dollar, such as those in Europe and Asia.

As the dollar declines, those imports become more costly for UAE businesses, and those costs eventually trickle down to the public.