Dirty Dinar

Always remember to count your blessings. As I read this article in the Kuwait Times I felt both ashamed at the way companies treat the people they employ and myself for not taking better care of my finances when so many people are worse off .

Agitated laborers disclosed the reasons behind the strike, despite being fully aware of the crucial departments they are employed in, like hospitals, Kuwait University etc. Voicing their grievances, they complained of nonpayment of salaries from 3 to 6 months. They also slammed the meager salaries they are being paid (KD 18), despite being contracted by the company at KD 40. Even this low salary is delayed over several months, they complained.

It really puts things in perspective. Where are all those people who chant at the doors of Parliament that they cannot live on their KWD 500, 700, 1000 salaries? How would they fare with only KD 18 at each month?

Another 3 month gap and I’m amazed at what happened with my finances! I was right not to give up on 2008! My finances are still a mess because I haven’t been keeping track of my expenses but I’ve bounced back somewhat. I quit my job after receiving a generous offer from another company and it’s helped me recover from my financial misteps, but I still have some months to go until I’m in the green again.

Here’s a run-down on my new earnings:

• I make KWD 1425 - KWD 1200 of which is my base salary and the rest are benefits granted by the company.
• I also get a supplementary allowance of KWD 310 from the government (Thank you to the last Parliament! Now let’s see if it keeps up with the inflation you’ve accelerated!).
• My deductions include my car loan and Social Insurance, which brings my total earnings for the month to  KWD 1411.867.

If I stick to my old budget I should be able to save KWD 1000 a month but I have to factor in my new financial state. I’ve accumulated debt since my old budget, with both a car loan and credit card debt. My car loan will take several years to pay off and in the months when I first took out my car loan I used my credit card a lot, but that should take a few months to pay off.

To counter the debt, I opened a trading account with KWD 560 and have invested in one stock which has gone up since I’ve bought the shares.

Life is a mixed bag of blessings. I’m glad my finances are back on track but I need to return to my weekly budget to better handle my money. I get paid by the end of this week and I’ll have to take stock of every fils I have to my name.

The title says it all, doesn’t it? I’ll spare you all from reading the post and just declare it.

Okay, first of all, I can’t believe I’ve neglected the blog for 3 months! Time flies when you’re spending money!

The last time I wrote here I was considering jumping into debt. I needed a car and I wasn’t willing to settle for a cheap second-hand car. A lot of you advised me against taking out a loan, others told me to think about car purchases seriously. I honestly had to take time out to figure things out for myself. In the end, I took out a KD 7,000 loan. I know, I know. It hurts but the good thing is that I shopped around for the best interest rates and I took out a loan that still allows me to save. I won’t bore you with all the details now, I’ll save those for another post.

In a nutshell, what’s happened in the last three months:

1. The government announced they were increasing salaries by KD120 per month (this is on top of the KD240 governmental allowance we get in the private sector)
2. I took a loan for KWD 7,000
3. Parliament was dissolved and I’m interested to see if new faces get voted in on May 17th!
4. I have gone on a few business trips that depleted the few savings I had
5. I started researching finance programs that will help me reach my financial goals

I need to update my sidebars. My savings are in a bad state, having been significantly reduced by both the new car and business trips. I have been spending without thinking. I need to get back to my budget! I also have to put down a sidebar counting down the amount until I’m debt-free.

The first quarter of 2008 has not been good to my savings goals. Like I said, my finances are a complete mess, but 2008 isn’t over yet! Now excuse me while I go read your comments and try my best to reply!

I got some bad news on Tuesday. It’s going to destroy my saving goals and put me in debt. I’ve been agonizing over the issue but figured I should share and see if anyone has some good advice for me.

I’ve mentioned from my first post that my car is in my father’s name. I’ve been driving this car for the past four years. Although I am the one who drives it, and usually think of it as my car, the reality is that it’s his car. My father had originally purchased it to be our driver’s car and it was - for a year or so. But we had to let our driver go and that meant we had an extra car in our garage. It happened around the time I was looking for a car to buy and my father persuaded me to avoid taking on debt and use the car we already had.

Now my father wants to sell the car I drive. He took this decision for a number of reasons and he says it’s about time that I got my own car. This is where my emotions and logic start sending conflicting signals. I have KWD 968 saved up. Other than that amount, I haven’t got anything to pay towards a downpayment unless my father helps me out. I’m not sure how I feel about that. We’ve discussed using some of the money from the sale of the car towards my downpayment. It will be taken as an interest-free loan that I will have to repay. I will need to get financing in order to buy a car so any money would be a help even though the whole purpose of this whole blog thing is to quit depending on my parents and manage my own finances.

He’s willing to share his car (the one he uses daily, not the one he’s selling) until I save up enough money to make a downpayment. That means the second I reach my emergency fund goal that 3,000 is going to be spent on the car. Not only will I lose my emergency fund but I will also have to go into debt. The degree of debt will depend on what car I choose to buy. I’ve spent the past two days thinking about this and it’s made me realize a lot of things about myself that I wasn’t aware of.

1. I have an aversion to buying a second-hand car. I don’t like the idea of someone having used the car before me. That’s a general hangup I have about all things second-hand, whether it’s clothes or cars.
2. If I’m going into debt I would rather buy a car that’s from a reputable company and with great service.
3. I’m superficial when it comes to cars. I want to drive a car equal to the standard of what I’ve been driving all those years. I don’t want to downgrade. I would rather go into higher debt than buy an affordable Honda or Toyota. I know it’s crazy but I’m thinking if I do go into debt why not go into debt for a car that’s worth it? I’d rather have a car that I’ll appreciate and enjoy for years to come even if I will need to pay off the balance for 4 years.

I have to start visiting showrooms and see what type of car I can afford. Then I’ll have to figure out how much I will have available towards the downpayment and how much I’ll have to take out on a loan. The next step would be to talk to my bank or check out other financing options.

Since news broke out that the government was considering increasing salaries, the co-ops have raised the prices of goods. Buying the weekly groceries has been more expensive than ever before and some believe the government has no choice but to increase salaries.

The Kuwait Times reports:

Government officials recently disclosed that they had almost finalized the salary increases that would include all Kuwaiti employees in government and private sectors as well as all those who receive social aid and retired employees.

Looks like we’re going to be getting raises soon. This will probably be the last increase for a long time. Any guesses how much the increases will be for the varying sectors? Of course, my interests lie in knowing how much the private sector will be getting.

Here’s a sad story from the Arab Times:

Kuwait : A Kuwaiti woman recently visited the Al-Rai daily to tell about her financial difficulties and offered to sell the retina and cornea of one of her eyes and a kidney to help her pay her debts, reports Al-Rai daily. The woman, who is a widow, is a former employee of the Ministry of Health and is a mother of three children. It has been reported the woman owes KD 19,000 to a bank and KD 5,000 to a company.

It’s incredible that the woman is in such a desperate state as to want to give up body parts. It’s the first time I’ve heard of something of its kind in Kuwait. One of my first thoughts was why the woman wasn’t employed at the Ministry of Health anymore. Is she retired? Couldn’t she find another job?

I hope she finds a way to become debt-free without having to resort to such extreme measures.

I finally got ahold of an Admissions Officer at the American University of the Middle East (AUM). The woman I spoke with was very friendly and as helpful as she could be under the circumstances. Unsurprisingly, a lot of the details about the University are still up in the air. That’s to be expected but I was still taken aback.

AUM admissions requirements for pursuing an MBA are:

1. A Bachelor’s degree
2. A TOEFL score of 550+
3. Taken the GMAT

I was told that they are not interested in a specific GMAT score. All they care about is that you’ve taken the GMAT. After you fulfill those three requirements, they will call you in for an interview.

Some issues that worried me are:

• AUM hasn’t determined the tuition rate yet - I guess they will wait to see how many people are interested in enrolling to decide on that figure. I expected
• The campus is in an area I’ve never heard of before - I think it’s called Alagaila but I’m not sure of the spelling. It’s located somewhere near Fintas.
• The University can’t seek accreditation until it has its first graduating class - Is it worth the trouble to attend an MBA program only to find out that it won’t be accredited?

A friend of mine emailed me this:

Effective from February 7th, 2008, the ticket price for attending a cinema show is increasing from KWD 2.500 to 3.000. In my opinion, a 0.500 increase isn’t too bad.

I was surprised to see that there were discounted prices for Monday shows. I wonder if people take advantage of this offer. I don’t think I’ve ever seen the cinemas full on Mondays. It’s worth attending when it’s half the price of an average ticket!

VIP cost KWD 6.000 which is double the price of an average ticket. I haven’t been to the VIP cinema yet. Is it worth the extra price?

As some of you may have noticed my Emergency Fund amount has increased from KWD 668 to 968. I’ve put aside 300 from my January salary towards my savings, which has me 32.3% closer to my goal.

I was originally supposed to set aside 500 from my salary but I decided on a surprise splurge, my hair treatments. They’re going to cost me 200 so I deducted the amount from my Emergency Fund money. If I continue to save up 500 a month until May, I’ll reach my goal in time so I’m not too worried.

With the return of the money I had lent out, my Emergency Fund had more at the end of January than I expected. My goal was to have KWD 500 and I ended with KWD 968. It’s not a bad start to the year.