Dirty Dinar

I’m excited that people are beginning to leave comments on my blog! I found two fantastic aggregators. One is the Personal Finance Aggregator and the other is the Kuwait Blogs Aggregator. I have been trying to follow blogs in both aggregators and leaving comments whenever I can. Now people are beginning to share their advice with me and it’s a wonderful feeling!

Bader left me a comment on my Monitoring my Progress post saying,

Hope you reach your goals even sooner, I have a system I’ve been using for a while now, each salary I get, I divide it as follows, 40% of it goes to my savings, 30% is divided up into a daily allowance, and the other 30% is used for bills and anything I plan to buy like cloths, a cell phone i’ve wanted, etc. Now, lets say that my daily allowance is for example 20kd, its not everyday that someone would spend 20 kd, sometimes more and sometimes less, it realy depends on what day it is. If you spend less than your allowance on any given day, you add that to your next days allowance, so if you spent 10kd today, tomorrow you would have 30kd and so on,because on work days, you might not spend much but on your off days you may spend way over your daily allowance but you have the remaining allowance from days that you didnt finish your allowance. Sorry for writing so much, Im really bad at explaining things Also setting goals, like ur doing, is also necessary. Hope this helps. All in all, I wish you the very best.

I love reading on how people budget and try to pay off their debt or increase their savings. Thank you, Bader, for your input.

I decided to take Bader’s budget and apply it to my own total pay of KWD 1163. The current budget I have for myself is to limit myself by spending only 663 per month. I will try to deal with cash only by withdrawing 100 at the beginning of every week and leaving 163 in my account for emergencies or extra expenditures (birthdays, etc.). The remaining 500 from my salary will go towards my savings.

The table below demonstrates my money breakdown according to Bader’s 40-30-30 % rule and my own budget.

As you can see from the table, we nearly have the same percentages allocated to Savings, Daily Allowances and Miscellaneous expenses. The one that is drastically different is the miscellaneous category. Bader budgets 30% of his salary on bills and purchases. I choose to keep mine on emergency standby in case I have obligations during the week like birthdays or surprise expenses.

Now I’m curious about how others out there save their money. Do you deduct a specific amount or a percentage of your salary?

The 3-day weekend was bad for my purse. I spent a total of KWD 74.480 from both my cash and bank account. I actually spent more but was reimbursed 50 in cash from my friends.

Losing my Way

I lost track of my expenses, which was a major slip-up. The only receipts I have in my purse are 7.640 for groceries and 9.500 for a cake. I need a better system of monitoring what I’m spending my funds on so I will have to hold on to my receipts, something I’m not used to for ordinary expenses. Usually, I keep my receipts after shopping trips for clothes in case I need to return anything.

Cash in Hand

Because I was reimbursed 50 in cash by my friends, my cash for this week starts out at 68.500 again, just like last week’s Purse Watch. I have to make an effort to stretch it out as much as I possibly can.

Account Balance

There’s 92.980 left in my account that I’m allowed to spend for the rest of the month. I have to be more diligent about every fils I spend from this point on in order to avoid dipping into my savings.

A good emergency fund can tide you over in times of unemployment for a period of 3 to 6 months. With my base salary of KWD 1000 per month I would need to maintain an emergency fund of KWD 3,000 to 6,000.

Typical advice from financial planners tell you to save at least 10% of your salary. Because I get a government supplement that’s over 20% of my salary I can afford to save a higher amount of money. With an income of 1163 my goal is to save quickly and that’s why I want to save up to 50% of my salary each month until June to have KWD 3,000 in my emergency fund.

My first priority is learning to control my spending habits by establishing a budget. I have KWD 172.149 in my current account. I also have KWD 68.500 in cash and a jarful of loose change. That gives me a total of KWD 240.649 to see me through until the end of the month without having to resort to using my credit card.

After writing up what a typical week is like for me I have determined what expenses I have during the week and what I can trim them down to and still maintain a social lifestyle.

My weekly expenditures are:

• Daily Parking 2.500
• Phone Bill 20 (My average monthly bill ranges from KWD 80-100)
• Lunch at Work 20
• Dinner Out 30
• Salon 20
• Gasoline 5

That brings my total to 97.500. I have not included shopping or miscellaneous expenses such as birthdays, travel, and random trips to the grocery store. I can tighten the hold on my expenses by withdrawing 100 in cash at the beginning of every week and recording every purchase I make. That would still leave me with 163 for emergencies.

Going through my weekly expenditures was an embarrassing exercise to go through, especially because I tried to lower my expenses to the bare minimum that I could survive comfortably on and that was 97.500. I’m going to be budgeting myself to 663 and that is still more than some families make in a month! They manage to pay rent, feed and clothe their children and save yet I have been incapable of saving anything for the past four years. It’s a shameful thing to admit. I really believe Kuwait needs to implement mandatory personal finance courses. Many people are in debt because there is a lack of awareness on how to control your finances.

My emergency fund is the first savings strategy I want to pursue. Kuwait may be sunny most of the year but you never know when that rainy day will come along. Once I reach my minimum goal for my emergency fund I want to continue placing 10% of my salary into it on a monthly basis until it reaches KWD 6,000. The other 40% of my savings will go into another savings account for investing. I have no idea what interest rates there are for savings accounts so I will have to start shopping around for a bank that gives a good rate.