Dirty Dinar

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.