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 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?

Everywhere I look lately I have been seeing the billboards for AUM, the American University of the Middle East. It’s a newly established private university in association with Purdue University. They’re accepting applicants to begin in October 2008.

I googled the university and found nothing about it. It’s a fresh university which means it’s not accredited. Is it worth the risk starting an MBA course at a university with no credibility? The only thing going for it is that it’s associated with Purdue University. According to their website the Krannert School of Management was the No. 1 MBA program in 2004 and 2005.

I had previously considered enrolling in Kuwait Maastricht Business School but several people advised me against it. I took their advice because they had first-hand knowledge. They were attending the program and told me some of its flaws. Among their complaints were the fact that the instructors were difficult to understand and didn’t teach well, the low caliber of the students, and quality of the program. They all advised me that if I wanted to pursue an MBA to go abroad.

There are a few reasons why I can’t go abroad to pursue higher education, among them are:

1. I can’t afford to pay for tuition and living expenses abroad. I’d need a scholarship to help me out and my GPA isn’t good enough to qualify for a scholarship.
2. I prefer doing a part-time MBA because I don’t want to quit my job and have to go through the job search all over again in a year or two. I’m happy where I am and don’t want to risk the alternative. Also included is the opportunity cost. An MBA in Kuwait doesn’t count for much. If you’re lucky your workplace will increase your salary by KWD 50. I haven’t heard of anyone with an MBA who has benefited greatly from having one.

Why get an MBA then? When it comes to the future I always imagine the worst possible outcome. I don’t want to come to a point in time when I will get passed over a promotion or if I have to leave Kuwait and the only jobs I can get require an MBA. I would hate an opportunity to pass me by because I didn’t have the educational requirements. An MBA may not count for much in Kuwait now but it might open many more doors in the future.

I’ve called AUM for more information (2240169) and they haven’t gotten back to me yet so I’ll keep you updated. If anyone has any thoughts on the issue I’d love to hear them. I’d be interested to know if you have an MBA and if it’s done anything towards your career or career path.

I’ve been a bad girl. It’s only the beginning of the week and I spent over half of my weekly allowance on pure vanity. I spent KWD 57.500 today at the salon.

Last week, when I was at the salon getting my weekly blowdry, my hairdresser mentioned that they have a treatment for my long curly hair that will eliminate my bad hair days for the next six months. The treatment will take place over a period of four sessions. Each session is an hour long and will cost me 60 dinars. The final result will reduce the coarseness of my hair and eliminate frizz. It will also eliminate my need to get my weekly blowdry. It will save me time AND bad hair days!

I got there today I arrived fully prepared to spend the money. The process was a little boring. My hairdresser washed my hair clean, and then proceeded to distribute the product on my hair brushing it through. As I’ve mentioned, my hair is long and curly so it took a while to get it all covered. Then she had to use a hair straightener over my hair to lock the product in. When she finally straightened all my hair she took me back to get my hair washed and a masque put on my hair. This was the relaxing part. She spent ten minutes massaging my scalp and it was the loveliest feeling. After that she washed the masque out of my hair and blow-dried it.

When I got to the cashier I was ready to pay KWD 60 but they only charged me 50. I was charged KWD 10 less and I got a free blowdry! The cashier told me that I will continue getting a free blowdry for the next three sessions. My hairdresser recommended that I use a special shampoo to supplement my treatment and I bought it for KWD 7.500.  That’s what brought my total expenditure to KWD 57.500.

How much does taking care of my hair usually cost? My usual blowdry costs me KWD 6 and I always tip my hairdresser KWD 1. Over a period of six months I spend KWD 168 on blow drying my hair at a salon. The treatment I’m going to continue will cost me KWD 200. I don’t mind spending the extra money when it will dramatically reduce the time I go to the salon.

To all my girls out there, what have you spent in the name of beauty? I know that we sometimes get ridiculous when it comes to hair, make up and clothes.

I’ve always believed men had it better when it comes to saving money from haircuts to clothes. Guys, how much does it cost you to look that good? 

February is going to test my budget because I have 5 birthdays that I will need to buy presents for. Three of the five are really close friends so I will have to put a little thought into what I get them and ways to cut down costs.

How much do you spend on a gift? I usually try to limit myself to KWD 50 because I learned in the past that it sometimes makes people uncomfortable when you buy them something expensive no matter how close they are. They sometimes feel they have to equal or exceed my present to them when my birthday comes around.

The best thing about gifts is that it’s the thought and meaning behind them that counts so I can find ways to cut down on my gift spending by being creative and coming up with unique presents. This can range from creating a scrap book to sending a birthday package full of memories you’ve shared.

How much do you usually spend on average on gifts?

These days I have been reading Intlxpar’s blog, delving into the archives and perusing recent posts. She has a beautiful way with words and one post of hers, “Well of Good Will” discusses her personal philosophy when it comes to relationships. It resonated deep within me and caused me to reflect on my friendships, the long history of some and short span of others.

I originally wanted to share this post and a story of one of my friendships that has been on my mind lately but I believe that it is a story for another post and another time. Maybe when it is not so fresh I can write about it more objectively. For now, I’d like to share Intlxpatr’s words with you.

In a relationship, the longer you are in it, the more deposits you make into the well of good will. It is the little things you do in a relationship - how you hold the door when the other is carrying a package, how you bring a bowl of hot soup if they have a cold, how you pick up their meal when they are short of cash, how you listen when a friend has a problem, or remember to ask about their mother when she is having a bout of ill health. These tiny, consistent deposits into the well grow, they earn interest, they earn dividends, small as they are, they fill the well to the brim.

The well of good will never overflows, it just grows to hold the treasures of the relationship.

From time time time, circumstances will arise which require a withdrawal from the well of good will. We all have circumstances in which we become selfish, we strike, even at those who love us, because we are in pain. We all have times when we are tired and say something mean. We all have rough patches in our lives when we have nothing extra to add to the well of good will, and make sizeable withdrawals against the good will of those who love us.

How many people in your life do you make allowances for? Do you forgive some of your friends for shabby behavior towards you and yet begrudge others from doing the very same thing? There are some friends for whom I can never hold ill wishes, no matter what they do.

Like I said on Intlxpatr’s blog, in the grand scheme of things they are welcome to draw goodwill from the well for as long as they like, one thing that time can never take away is the history between us. 

The Good News

My friend who owes me KWD 1,000 called me and told me that she will deposit the money into my account on Monday.

I’m trying not to get excited over the fact that she is returning back the money so early (or even at all!). She borrowed the cash nearly four and a half months ago and I thought I was never going to see it again.

The Bad News

I have to book a hotel for my business trip next month today because I found a good deal that may not be available by Monday. I’ll have to charge KWD 332.511 on my credit card which means I’ll have a debt again.

I’m hoping my friend does manage to pay me back on Monday. If that happens I can pay off my credit card and have 667.489 remaining which will go towards my Emergency Fund. My company is giving me a per diem while I’m away but I think it only comes to be around 40% of the hotel expense. I will need to use it for transportation and meals so the per diem won’t be money that’s reimbursed back into my savings. It’s a one-time loss that I’ll have to work around.

I’m counting a lot on the good news to offset the bad news.

Three days ago I had KWD 68.500 in cash. Today I opened my purse to find 54 in cash remaining. Where did the 14.500 go?

• Parking - 1.000
• Gas - 5.000
• Lunch at Work - 5.500
• Dinner Out - 3.000

Parking
This is an expense that I can’t do anything about. Tomorrow is a day off so I will be saving 0.500 on parking then.

Gas
Again, this is an expense that I can’t do anything about. The price of gas is what it is and I needed a full tank to get me through this week and the next.

Lunch at Work
Of the KWD 5, only 2.300 was the cost of my food. I realize that I have to stop treating my coworker to lunch until I have better control over my finances.

Dinner Out
My dinner cost KWD 2.750 but I included a 0.250 tip. My average dinner out is around the KWD 7 mark, so spending 3 was actually a bargain for me. It helped that we were at a cafe and that I only had a salad.

Goals

Over the weekend I plan on spending time at home with family and I have been invited to my friend’s house for lunch. That will somewhat curb my expenses. However, I have a birthday that I will need to chip in to buy a birthday cake for and present so my good intentions may come to nothing.

I’ve been reading a lot of personal finance blogs and saw that many people mention their salary in terms of annual earnings. For example, “I make 40K+”. I’ve never heard that said here in Kuwait.

Companies pay a weekly or monthly salary. I haven’t come across any employer that pays an hourly rate. Employers pay a base fee and sometimes you’re entitled to government allowance or various company allowances (housing, relationship, car, etc.). Not all companies have a bonus scheme and I have never heard of anyone getting a signing bonus. When people ask how much you make they mean per month instead of your annual earnings.

I was curious how I ranked compared to the salaries in the United States so I tried to work out how much I make in US dollars. To calculate my earnings I took today’s currency rate of 1 KWD = 3.663004 USD.

My monthly salary of KWD 923.117 over twelve months comes to KWD 11,076. When I converted that amount to dollars I found out that I make $40,575.

However, I get a government supplement (KWD 240) in addition to my salary each month which bumps my total up to KWD 13,956 annually.

That pushes my total earnings to $51,126. The difference is $10,550! That’s not a bad chunk of change.

Kuwait doesn’t tax individuals (yet!) and the company I work at does not pay out bonuses so that $51,126 is the full amount I get to take home.

Now some problems with my example is that I don’t get taxed and I live under my parent’s roof. That skews my comparison to those living in the United States. I have more disposable income. That’s a good thing but doesn’t make for a tidy comparison.

Of course it doesn’t help my case that I’ve continuously lived beyond my means. I have no idea if I’m making what I should be making in my job position with my experience. I will have to continue my research into that.