Dirty Dinar

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.

I have KWD 172.149 in my current account.

That is all the money I have in my name.

I live in my parents house.

My car is in my father’s name.

I have no savings or investments.

I am 28 years old.

In 2007 I paid off my credit card debt and car installments. I loaned a friend KWD 1000 that I have yet to get back. Until I have the money in my hands I can’t count it as part of my net worth. It’s still a pitiful amount for a 28-year-old woman who has had a regular job for four years! At least, I’m starting 2008 debt-free.

I need to start planning for a future. I want a financial cushion that I can depend on instead of counting on my parents to help me out in emergencies. For the past four years I have been living from paycheck-to-paycheck, occasionally living outside my means and racking up credit card debt.

In 2008 I want to:

 

Save money

Invest in the Kuwait Stock Exchange

All the finance websites I have been reading recently suggest having 3-6 months worth of your salary in an emergency fund. I work in a medium-sized company and make KWD 1000 with the government supplement of 240. My workplace automatically deducts a small amount (76.883) that is placed in social insurance. I can collect that amount when I retire. That means I make a total of 1163.117 each month and I don’t have a fils saved up.

My emergency fund should have KWD 3000-6000. My first goal is to save half of my salary for the next six months until I reach my target. Then I can concentrate on my second financial goal for the year.

Now I have to go see how much money I have in my purse. With some discipline I can make it on KWD 172.149 until the end of the month when my salary is deposited into my account.