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.

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.

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.

Kuwait looks to be following in the path the United Arab Emirates set last November. In November 2007 the UAE announced that they will be increasing government salaries by 70%. Of course, they have inflation to compete with.

In Kuwait, people always want more money or their loans dropped. Time will tell how much of an increase public sector employees will receive. I’m more interested in the last sentence of the article.

KUWAIT: Minister of Finance Mustafa Al-Shamali said the government is focusing on the issue of increasing the salaries of all government employees before the end of February 2008. Al-Shamali said the Word Bank has prepared a study about the salary raise issue and the study will soon be sent to the Civil Service Commission (CSC). The study will have information such as the average income of government employees in various sectors and departments, the size of price increases and inflation rates, the financial amounts needed to be able to cover these increases, and other types of important information related to this issue.

Al-Shamali said after the report has been reviewed by the CSC, it will then be submitted to the Cabinet so it can be approved. He expects that the salary raises will be issued on or before Kuwait’s celebration of independence and liberation day, which is at the end of February.

Al-Shamali did not give any details about how much the increase would be and did not say whether the salary raises would be one fixed amount or would vary depending on government positions or departments. He said it is not possible to specify a certain amount with the World Bank’s report. “But God willing, the salary raise will cover everyone and will satisfy everyone as well,” he added.

Meanwhile, the Minister of Interior Sheikh Jaber Al-Khaled said the government is concentrating on this issue and the employees of the Ministry of Interior, whether soldiers, officers, or civilian employees, will have their salaries reviewed.

The minister promised that a full study about the salaries of Interior Ministry employees would be prepared and he noted that the employees from this ministry deserve the salary increase.

In another development, the Ministry of Social Affairs and Labor’s committee for expatriate work affairs said they have achieved many feats in a short span of time.

One achievement of the committee was a preparation of a study about minimum wages in Kuwait and a study about issuing commercial licenses in accordance to local labor market needs. The committee said they also aim to further develop the private labor sector.

Published Date: January 07, 2008