Monday, September 14, 2015

Why Arab Families do not save money?

Waste not, want not. We have been hearing since a long time but recent events like the oil market dipping has made us realize the true importance of this. It has been noticed that Arabs are not truly aware of the importance of saving money and spend it on unneeded things. This is a huge social and economic issue which, if not tackled appropriately, can haunt Arab families in the near future. It was recently brought to my knowledge through an interview on the Al-Arabiya channel that most Saudis spend their salaries on personal services (22 percent) and rent and utility bills (19 percent).

It has been noted that when the parents are more educated the average money spent in that household is also higher. Let's compare Saudi households to households around the world. For instance, a family from South Korea, Taiwan or Japan will spend the larger amount of their income on education while the Americans will spend it on telecommunications and transportation. At the same time, France focuses on housing, health and luxury items like perfumes and cosmetics. The Germans choose to spend it on entertainment and costly modern gadgets. The developed countries spend so much money on their children that if calculated, we could provide for at least ten families from underdeveloped countries.

We could simply take an example of daycare fees for a child in UK; it's SR 3,600 per month for each child and around SR 1,500 in U.S. either of these amounts could benefit a poor family from Sudan or elsewhere so much, maybe even be sufficient for them for a whole year.  Arab families spend a huge amount on food every month. If you ever see them grocery shopping in the mall, you will realize how spendthrift they can be. Not just that, it has even been reported by Al-Watan daily that Arabs care only about food. Egypt is at the top spending 52 percent on food. Then we have Iraq at 49 percent followed by Syria at 48 percent, Lebanon at 44 percent, Jordan at 40 percent and Saudi Arabia at 32 percent. They need to set their priorities right and learn the benefits of long term saving and need to realize how education is in fact, an investment.

Arab families are not aware of the importance of money or at least it appears to be so. They need to be taught to save and spend it on truly important things instead of materialistic stuff or use their hard earned money for the purpose of showing off which is completely unnecessary. Firstly, we should not judge someone else. And even if someone does choose to judge you, we shouldn't care about other people. They don't have to live your life, you do. So spend wisely.

We need to reduce impulsive shopping purchases and focus on the truly important stuff. We need to invest and save. Invest in production, education and areas that truly pay you back with time. It's not necessary for you to be earning a huge salary to be able to save. There is quite a famous proverb, "Stretch your legs according to the size of your quilt". We need to make this our motto and be reasonable with our spending so that we can save up no matter how much we earn.

Source: Saudi Gazette

Money Saving in Saudi Arabia
  1. Why Saudis take loans to fund Vacations?
  2. Tips to save Money while Travelling out of KSA
  3. 13 Problems of people who cannot save Money
  4. Why Some Expats Fail to Send Money Back Home?
  5. Some Bad Habits causing Heavy Losses to Expatriates



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