Friday, 11 September 2015

Why Saudis take loans to fund Vacations?

Money is essential need of our daily lives. Money is important for leading a life simple or luxurious. There are two types of people, one are those who prefer to save money for the rainy day while others want to spend it carelessly to meet their comforts. It is found that some Saudis are more likely to take loan for going on a tour or buying expensive cars rather than spending it from their savings. Economist estimated than only 10% of Saudis are aware about their spending patterns while 90% don’t emphasize what they are doing to themselves.  About 29% gulf population prefer saving while Saudi citizens are least interested in saving and 89% Saudis rather burrow loans although  they are well informed of the repercussions of economic stress and burdens. Saving is the secret power of getting yourself unstuck. In solely 2014, about 3.5 million Saudis had taken out loan debt which sits around SR 400 billion.

Osama Saleh Al-Shamri, member of the Human Resources Development Fund mentioned clearly that lack of saving patterns has raised many financial burdens which are caused by less awareness of having a budget and spending plans. People buy cars taking a loan. Some are unable to pay the loan so banks take over the cars from people who don’t afford to repay the loans. This is called seized cars. This condition can be avoided if people purchased cars as per their income level. Al Shamri praised those families who lead lives according to their financial plans. He criticized of the improper use of funds and lavish spending which sometimes proved to be disastrous. One of the reasons why individuals spend more than they save is to feel the sense of higher quality lifestyle, said by Social worker Meshaal Al-Qurashi

Human resources development manager Asia Ibrahim Dawood Mayet said that family plays a vital role in spoiling child’s habits of extravagance and promoting them to spend lavishly. She says that TV commercials are other spoiling factors that convert people into spenders. She said that schools should guide children about the money planning pattern and proper budgeting. Kids love to buy brand-name products, the latest fashions, and newest trends in electronics.

Parents should start by making kids earn money and not just giving it when needed or wanted. They must differentiate between necessity and luxury. Many kids do not have responsibilities at home that earn them an ‘allowance’. Their parents never say no to anything. They don’t feel spoiled and are just like everyone else. These kids are members of a generation that has grown up without knowing anything but prosperity. If these spending habits persist, today’s teenagers may be headed for trouble.

Saving should be practiced from young age. We should save money for emergency crises. Unexpected emergency expenses can come in many ways like sudden hospitalization, job loss, an accident. Financial crisis can happen anytime. Therefore, saving money for emergency can give much needed support to overcome from crisis.

Source: Arab News

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


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