Tips for Fasting

A few tips to better manage your fasting experience:

- When it is time to break fast, do not over-eat; try to slow down, take it easy, and don't push your stomache. This also goes for eating in general during the non-fasting hours; if you try to keep your stomache as full as possibly during the evenings, it's going to feel comparatively very empty in the morning, and you'll just feel hungrier (especially true for over-eating at Suhoor time). If you try to make it during the day with not so much food, your body adjusts, and you'll find it easier to fast.

- Drink lots of water and fruit juices over the non-fasting period, to adjust for the periods where you aren't taking in any fluids. Try to cut down on fruit 'drinks' (which are technically just flavored water and sugar), soft-drinks (coke, pepsi etc), and other non-natural beverages, which might actually cause you to feel more dehydrated the next day (due to excess amount of sugar and processed contents).

- Avoid fatty and fried foods, which give the illusion of filling you up. They make you heavy, but within a few hours you're hungry again. Try to eat more fruits/vegetables, and natural foods that include fibre, grains and seeds. Especially useful are:
* Dates; which are an excellent source of sugar, fibre and carbohydrates
* Almonds; provide protein and fibre with less fat
* Bananas; provide potassium, magnesium and carbohydrates

- Try to cut down/avoid foods with too much processed sugar (especially the sweets we find so many of during ramadan). Sugar is important, but it is much better to get natural sugar from dates and other fruits.

- Also try to avoid salty foods closer to suhoor time. These will dry you up and you'll end up feeling very thirsty the next day (Personal experience; avoid tikka late at night!)

- Overall, take it easy on the food, don't overstuff yourself, and use common sense. Try to take in more natural foods, and try to cut-down on processed ones, and just east wisely.

Hope these make for a better fasting experience; if anyone has any other tips, feel free to share them with us :)

Getting a job in Bahrain

I've been faced with a lot of people who talk about how hard it is to get a job in Bahrain. Well, not actually GET a job; just getting a good one (there are a lot of crappy jobs out there).

The job process here takes a lot of damn patience, a lot of wasted time and effort, and gives a lot of disappointment, but if you put in the effort, hopefully you will be able to get something reasonable out of it.

First thing you need to work on is your CV. I don't want to go through all the details of how to write your resume, because that's just going to take a long time; but what i'll do is post some of the bigger mistakes i've seen in CV's that people have made:

- DON'T make your resume over two pages; seriously, unless you have 3 PHD's, tons of working experience, multiple awards, etc, no Human Resources manager is going to even bother looking at anything more than a page or two! If you're a recent graduate with one or two jobs of experience, one page is enough. Think of it this way; these guys recieve hundreds of CV's every week, they're not going to take the time to sort out through every single page you have. And if it's too long, they just might throw it in the trash.

- Please, frickin please, check for spelling mistakes! You will not believe the amount of CV's that get sent to HR with "Graduated from Univrsty of Bahrain" and so on. HR people just love to spot mistakes, laugh at them, and throw them out (if they can't do their CV right, you think they're gonna do their job right?). Just please, double check your CV with a dictionary. And a spell check. Oh, and a grammar check would be good too.

- Try to condense things in your CV into main points, instead of sentences. Don't write; I graduated last year in August 2006 from the University of Bahrain, with a Bachelors Degree in Marketing & Management, and a GPA of 3.2. First, it takes too much space, second, the hiring managers don't have time to go through every single sentence you write. Instead you can put:
Univ. of Bahrain, Aug 2002; Bs Marketing & Management (GPA 3.2)
It still passes on the same information, without taking up as much space.

- Please try to make it look neat and tidy! I've seen so many unorganized CV's floating around, where you can't tell what job they had, where, and so on.

Ok, so now you have your CV sorted out, it's time to apply. You need to apply EVERYWHERE. It doesn't matter if you have a specific place in your mind that you want to work at; you're probably not going to get that job, and you need to keep your options open, anyway. Print millions and millions of copies of your CV, fold them up and put them in envelopes, and run around from place to place applying everywhere you can think of, from the banks, to the universities, insurance companies, and so on. When that's done, try applying through email, and through the post. You need to totally penetrate the system; the problem in Bahrain is there's no set standard; some companies aren't advanced enough to look at email job applications, while others will think of paper CV's given in as backwarded and won't consider them, so you need to do it both ways.

If you have specific places you want to apply to, call up, get the name of the HR managers name, and write that name on the envelope you give your CV in with (or in the subject section of your email). This way, it goes directly to the person you want it going to, rather than be forgotten somewhere in the HR department.

Follow up a week later or so, give them a call, speak to HR; tell them you've sent in your CV and if anything has happened - this way, just incase someone has actually missed your CV, you'll either get them to find it and actually look at it, or perhaps they'll ask you to send it directly to them. Either way, it focuses a bit of light on your CV. And trust me, with the amount of CV's being given in every day, you're going to need it!

There are a lot more tips I can give, but again, I can go on with this topic for ages and ages. I hope the above tips help a little! Good luck on getting that dream job! (By the way, i'm not an HR person; I used to manage a branch and people used to come in and give me CV's all the time, so I would have a little laugh sometimes. Mean, I know.)

Fixing your Money Problems - 9

Part 9: (Paying off Loans & Credit Card)

If you already have loan and credit card debt, pay-day might be both a blessing and a curse. It always feels good to have your salary credited to your account, but looking at all the deductions and money you have to pay for your debts, just makes your salary seem like it wasn't worth it!

Now, when it's time to pay off those debts, you need to prioritise; some people have a number of credit cards, and more than one loan. For banks, time = money, which is the concept of interest; so the sooner you pay off your debts, the less money you're going to end up being charged for overall.

How do you prioritise? Well, your most important goal here is to know as much as you can about your debts. Most people take on debt without knowing the specifics of each loan, credit card, etc. Unfortunately, the sales people at our banks aren't obliged to tell the customer these details; the information they seem to best divulge is how much money you get, and what you pay per month. All other details get lost in the sale.

First thing you're going to need to know is how much interest you are being charged. Interest rates vary from bank to bank; some mention a flat rate, some mention a variable rate etc, and this rate is calculated differently; so when one bank says, we charge you 2% on your credit card, another bank says were charging 8% on your loan, and another mentions 5% on a loan, in reality, the cheapest interest might actually be the 8% (the 5% is calculated on a flat basis, and the 2% calculated monthly, so they end up higher than the 8% rate).

Without going too much into detail about the specific calculations of interest rates, you need to get a standard interest rate calculation so you can compare between different banks. This is usually called an APR. Just ask for this rate; banks have to give it to you if you ask for it, and it's basically a uniform calculation including all charges and costs.

Anyhow; figure out what each of your loans/credit cards are costing you in interest per month, and aim to pay off the highest charging ones first. In almost all cases, your credit card will end up costing you the most, so you need to dedicate as much money to paying that off.

Credit cards charge you a minimum balance which is usually 5% or 10% of the outstanding amount. To really make a difference, try to at least pay double that. Sure, you might have less spending money that month, but the sooner you get rid of your credit cards, the quicker you're going to be able to start living a beautiful debt free life again. Make sure you pay on or before the due date every month, because late payment charges are usually reasonably high. Also, DO NOT USE the credit cards after you pay them off. If you really can't handle the temptation, hide them somewhere at home, or get a pair of scissors and cut them up.

Second; paying off your loans. Loans are structured payments; the bank has already made a plan on how they will take back their money with interest, and they're not usually willing to change that for you unless they make you pay extra fees first. You can't go in to most banks and tell them "I have an extra 100BD in my account, please use that to deduct part of the loan". What you're going to need to do is save up enough money and pay off the loan all at once.

First you will need to find out the basis on which your bank is charging you interest, and if any of it will get deducted for early payment. Say you take a 7-year loan; for some banks, if you pay it off after 3 years, you're only going to be charged interest for those 3 years, and the remaining period interest will get deducted. Other banks might not; they might charge you the interest for the full period regardless of whether you pay it off early or not. In the second case you're pretty much screwed whether you pay the loan now or later, but in both cases you're going to need to find out how your bank works. Information is what's important here, get as much of it as possible in order to make your decisions.

Again, like I mentioned in previous posts, PAY OFF YOUR DEBTS FIRST! Do not go out and spend money on shopping, etc, and then decide to pay off debt with whatever is left, because by then you probably won't have much, and your debts will increase and your interest will increase with then. Debt can turn into a monster if you don't control it the right way. I know the issue of debt is usually very difficult for most people to deal with, so again, if you need any direct help with your specific issue, you can shoot me a message and we can talk about clearing up your personal situation.

Fixing your Money Problems - 8

Part 8: (Credit Card Debt)

Credit cards have come a long way; almost every bank offers one, they generate unbelievable amounts of profit, make internet shopping possible, and they're the very basis for the creation of cashless societies.

So what's wrong with them?

Well, the fact that credit cards, when not in the right hands, can turn into something similar to a full scale train-wreck at high speed. That keeps going, and going, and going...

Their concept is very simple; you get a card with a credit limit (let's say 500BD). You can use that card to buy things upto that limit. So lets say you buy a sofa for 200, which means you have 300 more dinars you can use to spend on that card. Normally, you can't exceed the limit, and would have to pay back some of the debt to be able to use it again. Any amount not paid off at the end of each month, you have to pay interest on, which is deducted from your limit.

Interest rates seem pretty attractive as well! Some banks post rates of 2%, while others post rates of 1.8% or close to that. When you compare it to loan annual interest rates, of 8%, 9% or more, they look pretty damn attractive right?

Wrong.

The credit card interest rate is per MONTH. Calculate that and you're actually looking at something closer to 20-25%. Now, that's a LOT. If you had debt going at that rate, it would double every 3 years.

Anyhow; the way credit cards go, they give you the very attractive option of paying a minimum of 5% or so (depending on the bank). It seems attractive because you're not paying a lot - on 200 dinar new TV, you end up only paying 10 dinars.

It's a very clever system; you think you're paying off your debt with a small amount, and pay the minimum. However, remember the 2% interest? You pay 10 dinars, so your debt is down to 190. Then interest creeps up, and you get hit with around BD4 of interest, so essentially you've only paid BD6 off your debt (i'm rounding up figures). It keeps going and you end up paying huge sums in interest over a LONG period of time.

Then there's also the high charges if you forget to pay your monthly bill on time, as well as your card insurance fees, annual fees, or whatever else fees. All tiny small costs that add up to form a giant monster that feeds on your salary.

The other thing with credit cards is, if you have them in your wallet, thats incentive enough to spend money on something you don't really need. You see something in a shop; thats a nice TV, thats a cool phone etc, and then you end up with more and more debt.

Using credit cards reasonably needs a lot of self-constraint; a lot of people use them for impulse buys, etc. Again, small purchases here, small purchases there, they all add up. Don't carry them around with you - leave them at home otherwise you'll probably end up using them if you see something you like. If you need to use them for something like shopping online, use them, and pay them off immediately (its best not to get lugged with interest and late payment charges). Don't consider them as extra cash you have; leave them for emergencies and travel.

Even then, anytime you do use them, make sure to pay them off as soon as possible; credit card debt adds up QUICK if you leave it to grow; definately more serious than loans.

Another thing is, many banks offer you unbelievably high credit limits; your salary might be 500BD, and they decide to offer you a 2000 dinar limit. Don't go for it. If you want to take out a card, the best thing is to try and keep the limit somewhere at around half your salary. If you go overboard and spend it all, your still not in a very dangerous spot, and can afford to pay it off without much difficulty.

I guess thats a good basic intro to credit cards; just be careful and use them wisely :)

Fixing your Money Problems - 7

Part 7: (Loans & Credit Cards)

Most of the previous guides talked about very simple saving and spending issues; things most people don't really think about or consider, even though they are mostly common sense. Anyhow, in this guide I will start talking about borrowed funds; loans and credit cards.

Bahrain has a pretty big problem with loans and credit cards; a large part of the population have gotten themselves into debts they can't handle, and unfortunately don't have too much to show for it in return. A lot of people here take out loans and cards for the wrong reasons, and end up burying a financial hole for themselves; it's become a social dilemma, and as soon as someone works they 'HAVE' to take out a loan.

The whole situation with the problems of loans needs more awareness. If you're one of the lucky few who haven't yet taken out a loan or card, don't. Well, at least not until you know how to use them the right way; using them without being aware of the problems that can follow is just like pushing a self-destruct button. However, utilizing them the right way can do a lot of good for you.

Lets talk about loans specifically in this guide, and credit cards in the next one.

Loans:

The concept of a loan is very simple; you borrow a certain amount of money, and pay it back with interest, divided over a period of time. Most personal loans can be paid back for over 7 years, while other loans (mortgage, business etc) can be taken for as long as 30 years (some countries even go up to 50). In other words, you're spending tommorows money, today.

Human nature thinks about the period that is 'now', and what they need today. Loans deal with much longer periods that most people don't consider at first; so automatically we have a problem.

When you take out a loan, lets say the bank tells you "We'll give you five thousand dinars NOW for only a small payment of 85 dinars a month", so you think, great! I get the cash NOW, and 85 dinars is such a small return. Overall, if you consider a payment period of 7 years, you realize that you pay a total of 7,140 (ie, that's an extra 2,140 dinars). That isn't a small amount of money (its paying back a little under half of what you borrowed, extra).

What makes it worse, is when people spend the cash from their loans on perishable items; say you buy a laptop that might stop working, or become outdated after 2 or 3 years, and pay the loan back over 7 years. So even after you dispose of the laptop, you're still stuck with payments for a few more years.

This concept is the same for cars; you buy a car, brand new. As soon as you drive out of the showroom, its value goes down, and keeps getting reduced. On the other hand, your loan, with time, increases in value with the amounts and interest you have to pay. Again, some people buy a car and get bored of it 3 or 4 years down the line, and then sell it. They're still stuck with the payments, though.

This concept of using loans to pay for perishable items, and dividing items over longer periods than are reasonable is one of the bigger financial problems we have in Bahrain. Also, you don't consider the installment amount to be very high; suppose your salary is 500 dinars, and you get an loan where you pay 150 a month. That's fine; you think you still have a good 350 dinars a month to spend.

But then, you have your phone bill (20bd), your internet bill (another 20bd), your monthly gas expenses (40bd), among others. Lets assume with those fixed bills, you have BD270 left. Not so much, but still reasonable.

Now lets say you got married, and need an apartment, so you find a really cheap one for BD120 a month (which is very unlikely by today's property prices). So you have BD150 left. Ok, you might be pushing your budget a little, but at least you have your own place, right?

Oh but wait, there's also the electricity and water gas bills, and municipality payments. Lets say they come up to BD30? So now you have BD120. Is that even enough to live a reasonable lifestyle?

That BD150 you pay for your loan doesn't look so small now, does it? If you weren't paying it, you would have more than double the amount you have now to spend. Truth is, your expenses WILL increase with time. Unless you have a really good reason, having an extra loan expense for the future isn't really a great idea.

If you're considering getting a loan, THINK. Why are you getting one? If its to buy a bunch of things you want (want, ie, not things you need) ie, laptop, new furniture, etc, then its a really bad idea. If you're really stuck and need those items, at LEAST get a loan thats going to last as long as the items are. If you expect a laptop to last 2 to 3 years, don't get payments over 7 years! Sure, the installments are lower, but you're paying a lot more interest in the long run, plus you end up paying for the item long after it falls apart. If the payment is higher than you think you can afford, then the item is too expensive for you to own. Leave it, save, and wait till you collect enough to buy it.

I personally don't think any loan is worth getting for perishable items - save up for those, and buy them in cash. If you want to get a loan, get one when you're buying a property (ie, land, house etc), where the value of this item goes up as the value of the loan goes up, and sometimes, the property value exceeds the cost of the land (so you can sell it, pay off the loan and still come out with a good profit). Again, even getting a loan for an investment is still risky; you might buy stocks that crash and end up paying your loan for years for nothing. Just really consider why you're getting the loan.

Buying something with a loan? If you don't need it, it really isn't advisable to spend that money on it, since the cost of whatever you are buying is increased with interest. Always look at the total value you're going to pay back, don't look at the monthly installment - thats just a decieving factor.

I'll talk about loans in more detail later, and focus on what to do if you already have a loan. Next post: credit cards.

Fixing your Money Problems - 6

Part 6: (Manage your monthly spending)

Ever had the situation where, after you recieve your salary, you go out and buy all the things you wanted to but couldn't from last month? And go out to restaurants maybe, or shopping, and generally spend quite a bit, because you know you have a lot of money in your account?

Has it ever happened that three, two or even one week into the month, you realize, oh no; you managed to spend most of your money, and end up living on a budget until your next salary? And perhaps you also realize that there are unpaid bills, so you end up waiting for the next months salary to pay last months bills?

A lot of people actually live this situation month by month, or a similar one at least. Hopefully this post will help you fix that. To manage your monthly salary and how to spend it, you should divide it into three things; lets call these 1- monthly bills, 2- savings, and 3- regular expenses.

Monthly bills should include anything that needs to be paid; electricity bills, phone bills, possible loan or credit card payments, rent, etc. Savings are amounts you want to put aside for the future, and regular spending includes everything else, such as food, gas, shopping, etc.

Now, in order to not get yourself in financial trouble, you need to organize how to divide your money between these three. The reason most people end up in problems is because they prioritize the wrong way; they end up spending money on their regular spending first, then pay their bills, and reach a point where they realize, oops, I spent a little too much. Little or no money is left over to be saved, so they decide, maybe i'll save next month. And so on it goes.

The way you should be prioritizing your spending is as follows - Lets assume your salary is BD500:

1- Paying off IMPORTANT monthly bills

If you have any loans, then they most probably get deducted from you account automatically. If not, then make sure you pay them off. Next is any credit cards; you HAVE to pay off the minimum amount, and if possible, pay off more (more on these in a future post). Any other bills, such as rent, electricity, phone etc need to be paid off. The reason I highlighted "Important", is because you should try and get rid of any extra impractical bills; perhaps you have a subscription to a magazine that you hardly read? Or subscribed to a satellite channel but you're hardly ever home to watch it? Whatever it is, just make sure your monthly bills are paid off first and foremost. Lets assume your monthly bills come to a total of BD200, leaving you with 300.


2- Saving a reasonable amount

After paying your bills, you need to try and put aside a reasonable amount for saving. How much this amount is will depend on your salary, your expenses, bills, etc, and differs from person to person. Obviously the more you save, the better. If you really have no idea, I find it good to save somewhere between 25%-50% of whatever you have left (the higher your salary, the more you can save and still live well off). If you still have no idea how much to save, send me a message and i'll try to help out. Considering you have BD300 left from the above example, lets say you decide to save BD100.


3- Using any remaining amounts for your regular spending

Now, according to the above example, you are left with BD200 to spend over the month. If you keep this whole amount with you, its very likely that you will spend a lot more at the beginning of the month (when you know you have a large amount), and less at the middle (when you realize you spent a good part of it). Instead, you need to divide it in a way that makes it easy to even out your spending.

Take the amount, divide it by 5 (ie, 4 weeks in the month and a little extra), and withdraw that amount on the same day each week. Use that amount for the week, and try to budget yourself for those seven days (its much easier to budget a small amount over seven days, than it is to budget a large amount over a month). In our example; BD200 divided by 5 is 40BD. So you end up withdrawing 40 on Sunday, for example. You spend it over the week, and next Sunday, withdraw another 40, and so on. If you spend all of it before Sunday, DO NOT move the withdrawing date earlier to make sure you always have money. Just try to survive without spending on the last day or two, or in extreme situation, withdraw a very small amount (eg, BD10). Its better to be broke one or two days in one of the weeks, than be broke a whole week or two before the end of the month.

At first, you might find that you spend the money faster than in a week. However, don't change the withdrawing date. Just try to keep at it, and after 2 or 3 weeks of doing it, you'll get used to it. Also watch your spending, remember that you have BD40 per week, and try to divide it up evenly over those seven days. When the month is done, you'll also still have a little bit of cash left in your account when your next salary is paid (remember, we divided the amount by 5).

Another good tip is to withdraw on the first day of the work-week, instead of before a weekend. Most people end up going out and spending most of their money on a weekend, so if you withdraw just before a weekend, a good chance is you'll spend most of the cash in those two days, leaving you with not too much to get through the week.

You don't have to stick to this exact spending schedule, but in my experience i've found out it works pretty well, and a few people i've told to use it have found it to be useful as well.

Again, if you think you need help with sorting out your exact budget, send me an email and we can discuss your situation in specific.

Fixing you Money Problems - 5

Part 5: (Where to Save/Bank Accounts)

If you work, there are two ways you can get paid. First is getting your salary deposited into your account, and second is in cash. Every other way of payment falls into one of the two (ie, if you get paid in cheque, you can either get the cheque cashed, or have it deposited into your account). I found it pretty suprising that a lot of people and companies still deal in cash.

If you are one of the people who do not already have a bank account, get one. Bank accounts give you an easy way of tracking your money, how much you have left, how much you spent, and can give you a pretty reliable picture of where you spent and where. Opening an account is very simple; you'll need some identification (ie, CPR and Passport), to be physically present in the bank to sign the documents, and a small amount to deposit to actually open the account (between 20-100 dinars usually).

Banks offer lots of types of accounts, but the main two you need to be aware of are current/checking accounts, and saving accounts. Current accounts give you the facility to write checks, but unless you have a specific need to write checks (for a loan, rent, business, etc), do NOT get one. They do not pay any interest on your balance, and have excessive charges as compared to regular saving accounts (high minimum charge balance, returned check charges, etc).

My advice is open a plain savings account; you get an ATM card, which you can use to withdraw money from any of the ATM's around the country (and in the case of most banks, around the world). They don't need a big amount to open, and you don't need to keep a lot in the account to keep it active (and to avoid getting charged).

So which bank should you open your account with? Well, this is really a personal choice, since most offer very similar services. I'm not advertising here, but I think the bigger banks in the country usually serves best; National Bank of Bahrain, BBK, Ahli United, etc. They're wide-spread and have branches everywhere so they're easier to get to, and they have a lot of ATMs all over the place.

Anyhow; if you do not already have a bank account, open one, and make sure you deposit your entire salary in it every month. This is good for record keeping to know how much you recieved and how much you spent. In the next post i'll talk about organizing your money so you don't end up overspending in the first week or two after you get your salary, and end up with no money at the end of the month.

If you already have an account, great! Time to open another one. You need to divide up your money over two accounts to make it easier to manage. One is for your savings; as soon as you recieve your monthly salary, transfer a certain amount to it (ie, if you recieve 500bd, you can deposit 200 or 100 every month or so; this depends on your expenses, how much you can afford to save, etc). Your other account can be for your regular spending. If you try to save and spend money in the same account, chances are you'll end up spending part of, if not all of, the savings as well.

If you don't like the idea of a second account, you have other options. Some people prefer putting their money into saving certificates; a few banks offer these, such as Ahli United and BBK. Each certificate is a denomination of 50 dinars, so just buy a few extra certificates every month, and keep them in a safe place; you also get the chance to win a bunch of prizes throughout the year. Some people like to get together and start a saving scheme (جمعية), where they all pay the same amount every month, and the total goes to one of them, in rotation (make sure its backed by a legal contract though; someone might decide to be funny and run away with all your money).

There are lots of ways to save your money, just make sure its separated from your main spending account. Just leave this amount to accumulate month by month, and don't touch it, it will grow over time. Next, i'll talk about how to manage your monthly spending (so you don't end up broke one or two weeks into the month)

Fixing you Money Problems - 4

Part 4: (Motivation to Save)

The concept of long-term saving isn't very widespread in our country, and the region in general. Most people spend their entire salary every month on the regular day-to-day expenses, and anything remaining is usually spent on a new phone, TV, or perhaps saved for a few months and then blown on a holiday, or any of the other temptations life throws at us.

A problem is the general value of education and awareness around this issue; in some countries, Singapore for example, people are encouraged to save from a young age, with the benefits of good financial planning highlighted to them even while in school. Here, on the other hand, we lack awareness of the need to save and plan our finances. Add to that a fact about the region we live in; spending is actually encouraged, such as over-stocking of food (just think Ramadhan), buying the most expensive car we can afford to show that we are well off etc, and we start having a problem.

Instead of saving, people in our region are inclined to do the exact opposite; take out loans and credit cards. Need a car? Sure, just take out a loan. Holiday? Loan. Need extra cash for that new 42” LCD television? Ok, so we’ll get a credit card and pay that off.

The problem with loans and credit cards, however, is that they seem very attractive, considering you’re paying such a small amount per month for something that costs a lot more. When you think about the total, which most people don’t, the figures start to get scary; but again, that’s not what people think about. I’ll go into this in more detail in another post.

But back to saving; we just were not taught to save. But let me try and instill some common sense into you; take two situations. Person A doesn’t save, takes a loan and credit card to buy what he wants. Gets his salary full of deductions for bank payments, and ends up spending most of whatever's left before the end of the month. This is a regular monthly routine; a few years down the line, he’s still in debt and still living paycheck to paycheck. Now he wants to get married; he needs money for the wedding etc, but he hasn’t saved any up. He resorts to borrowing money, or getting another loan pushing him deeper into debt. Now he needs to get a place to live; obviously cannot since he has no money to buy a house, so he rents a place, meaning more of his salary is deducted. Sooner or later he has more expenses, children, education, buying a new car, a holiday, meaning he takes out more debt, and gets deeper and deeper into a hole he can’t come out of.

Person B starts working his life by saving money, instead of taking out loans. He collects enough money to put in a time deposit, which earns him interest, so his money is growing. The more it grows, the more he can purchase a small piece of land (which appreciates and he sells for a good profit). By the time he gets married, he has enough to pay for the wedding and honeymoon without taking any more debt, and still has a little left to spare. He keeps saving and as things go along, buys a small property (house, apartment, whatever), and invests some of it for more returns, and lives a pretty financially-stress-free life.

Now tell me, which situation seems more attractive to you? The only thing that it takes to get on the good side of this example, is a little bit of willingness.

Something you have to really be careful from is procrastination; the easiest thing in the world is to say 'I have too many expenses this month, so I’ll start saving next month'. If you fall into that hole, you’ll keep making excuses to yourself time after time, and you’ll never get around to it. Saving isn’t easy if you’re not used to doing it, but you should start as soon as possible (and by as soon as possible, I mean starting with your next salary, not the one after it, or the one after that…)

Next post i’ll talk about where you can save your money, and basic saving accounts/schemes you can have.

Fixing your Money Problems - 3

Part 3: (Tracking your expenses)

No matter what your salary is, you need to know approximately how much money you spend per month, and where you spend it. Ask a lot of people where their salary went at the end of the month, and you would get replies like: "I don't know! I didn't even buy anything this month!" and so on. Obviously, your mind doesn't remember every single thing you spent money on during a whole month, especially the smaller purchases (cup of coffee here, quick snack there, etc), but the small things together can wipe out your salary. Again, "Money adds up"; a small purchase here, a small purchase there, and soon you realize you've spent a lot more than you thought.

Now, if I asked you right now exactly what you spent your money on this month, would you know how to answer with a good degree or reliability?

Most probably not. You could probably try to calculate; this much on gas every day or week, means so and so per month. That much on a meal per day in thirty days is... etc...

Your mind can't easily process your exact spending over a period of thirty days. You probably know what you spent today, or yesterday, and maybe even the day before that, but the longer you go back, the more you start to lose track of your spending. Point in case here; this is what humans created paper and pen for.

Here's an excercise you can do for the month; keep a small notebook with you, or a little daily diary. Write down everything you spend your money on during the month (make sure you note down every single purchase, whether a new laptop, a cup of coffee from Starbucks, or a pack of gum). If you don't want to carry the notebook around with you, just save your purchases in a draft SMS on your cellphone, or keep reciepts from everything you buy, and copy them into your notebook at the end of the day.

You might think its a little excessive writing down every last purchase, but keep doing it. At the end of the month, you'll have an exact list of where every single dinar went. To make sure you did it right, add up all your expenses, and any cash you have left. That should equal your total salary.

Divide all your purchases into categories and add up the amounts; for example, snacks can be one category, clothes can be another, gas, food, and so on. Then you'll get an idea where you're overspending, and where you can try to make a change to your spending habits.

Writing down what you spend isn't something you need to keep doing for ever; just one month is enough to give you a good idea of how you spend your money, and the chance to change some things. You might find out that you spend too much on Starbucks; perhaps its time to start cutting down on those trips to the coffee shop, and start making your own at the office. Maybe you spend a lot on clothes; again, are you buying too many clothes, or are you always buying really expensive clothes? The situation is different for each person, but this allows you to figure out what you need to do.

Most people find out their biggest expense is usually food; spending too much on eating out, so perhaps its time to start eating more at home, or stop going to those top joint restaurants? Either way, figure out what it is you spend so much on, and come up with an alternative plan.

Another use of this list; you can figure out what expenses are for things you NEED, and what are for random things you WANT. Eg. the gas you fill up your car with to drive to work every day is something you need, while that new red pair of shoes to complement your red dress and bag is, in fact, not (I know many women will disagree, but its not! Get over it!)

You don't necessarily need to cut down drastically on everything, and put your spending on an extreme diet; just enough to be able to spare some money to save up. A lot of people, especially in our region, spend more than their budget can afford; I know someone with a 400 dinar salary, who has a car loan for around 160BD, rents an apartment for 120BD, and still wants to go out to classy restaurants every night - well, that just doesn't make sense. He goes out for the first week or so of the month, and spends the next three weeks at home, broke.

Well, hopefully were trying to get out of being in a similar situation; so keep a look out for your spending habits, and see what you need to fix. we'll talk about that a little more in future posts.

Fixing your Money Problems - 2

Part 2: (Money Adds Up)

In part 1, I spoke about how it takes a small flow of money that keeps coming to build up wealth for you. This takes time, so don't expect it to happen overnight, and needs a little bit of persistance. Here I will give you a few tips on how to build a way to actually save; again, i'll be giving lots of random information here, but i'll definately go back over everything and summarize later on.

First thing you need to realize is (this is true for most people), no matter what salary you get, you're probably going to end up spending most of it by the end of the month. If you recieve a 300 dinar salary, and you manage to spend most of it, then suddenly you get an increase to 500 dinars, you won't actually be left with the extra 200 at the end of the month. Most people automatically increase their spending to match their income; visit more expensive restaurants, buy more things, etc, and so, even with a pay rise, you still end up with little or nothing at the end of the month. Its just impulse. What you need to do is be aware of this fact, and use it in your favor.

Most people have one bank account in which their salary is paid. Others get paid in cash. Now, without separating the amount you want to save beforehand, you're probably going to end up spending it, even if you plan/try not to.

Here's a VERY useful tip; open a new separate savings account with whatever bank you deal with. Figure out the amount of money you want to save from your salary, (lets say 100 dinars); as SOON as you get your salary, take out 100 and put it in the new account. Now, you need to totally ignore this new account, forget it even exists. Just use it to deposit money, and don't even think about withdrawing anything from it. You don't even need to check the balance; if it comes with an ATM card, just cut it up and throw it in the bin, or at least don't carry it around with you. You need to make sure you make is as difficult for yourself to withdraw any money from this account. Over time, it will collect value. Use the remaining salary to do whatever you want.

Some people prefer putting their money into saving certificates, such as those by BBK or Ahli Bank. Or perhaps stash some cash under the bed. Same idea. Just make sure you save up the same amount every month as soon as you get your salary, before you spend anything. If you keep it mixed in with your regular spending money, you'll probably spend it, even if you try not to.

With time, your money starts adding up, and you'll realize you've collected quite a bit, which you can either re-invest into something bigger, or spend on something you need (ie, car, deposit for a house, etc).

Of course, all of this is assuming we know how much we need for spending every month, or approximately what amount we want to save. We'll go over this in the next post.

Fixing your Money Problems - 1

I’ve always been pretty good at handling money; besides an education based on business and finance, I guess I was one to figure out how to not over-spend, save a lot, invest in a semi-reasonable way etc. The same situation doesn’t seem to apply to most people in today's world, unfortunately. With the increasing cost of living, massive debt through loans and credit cards among other things, a lot of people have managed to get their financial situation a little out of hand.

I get people every now and then asking me what they can do to manage their monthly spending, save up more money, and in general let go of the living paycheck-to-paycheck syndrome; so here I’ve decided to bestow some of my judiciousness and wisdom upon the common folk with a series of guides towards ensuring a better financial situation, or fixing it if you’ve managed to screw it up already. Most people complain about their salary not being enough; in reality, salary isn’t the biggest factor in being financially stable. Sure, it does play a part, but it’s not the most important one - i’ll highlight this point later. It doesn’t take much more than a little bit of common sense, and a lot of self-discipline; but that isn’t always very obvious, especially in the case of money – a very twisted and perverse entity that is here to either make our lives hell, or full of bliss depending on how we make use of it.

I’m not sure how many guides I will post here; I guess it will depend on the feedback I get and if people find them useful. Anyhow, let me know what you think, I'll try to make them as light as possible; I will be starting off with the most basic information on how to save more money, not spend as much, putting a plan for sorting out any financial messes you’ve managed to get yourself into etc, and then move on to more complicated ways of making your money work for you, investing it, etc.

So, Part 1:

Very basic start here; To understand the concept of being rich, or getting there, you need to understand the theory of how money works. Money adds up; plain and simple. How much income you get every month isn’t always the biggest factor to saving a lot of money; it's how this money is saved month by month, and what total it comes to. All those small amounts of money you save or spend are going to affect the big picture, and one of the illusions of money is that extra dinar or so you spend won’t affect your total saving/spending, actually has a big result on the aggregate.

Think of it this way; I’ve seen people earning 300 dinars save up enough money to buy a new car in cash, while I’ve seen others earning 1,500 not able to put enough money together to go on a short vacation without taking out a loan. That’s very simply because of how they combine together the amounts they receive month by month.

Example; Person A gets a salary of 300 dinars a month; he saves half of it every month, so by the end of the year, he manages to put together 1,800. After 5 years, he’s collected 9,000 dinars, enough to buy a new car, go on a trip, buy some new furniture, all in cash and without taking any loans. Or if he wanted, he could place a down-payment on a house.

Person B gets 1,500 a month; he spends most of it, paying off his loan and credit cards, rent for his luxury apartment, buying new DVD’s, going out to restaurants, coffee shops, etc. He’s left with about 200 dinars every month. A few months later, he’s saved enough to buy a brand new laptop, so he spends whatever he’s saved up. Again, same routine, and whatever he saves up, he ends up spending on a laptop, vacation, etc. Now, 5 years later he needs a car, and has only managed to save a few hundred dinars. To buy a car he needs to take out a new loan, and getting a mortgage for a house is not even an option.

Now, this may be an extreme example, but it illustrates how the whole concept of putting money together works. Maximizing your saving, and minimizing your expenses, especially those small things you don’t really need.

How is this relevant to you, and how can you make use of this concept? I’ll talk about that in part 2.

Bahrain Youth and Jobs

Just listening to the speech yesterday by Bahrain's Minister of Labor made a lot of thoughts rush to my head. He brought up an issue I have been talking about for ages, and that is basically that the Bahraini youth need to get up and step up to job opportunities, rather than sit back, relax, and expect the best jobs and salaries to come their way without doing anything.

Its unfortunate that we have this attitude here in Bahrain. Sure, we have a lot of Bahraini's who put in the effort, who study, who work hard, and push themselves through whatever challenges life faces them with. However, there still many who think that they are God's gift to this country and this world, and expect the best jobs to just land in their laps. I've been saying this for years now; us as Bahraini's expect the government to do everything for us - find a good job which pays very well, provide us with top notch housing, health care, facilities, etc etc etc...

And before anyone starts to argue againt this, please sit back and take a look at this situation! Whether we like it or not, Bahraini people have managed to create a sort of dependancy on the government, and expect everything to be handed to them; its true that some of the other GCC countries help out their citizens a lot more, whether its by guaranteeing them jobs, giving them houses when they get married, bonus payments for no particular reason, etc, but on the other hand, we are not them, and I would have thought most people who have understood this by now, but they haven't.

I've seen demonstrations, riots, etc over people demanding jobs and housing. Now the truth is, there are jobs out there. Its just that these people don't want to work them! Fresh graduates seem to think that coming out of college with a brand new degree will get them a thousand dinar job (approx $2,500/month). You won't get it, get over it! You need to work your way up from the crappy small jobs up to where ever you want to get in life, things won't just happen for you just because you're "Bahraini"

I see a lot of people complain about foreigners brought in to do what are supposed to be "our" jobs. Well, of course! If the foreigner is going to do, twice, three of four times the amount of work you're going to do and have a lot more work experience than you, then why WOULDN'T they be hired in your place?

I graduated from Sharjah, UAE. Straight after graduation, I found a job in Dubai paying 700 dinars a month, plus commissions which used to average another 500 or 600 dinars; in total I was recieving around 1400 monthly, which is an amazing amount.

I worked in Dubai for a few months and decided to move back to Bahrain, to be with family, friends, and back home. Now coming from Dubai and a 1400 dinar salary, I told myself I would be content with around half of that. Think I got it?

I stayed jobless for approx 6 months, and FINALLY I found a job paying around 200 dinars a month. Thats peanuts, and most people in my position decide; "Screw it, i'm not working my butt off for a lousy 200 dinars", but you know what? I took the job. First, it's experience for my CV and sooner or later it will give someone else the motivation to hire me since I have work experience.

3 months later, I got a better job paying around double that. Still not much, but a lot better. Worked very hard at this job and a year later I got my break; another job paying much better, and had very good chances for growth. Of course, if I had just stayed jobless they probably would not have considered me for that post. But I was working, I had some experience and they took me in. I worked hard, moved up along the ranks and within less than two years was a supervisor with what by Bahraini standards is considered a "Really Good" salary.

Would it have worked if I had just stayed home and waited for the right job to fall in my lap? No.

All this while I see other people complain that there are no reasonable jobs, and even when they are offered lower paying jobs, they decline and decide to stay home. Thats not a way to improve; way I see it you have two options - sit home and complain that there are no good jobs, or take any job you find and work your way up.

I chose the second, I really hope the rest of Bahrain do.

I'm not saying Bahrain youth are the only people to blame for the whole unemployment problem we have in Bahrain. Sure, the problem is real and there should be some official departments working on the solution; but this problem isn't one sided. The attitudes need to change, people need to work hard. If we all do this, within time i'm sure we can all get through this problem.



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ARTICLE:

SEIZE YOUR OPPORTUNITY
GULF DAILY NEWS: 29 May, 2007



MANAMA: Bahraini youngsters who think the world owes them a living were blasted by Labour Minister Dr Majeed Al Alawi yesterday.

"You want the government to give you houses, you want the best salaries, you all want to start at the top of the ladder," he said.

"But what you forget is that you also have to make an effort. You cannot start at the top. You have to work your way up."

Many young Bahrainis are "misfits" in the working world, outpaced by foreigners who single-handedly do the work of three or four of them, he told the Young Arab Leaders Summit, at the Ritz-Carlton Bahrain Hotel and Spa.

But Dr Al Alawi said Bahraini youngsters were not solely to blame for what he called "disaster in the making".

"We as a nation have to take a large part of the blame. We have been complacent to let it reach this stage," he said. Dr Al Alawi urged youngsters to seize the opportunities that surround them.