85 percent of Saudi families overspend

JEDDAH — Saudi families, including many in the Gulf, have shown a penchant for spending, be it festive season, holidays or even during normal days. This habit has invariably put many in a spot. Thus many have begun urging consumers to spend wisely while also teaching them on how to cultivate a culture of saving. Especially now when the Gulf economies are slowing down due to oil prices, families are rethinking their priorities. It is a good sign ad economists say 85 percent of Saudi families spend more than they save, Al-Madinah reported. The economist Anas Al-Rajhi said 75 percent of Gulf countries’ families do not spare anything from their monthly income. “The culture of saving in many Arab countries is nonexistent. Arabs are used to spending since they are known for their unlimited generosity. However, Arabs need to learn how to save. Saving is not a sign for being frugal. Islam has encouraged spending sparingly and ensuring balance in the individual’s life,” said Al-Rajhi. He also said the media is partially responsible for the lack of saving culture in the Arab world. “Media are a form of distribution of information. Media is used to inform people and to spread awareness about various causes. Media has popularized and normalized extreme consumerism over saving and spending sparingly,” said Al-Rajhi. He added research proves that investment has a direct correlation to saving. “When Arab families learn to invest, they automatically learn selective spending. In turn, the financial provider learns to save up and prioritizes spending. This knowledge starts from a young age. Children are able to learn how to save money. This imprints a permanent mentality to them,” said Al-Rajhi. He added the Western culture is much more familiar with the idea of saving and investing because it is taught from a very young age. “The best time to save in assets is during inflation. There are many ways to invest in various assets such as property ownership, the stock market and gold trading,” said Al-Rajhi. Effat University Business College Finance and Investment’s Amal Al-Tijani said the Arab society must learn the culture of investment and saving. “Children in the West learn how to invest and learn the value of money from a very young age. They learn work ethics and they learn that money does not come easy. All of these skills teach them to make better choices in their future,” said Al-Tijani. She added in Arab societies parents buy their children everything they want without making them understand the concept of spending. “Parents don’t teach their children financial responsibility. There are several initiatives in society teaching financial saving. To have such initiatives is a good sign that the Saudi society is beginning to pay attention to the issue,” said Al-Tijani. Financial advisor Mohammad Al-Shimaimry said accusing the Saudi society for irrational spending is not an accurate accusation. “The salaries of Saudis are automatically divided. Every month, a portion of the salary goes to the General Organization for Social Insurance and a portion of it goes to the pension account. Whatever is left is for the individual to spend. Saudis already have their retirement money secured,” said Al-Shimaimry. He also said schools and universities should teach its students how to spend money sparingly. “The Saudi society is doing well in saving and investment. We cannot base a judgment without accurate statistics. To lessen consumerism, pertinent authorities must facilitate investment procedures for Saudis,” said Al-Shimaimry.