One of my personal observations during the years I spent in Saudi Arabia was a general lack of financial awareness and particularly among young adult Saudis.
I believe this general trend is due more to the cultural traditions than anything else. Saudis are brought up under the premise that their parents and other family members will take care of them. This is especially true among women. As a result, the young Saudi may pay less attention to what things will cost as they have not had to do so. However, this pattern can result in difficulties when young Saudis marry and find themselves having to face a budget for the first time.
If a Saudi couple pays rent, it generally has to paid one year in advance. Otherwise, the typical monthly expenditures a Saudi couple must account for is electricity, water, groceries, gas canisters if there is a gas stove, mobile phone bill and gasoline and/or transport. In many other cases a couple also pays a housemaid or driver a monthly stipend as well for services.
In general, monthly utility bills are much less in Saudi Arabia than in the Western world. Groceries used to be much cheaper too but in recent years the cost of groceries have increased to near Western prices. Mobile phone plans are either pre or post paid. Satellite tv is simply the one time charge to acquire and install a satellite dish. Therefore, without factoring in a monthly rent or mortgage payment it may seem like there is good positive cash flow each month.
I had many Saudi couples, male and female, tell me they did not worry about saving money and viewed it as unnecessary. They had the inherent faith that there needs would always be met. I remember one young Saudi male with two children tell me that if he no longer had money in his pocket then it meant they had to stay home and wait until the next pay day came along. He didn’t worry about checking to see how much was left in his wallet each day.
This system seems to work while a Saudi is in the Kingdom but if leaving the Kingdom for University or business abroad in the West, the Western financial culture can be a severe culture shock. Utilities run higher, rents are higher and due each month, satellite service requires a monthly fee, gas costs significantly more and mobile phone plans can be both expensive and confusing! Health care is critical and so is adequate car insurance.
SEDCO Holdings, as part of its corporate responsibility program, partnered with Operation HOPE, a leading global social empowerment non-profit organization specializing in financial literacy education, in designing a program of financial awareness for young Saudis.
As part of the program all participants took a survey about spending habits and financial awareness. Not surprisingly, the survey indicated that even today few young Saudis track their spending. Thankfully though, programs like the one initiated between SEDCO Holdings and Operation HOPE have given great benefit to those Saudis who participated.
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