Wednesday, April 17, 2024

Most Popular “Bad Habits” That Lose Money… How To Avoid Them?

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Personal

Study: Credit Cards Don’t Help You Save

A group of bad financial habits that push their owners towards hard times after squandering their own money and it can lead them to accumulate debts, which necessitates the need to change these habits and turn them into positive ones. Financially secure.. So which of these habits are the most popular? ? And how can avoid?

Arab societies are filled with many customs that increase the public expenditure of families, and some do not realize their burdensome financial effects on family budgets in normal times, but in times of economic crises – such as the current period – many of these families feel the need to revise their customs to cope with the challenges posed by these crises.

Random cost

Most of these habits stem from a problem called “the inconsistency of spending and financial management,” as Jordanian economist Hussam Aish talks about in a “Sky News Arabia Economy” exclusive report, suggesting that randomness exists. The Arab family is often characterized by ingenuity in its spending structure, “luxury consumption” that does not meet the basic needs of the family, which often creates a gap between income and expenditure.

While some households suffer from spending deficits that exceed their incomes, the economist notes, meeting the needs and bridging the spending gap many families try to fill that deficit through credit or indirect borrowing. It reflects costs.

The economist listed some of the worst spending habits of the Arab citizen, which can quickly drain his income:

  • Unfavorable expenses: Demand for offers in shopping malls and the urge to buy everything new (even if there is no urgent need) like modern mobile phones.
  • Most of these features cost Arab families huge expenses, leading to inability to pay expenses or debts.
  • Shopping as part of family fun: Buying things can make their prices seem cheaper!
  • Some people buy things that they don’t use for a long time, thus wasting their money, or one may not be able to properly store food items that are bought in excess, causing them to perish and lose the value of the amount paid for them.
  • Social media has also played a role in changing the habits of citizens. For example, many families are led to buy the latest versions of mobile phones to look different from others or to satisfy their inner desires, leading to high spending.
  • Lack of proper planning: For example, a family may use more than one car (be it private or taxi) to go to nearby places (although one car can be used to save money) or frequent one place (like malls or supermarkets). Different requirements are different for one time purchase.
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One of the most important expressions in this context is “In houses, families usually gather in a certain place inside the house, but the lights of all the rooms are used, which is consumption and pressure on the general electricity load of the state, in addition. In addition to the increase in the cost of electricity bills for the family and the lack of interest in maintaining the equipment.” and sanitary and other equipment in the home, which may lead to damage and incur additional costs,” says Ayish.

Appearance fever!

He adds, “Many Arab families are concerned about aspects that lead to a lot of consumer spending without real income, which does not serve the real interest of the family or the individual. Also, the Arab family does not think of income as a ceiling for spending, but as a means of spending without setting a ceiling.” Or in connection with this expenditure, some may spend their entire salary in one instance, leaving them with actual bankruptcy for the rest of the month! .

At the same time, “Many members of the Arab family are engaging in investments they don’t know how to handle, especially because of the lure of quick profits that take away their money and perhaps their savings,” the economist notes. So investing money in wrong place and throwing it in improper ways is one of the bad habits.” The result is loss of savings and entry into other problems.”

According to Ayeesh, personal debt in Jordan is close to 12 billion dinars, and the benefits of this debt are increasing dramatically, reducing a portion of these bad habits that lead to personal debt. What the household spends on its basic needs to pay installments and interest, it rises after raising interest rates.

The purchasing power of income decreases dramatically, while income does not increase significantly with the expansion of needs, which leads to the appearance of a gap between expenditure and income, all of which are decreasing. Return from additional sources of income that the family may seek to improve and increase income.

Any change from the traditional spending environment affects the financial balance of the family and leads to problems related to how to spend it, the economist notes. “What is in the unseen,” do not think of saving, so that everyone suffers from a deficit between his income and his expenditure.

Economists: The card in your wallet could ‘destroy’ your future

Irrational spending.. and daily shopping

Mourad Kouachi, an economist from Algeria, told “Sky News Arabia Economy” that one of the most dangerous habits that cause citizens to lose a large part of their money is:

  • “Irrational or willful spending,” especially during the seasons leading up to Ramadan, is marked by an increase in the amount of waste, and large amounts of leftovers end up in the trash!
  • Misguided shopping at malls and major shopping centers, especially those that encourage discount offers, is another habit that can lead to losing money, and do it on a daily basis to avoid missing out on offers!
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The economist points out that the spending level of the Arab citizen has increased compared to last year and that families are suffering from inflation, but despite this increase in spending, the amount of goods received is lower than last year. High rates of inflation and prices and the majority of Arab families, despite their financial capabilities, wages and pensions increased, but with the increase in inflation, costs increased in light of the current economic pressures.

The Algerian economist advises consumers to have a true consumerism and marketing culture, most developed countries point to the so-called “home economics” in the school curriculum, an organizational plan for managing the family’s economic and financial affairs. People can get the goods they need at the right time at specified prices and quantities. Therefore, the consumption culture of Arab countries must be changed.

Study: Credit Cards Don’t Help You Save

Culture of consumption

In this context, economist Mustafa Badra, in exclusive reports to the “Sky News Arabia Economy” website, points out that the consumption culture of Arab society is different from European society, explaining that the Arab citizen has a habit. – Purchases Although income levels are high in Europe, the citizen rations the purchase of food items in particular.

He continues: Arab families do not have a culture that controls the purchasing process, and most citizens buy luxury goods, such as cars and accessories or mobile phones, while the consumer market in Europe is limited.

Reports on Arab households’ food consumption rates indicate that the amount of consumption and spending in different seasons and occasions doubles in Arab households (“Fitch Solutions” database, which shows average household expenditures. Among 15 Arab countries, the Gulf countries top the list, spending an average of $1,415 per month on food). .

“Visa Card”

Regarding bad financial habits, the economist talks about the impact of electronic cards in various forms, which encourage consumption instead of cash, stressing that this habit is one of the consumer mistakes anyone makes in terms of overconsumption.

Emphasizes the factor of “individual consumption” in bad habits, because sometimes the thing is unusual and there is a process of exploitation by a section of citizens who agree to buy large quantities of food items using these cards. They do not need them (for these things).

It also shows that the level of inflation affects the level of spending because it increases demand and the need to buy (and with the intention of hoarding for fear of higher prices), but things are negative because of scarcity. supply.

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According to the latest edition of the Economic and Social Developments in the Arab Region study by the Economic and Social Commission for Western Asia (ESCWA), inflation in the Arab region reached 14 percent in 2022 and is expected to decline further. Two years to reach 8 and 4.5 percent respectively.

Priorities change

On the other hand, financial market expert Hanan Ramses, in exclusive reports to the “Sky News Arabia Economy” website, says that consumers in the Arab world have different behaviors and preferences than before due to the global crises he was exposed to. For example, pointing to a culture where the storage of goods previously associated with seasons and holidays, now they have become everyday storage due to global crises in countries and rising commodity prices. High inflation rates and a decrease in the purchasing value of money.

He points out that most people have a fear of economic recession or the spread of epidemics and diseases, so there is a tendency to keep money in its physical form so that they can meet their obligations on time, explaining the sense of security. And while stability drives the client back to investing, fear drives him to safe havens.

At the same time, he points out that the Corona crisis has changed the culture of buying and supplying needs, pushing most citizens towards the online market and continuing to deal with discounted online offers in addition to a group’s laziness about direct shopping. , and as a result, many people lose part of their income.

Also remember that the recent economic conditions have changed the citizen and made him spend a reasonable amount to meet his needs and obligations. For occasions.

Ramses also explains that the spending tendencies of citizens differ from one country to another (..). At the same time, it tracks down several tips on how to achieve financial stability and security:

  • Prefer to spend throughout the month.
  • Achieving a balance between a person’s needs and wants.
  • Before spending the money, a surplus can be ensured so that the person saves it for investment and then starts fulfilling his needs.
  • If the salary is weak, it is necessary for the person to look for another source of income according to his needs. If he relies only on the monthly salary, it will not be enough for him to achieve a desired object. Saving is difficult, and surplus is earned by earning enough for daily living.
Nadia Barnett
Nadia Barnett
"Award-winning beer geek. Extreme coffeeaholic. Introvert. Avid travel specialist. Hipster-friendly communicator."

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