Going into the new year with sacrifices
One expatriate is struggling to repay his loan in the aftermath of the recession
Every new year brings a renewed hope that things can be better. People come up with new resolutions and purposes to depart from the wrongs of the old year and start the new one with a strong determination to make life more prosperous. Unfortunately, some resolutions require a huge sacrifice.
Like most people, Abdul Aziz, 30, who works in the aviation industry, has resolved to start saving money next year. But with desperate times calling for desperate measures, the expatriate from Kenya has decided to send his child and pregnant wife back home.
"It's a difficult decision. But that's a sacrifice I'll have to make. Times are hard for us in the UAE. I can no longer afford to raise my family here," Aziz confides.
Aside from having to meet the daily demands of a family life, the young father is facing a bank complaint over mounting credit, and is struggling to pay back a loan he had used earlier to purchase land in his home country. He had appealed to the bank to grant him a reprieve or freeze the interest charges so he could concentrate on paying back the outstanding balance, but to no avail.
"I have no investment, except for the piece of land I bought in Kenya. But I bought that through a loan which I'm still currently paying," he says.
Aziz noticed the state of his finances worsening when the recession hit early this year. His part-time business, which involves selling car spare parts from Dubai to Kenya, is facing a slump, as most buyers in his home country now purchase the supplies directly from Japan or China. His full-time job is not giving him extra income either. The usual annual bonus, salary increase and even overtime pay have been scrapped, so Aziz has only his and his wife's basic salary to live on.
Big chunk
"My wife is working also, but that's not enough. When we combine our income, 40 per cent of that amount goes to the rent alone," he points out. A big chunk of the couple's income also goes to baby-sitting services which can cost about Dh1,500 to Dh2,000 a month. "The cost of food is also another factor. Food is getting more expensive that your Dh800 is not even enough for one week," he says.
The couple is already cutting corners such as trimming down mall visits and out-of-home entertainment to make their income stretch further, but things really haven't got any better. Given the current situation, the outlook for the coming year looks gloomy to Aziz.
"That leaves me without a choice but to send my family back home. It's cheaper that way. I will just rent a room and share it with my friends. I think my last option would be to sell my lot to pay up my credit," he says.
We step into 2010 amid some slender signs of economic recovery after a difficult year. For those who have resolved to get their finances back into shape in the new year, it's down to basics: trimming spending and boosting savings. Some difficult and painful decisions will have to be made to rebuild savings and strengthen investments. To help, Money presents advice from fund managers on asset allocation, tips about how to save and some thoughts on long term financial planning.
Are you planning to take your child to attend this programme? How important is art to a child’s development?
