ABU DHABI // Mustafa Khan went on a spending spree for Eid Al Fitr, eager to lavish his toddler daughter with gifts for the holiday.
He paid for the expenses with the wages he received more than two weeks early last month.
“I got paid early and I went broke early,” said Mr Khan, 27, a Pakistani living in Dubai.
All UAE government employees were paid early before Eid Al Fitr.
But stretching a budget for more than five weeks proved tough for many, who said they cut down on luxuries and had to use credit cards for basic costs this month.
Although some government employees were paid this week to ease the strain, most residents said they were scraping through the last days of September.
“I am broke, broke, broke,” said W?K, a communications manager at a bank in the capital. “I bought new clothes, I moved flats, I bought toys for Eid. I definitely have trouble with budgeting.”
Salaries are commonly paid early at certain times of the year, said Tom Smith, the head of retail banking at United Arab Bank in Sharjah.
“It’s a normal, yearly thing that companies do,” Mr Smith said. “If I recall, our own company paid our salaries a month earlier to reflect the Eid period. That’s just quite normal.”
The same process occurs throughout the West, with wages being paid early before Christmas, he said.
In situations like these people need to be more disciplined, Mr Smith said.
“If I get my December salary before Christmas I still have to pay the mortgage loans, my regular bills,” he said. “It doesn’t mean I can do anything different.”
If you cannot budget efficiently, there are means to control outgoings but these should not become a regular occurrence,” Mr Smith said.
“Most loans, such as personal loans, have elements to them called postponement dates, so what people can also do is postpone a loan for a month to find their feet again,” he said.
“But this is not something you’d encourage to be done on a regular basis. You’re only postponing – you are not getting rid of it.
“If you are a banker offering advice, it is that you need to be financially disciplined. If you defer payment, you are only deferring it. It will get you over an initial shortfall – but it has to be paid.”
People should always plan ahead, ensuring they have enough money in their account each month to cover the basic costs of living, said Neil Grant, the executive director of the independant Dubai financial services company Prosperity Offshore Investment Consultants.
“My advice is always to have at least one month’s ‘must pays’ in the bank,” he said. “If you are saving, it doesn’t matter if you pay your rent monthly [or quarterly] – you’ve got to make sure that you put a certain amount away every month.”
“Must pays” include your rent, your water and electricity bills, and food.
Although this sounds simple in practice, the reality can be tough, said the adviser.
“They [companies] decided to pay them early for Eid,” Mr Grant said. “I’m sure people thought this was fantastic, with little thought that their next salary was not coming for a very long time.”
But at the end of the day, there is little that can be done to change the way someone views money, he said.
“It is purely an attitude thing. I still meet people now who have been here for five or six years that haven’t saved a penny. It’s very easy to spend.”
zalhassani@thenational.ae
jthomas@thenational.ae