Saudi Arabia: Is There a Financial Awareness?



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.


3 Responses

  1. There is a joke among the young Saudi men in my community that when the scholarship money arrives in their bank account, they are rich. Two days later, they are poor again.

    Of all the homestay students I’ve hosted so far, only one knows how to save money. Perhaps it is a coincidence that he has never paid me late…in fact, usually pays me a couple of days early?

    As teachers, we are frustrated when students show up on the first day of class without books. No money, they shrug and try to make their eyes look pitiful behind their luxury name-brand sunglasses as they furtively send yet another text on the latest iPhone. I get notices from collection agencies in my mailbox all the time, addressed to former homestay students, who never paid their phone bill.

    Of course, not all are like that, but a discouraging number are. I really hope that the Saudi government teaches them financial responsibility before sending any more out here because more often than not, they are wasting their scholarship money on alcohol, drugs, and girls and causing a very bad name for themselves among local merchants and anyone who works in an apartment leasing office. They need to be taught better, for their own good as well as for the image of their country.

  2. Wow, sad about financial illiteracy ..or just financial laziness. But then, here in North America we have problems of enough people going into too much personal debt because they use their debit, credit cards too often.

    It does help to get young adults start good saving habits or just paying bills on time earlier in life.

    Maybe the Saudi TV station should start up a weekly show on how to get out of debt, etc. like such shows here in North America.

    I do find it puzzling that many Saudi parents would even tolerate that type of financial irresponsiblity on a wide scale. Unless they themselves, don’t have good financial management skills/awareness.

  3. I think the reason many parents “tolerate the financial irresponsibility” is due to there not being any type of a financial cultural awareness in place. I believe your idea of a tv show on financial awareness and debt avoidance is a great idea.

    There remain a large number of Saudis who do not have credit cards. When some of these same Saudis come to the US, it adds another layer of confusion since all the various stores and banks push for customers to obtain credit cards.

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