As more and more Saudis become urbanized, they will be spending more in order to meet the demands of their new lifestyle. From new home loans to car payments, credit card installment payments for furniture and other goods and personal loans taken out to pay for weddings or vacations, there are indications that Saudis and particularly the young have increasingly turned to borrowing to pay for their needs. This has led to an increase in the debt to income ratio among families who find themselves quickly overextended and with not much recourse except to keep borrowing to stave off the inevitable. It is this path that eventually leads to a heavy toll on the family and to financial bankruptcy which can lead to a stiff jail sentence. Perhaps the biggest factor that leads to financial ruin is that many Saudis have been ill-prepared in the areas of budgeting and spending. Managing their finances is not something they are good at, resulting in a whirlwind of financial transactions with very little thought given to the consequences. Some rely on the safety net of family support to bail them out while others believe that somehow the income from their jobs will get them through. Others simply ignore demands from creditors to pay back what they owe and avoid contact with them whenever they can. With prices rising on most consumer goods and services, managing money has become harder than ever and a lack of budgeting coupled with uncontrolled spending can quickly lead to the path of rising debts and financial disaster. Credit cards have made it easier for many who are ill-prepared to handle credit responsibly to rack up huge debts from which there is little escape as interest charges compound the amount owed and just paying the minimum can ensure a lifetime commitment to debt at the hands of the issuing banks. Ali Shah, an activist for humanity and operating an NGO out of Riyadh says: "In a nutshell we live in an era of deception. Criminals persecuting innocent people. I wish we could jointly work on this. Locking up debt defaulters and people who are broke in jails has become common and ineffective. And the reasons for defaulting are never investigated or countered properly. "I have a friend in a Saudi jail. He was charged with owing SR 1.3 million yet he is innocent and there is evidence to prove it, but he has been in jail for over two years now. These pointless inmates are costing the government billions of riyals. SR 4,000 to SR 5,000 per prisoner per month. Why? I checked up on his case with the police. There were in fact two others locked up under similar charges and who have no cases against them. But they were fortunate to be released under a government pardon. "Those who have been legitimately locked up due to debt are not in a position to pay it off in jail cells. Why not free them and ban them from travel while they work and pay off their debts. Imagine how much money the government would save, which could be used for programs to educate people of the evils of debt." Ali Shah makes a lot of sense. A person locked up is in no position to pay back what he owes. Banning him from travel while he fulfills his credit obligations is a good start. And for the government, the money saved could be used as he suggests on programs to educate the youthful masses. Meanwhile, one should try to stick to the old saying as much as possible: If you don't have the money for it, then you probably don't need it. The author can be reached at [email protected]. Follow him on Twitter @talmaeena
