Reality-check for UAE residents: From flipping credit cards to a wealthy mind-set

Theda Muller

The Past: Realistically, during our last ‘Wave of Plenty’ we forgot ourselves. We spent indiscriminately and bought things with money we hadn’t earned yet. We mastered the art of flashing plastic and it felt good. It made us look important… and we started developing a disregard for money. Finally, the plateau we created in this mind-set changed our levels of respect, until we fell.

Naturally there are other reasons that are not self-inflicted like losing your job without notice and all other factors associated to such a situation.

However, to balance your life you should always have a ‘reserve’ for such times, at least 3-6 months income that can serve you whilst you try to secure alternative employment.

Realistically very few people take the time to plan and ensure such a reserve is in place while they are on the wave of plenty spree.

Reality Check is that we already started flipping credit card payments and now we have so many of them that it has become impossible to use one payment to service the others. Sounds familiar? But how long did it take you to see the ‘red flags’? I can tell you it can go on for months or even one year and we are only jolted to reality when we are faced with collections departments, legal action… or when collectors arrive at our place of employment, and the first cold reality is the embarrassment we must face in front of our colleagues.

Still we make excuses and blame the bank who ‘doesn’t know what they are doing!’

If you assume that creditors are walking around oblivious to credit policies, then let me ask you to step out of your fallacy world right now, because you need help and fast.

Key example of indiscriminant spending habits is: If I asked you how much money you spent during any specific period? Probably you could not give me an accurate response because during that time it was irrelevant and you were unorganized to maintain strict records. ‘Why worry when there is still much to go around?’

Currently, you have no choice but to watch each penny, make a point of securing each receipt, odd slips or official payment documents, because your budget has diminished substantially.

Back then, you never had a budget, you never tracked your spending, because you never thought you would find yourself in this place today.
Nobody does, not even I and I have had first-hand experience of reviewing my habits after losing and unable to come up with any explanation. Here I am talking about a serious sum of money I could not pinpoint.

During the ‘good times’ we shoved slips into here and there not checking our transactions, purchases or any power we may have afforded to our family or spouses on our accounts.

Tracking money when it is in abundance is rare and one only finds this form of organisation within the wealthy circles where often we hear people say ‘Oh he is a miser because he doesn’t spend his money and enjoy his life’.

Others will proceed to say ‘That’s why he has money’ and that is the real truth. So when we continuously convince ourselves that ‘money makes money’ then we are in denial.

However, we also know that the wealthy know how to respect money - that is why they have an abundance of it for lifetimes and generations - because they work to build legacies. They are more organised than us; if they lose they can gain tomorrow, because most of them can track their mistakes. They have mastered the art of making money and can therefore easily walk away from money. They can openly talk about it; we cannot, because we have issues with this subject.

Realistically nobody likes to talk about money or debt so we need to take a rain-check on our limiting beliefs because this is what holds us back in life.

The Secret is Long-Term Wealth Accumulation. Most of us only ‘live for the now’, we don’t really care about tomorrow, legacies, or how we will service our needs for the next years?

Here lies the difference in a wealthy mind-set.

It is not a miraculous phenomenon that we are in awe, when we know or hear someone who has lost all his fortune, pick himself up and be right back at that same place within a few months. I would like to associate with the term ‘discipline’ because most of us are not disciplined enough to track the financial aspects in our lives.

Systems make it easy to acquire credit, even if we don’t qualify for approval. Somehow, we learn how to slip through and that ease of gaining becomes habitual.

But anything in abundance can be wrong in someone’s life if it is not controlled.

The flip side is that we don’t read the fine print and/or knew the real regulations when we apply for credit, because if we did, it would be a ‘wake-up’ call.

Don’t just believe the bank representative while he shoves the credit application in front of you requesting your signature and a guarantee cheque because ‘it’s bank policy’ to request these documents.

Directly ask him the reasons and consequences of signing and issuing such documents and read the fine print, because it is of utmost importance that you know and don’t get caught unawares. You will gain invaluable knowledge and experience if ever you end up facing similar problems in the future.

It is also known facts that during difficult economic time’s people find it really hard to come to grips with a financial crisis. Some are not self-inflicted, perhaps their direct income has been affected by expenditure monitoring of their employee companies, mobile phone allowances are no longer a part of the package, nor are incentive bonuses, annual bonuses, commissions… and higher than normal targets are stipulated making it unrealistic.

More business for less pay! As an employer, when you disturb someone’s earning potential that directly affects their income without prior notice, then employees are devastated, because they can no longer make ends meet.

This factor impacts on living standards, basic necessities of life, school fees and all the costs we must meet monthly to sustain ourselves.
Yes I am a firm believer that there are always two sides to any story. But I also believe we should maintain our slate in such a way that is beneficial to our lives and that of our families, or the people who care and love us as they are a priority.

But take heed – and more than anything – get your sums right.

[Note: Theda Muller is a UAE-based author of two books: Embrace Financial Freedom Volume One: 10 Proven Ways To Release Debt And motional Fears In Today’s Economy, and Volume Two: Releasing Fear And Bouncing Back From A Debt Crisis. She also conducts webinars and live workshops on debt recovery]

 

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