Employees urged to spend their early Eid wages wisely

Public sector workers who will be getting their wages early have been urged by financial experts to spend responsibly and budget carefully.

So far government workers in Abu Dhabi, Dubai, Ras Al Khaimah, Umm Al Quwain and Ajman, as well as members of the Armed Forces and federal government employees will receive early payment of their salaries on July 14, in preparation for the end of Ramadan.

The idea is to ensure people have enough money to celebrate Eid Al Fitr, which, this year, is expected to fall on either July 17 or 18.

But financial experts have warned those receiving their monthly wage early not to spend beyond their means.

Chris Ferguson, a director at Credence International, a wealth-management consultancy in Dubai, urged people to budget carefully.

“What a lot of people do is arrange for payment of bills and standing orders a day after they would normally get their salaries paid into their accounts,” he said.

“But what happens is that, if they get their salaries early, they spend too much and then run the risk of not being able to pay their bills.”

Many people are also tempted to travel during Eid, especially if they get extended holidays, which is common for public sector workers in the UAE.

“If you’re getting your salary early and then decide to travel over Eid you’re paying more than you normally would because it is a peak period, so there is a real chance that you will end up overstretching your finances,” Mr Ferguson said.

“It’s also important that people who have already booked their holidays in August make sure they don’t overspend during Eid, otherwise they may not have enough left when they travel later.

“What people have to remember is that they will have six weeks till their next salary payment, so it’s very important that they have enough till the end of the month.”

He advised people getting their salaries early to treat it as a normal month.

“I think people should leave their early salary alone until the start of August,” he said. “If people are sensible for the rest of this month, or if they do spend and they budget properly and spend less later in the month, then they should be fine.”

Although most private companies do not alter salary payment dates, workers in the private sector are also encouraged to try to keep within their means.

“It’s very tempting to splash out during Eid because you want to celebrate the end of Ramadan,” said Iqbal Hussein, 37, from Bangladesh, who works for an IT company in Dubai. “But what I try to do is remind myself that I have other commitments, like bills that need to be paid.

“It’s very easy to spend money in Dubai and there are a lot of sales and discount offers that happen during summer, so you have to be careful.”

For Satish Chouhan, 30, an Indian shop manager, it is fine to spend as long as people budget properly.

“Some people act as if getting an early salary is like a lottery win, but it couldn’t be further from the truth,” he said.

“It’s a false economy because if you’re not careful you’ll be really struggling the last few weeks until your next pay cheque.”

Housewife Asma Khan, 29, from the UK, said she found it difficult not to get swept up in Eid celebrations.

“It’s really tempting to splash out for Eid, especially if you have family here,” she said.

“But what I try to keep telling myself is that the discipline I’ve shown while fasting during Ramadan should also be applied to spending and not buying things we don’t need.”

nhanif@thenational.ae