On Saturday, Oman government announced its state Budget for the year 2016. The total revenue of the country was down by 4 cent estimated at OMR8.6 billion. The council of ministers approved a number of measures to face the impact of lower oil prices in order to ensure the sustainability of the financial situation of the state.
One of the major step which government has taken is that a reduction in government spending and the development of non-oil revenues by raising tax rates on profits of corporations, reviewing and raising fees on some government services, adjusting prices of petroleum products and other austerity measures. The ministry will also raise income tax rates on companies and institutions and reduce the number of tax exemptions.
So how this budget is going to affect both the nationals and expats. Even though economists are anticipating gloomy pictures ahead, here are certain steps they should take to cut the living cost and to handle their personal finances in a better manner.
Saving and money remittance
Saving is the biggest asset of your income. Try to save and maintain an account equal to at least three months of your income. Otherwise try having a small amount automatically deducted from your salary into a savings account. This will really help to manage your unforeseen situations. The first place to start with increasing your saving is by reducing your variable expenses. These are you wants, as opposed to your needs, and cutting them can free up significant room in your budget. Remittance during the financial crisis time would not be a great idea as the inflation will definitely hit inflow and outflow of the money. Try to keep liquid amount as your saving instead sending to your hometown.
Dealing with debt
If you have unpaid debts like personal loans or credit card payments, then it is time to deal with them head-on. Contact your creditors and make acceptable repayment arrangements. This will not pile up and hence will help you to manage your monthly budget. Implementing a plan to remove these stresses from your life will be good for your financial health. As the Banks are going to stringent their policy looking at the financial situations, it’s best time to deal with it before it gets bigger.
Control your shopping
A change in basic spending pattern will definitely help to handle your budget no matter how confusing things get on a national level. Changing your spending habits should be the first step towards surviving this financial crisis. Focus on your daily basic needs and consumption pattern and spend on that. Try to avoid over indulge of products which are not necessary for your living. Fix a budget for your monthly spending and make a list before you go for your shopping. Always shop with a list and take cash so that you can’t overspend. Stock things at home for the entire month. Choose not to buy non-essential items like dry fruits, sweets and cakes. Try to keep your daily meals simple. This will help to cut down on your daily unnecessary expenses.
Fuel consumption
With the new budget and a cut in fuel subsidy rate, the oil price is going to impact the daily commuters. Try to use public transports as a mode of commuting. Oman has better public transport system and people should utilize it. Reduce your daily outgoing plans either to shopping mall or for any other outings. This will reduce your fuel consumption. Find out if your co-workers are staying nearby and go for carpooling. If you have more than one car at your home, then try to use one at a time to avoid the unnecessary fuel consumption. Opt for work from home options if available which will save your money and time.
House rent
Oman has witnessed fluctuating house rents with a move in real estate market. If you are staying in a bigger apartment or villa, then try to move to a smaller place as per your requirement. On an average if you are paying RO 500 per month as your rent, then move to a place which is close to RO 300-RO 350 per month. Give it a chance and negotiate with your owner for a better bargain. This will help to cut down on your monthly house rent cost. Try to rent a place with less maintenance and utility cost. Get a house on rent which is closer to market area which will also save your transport cost.