It’s a sad fact that many couples earn a lot of money but still have difficulty finishing the month. Most of my clients for budget counseling are average, middle-income families who make a decent living, or even better, by any objective standard. But so many have trouble managing their money and cannot seem to  stay out of debt. They find themselves perpetually in overdraft, caught in the swirl of ever-increasing debt which they can only see to solve by taking another loan and another loan and another loan, until only a black hole seems to lie ahead.

Harsh as it may sound, for folks in this category of wage earners, living beyond one’s means is a choice — not always a totally conscious and aware choice, but still, a choice. Sometimes, the choice involves chronic purchases of non-essential items, the reasons for which can be complex and numerous and have been shown in studies to be often tied to psychological factors.   Other times, one major budgetary decision can have the effect of hamstringing one’s financial stability for a long time. The classic example is the temptation to take out a mortgage just a little beyond the ability of our monthly income to cover.  Sometimes the larger mortgage is taken for a slightly larger home or apartment with that extra bedroom, and the few hundred extra shekels a month, we justify to ourselves, will not be such a burden. But those few hundred shekels are not paid only one time. They are to be paid every month for two decades or more, including linkage.  We also tend to forget that the larger mortgage for the larger house will drag along with it larger costs which we may have failed to anticipate. There is more arnona to pay, larger heating, electric and water bills, and certainly more maintenance costs.

Making the right budgetary choices is therefore a skill we must learn, so as no to cause ourselves to fall into unforeseen traps. It involves knowing ourselves well, understanding our consumer motivations, and calculating thoroughly and honestly our short, medium and long term commitments.