The coming year will feel more expensive for all of us with prices and interest rates constantly on the rise. We’re all having to become aware of how we spend, and how we can save. To avoid falling into debt we will all have to tighten our belts, spend less and re-prioritize our expenditure.
Here are some ideas on how to prepare for the new financial year:
Save – Regularly save 5%-10% of your net income (or as much possible) to guarantee financial freedom, for now and for future needs. This will help us realize our dreams, and easily deal with ad hoc expenses. It will enable us to fund imminent expenses, such as family occasions, higher education for our children, family Simcha’s or for a rainy day.
No Loans – Do you have an overdraft? Approximately 50% of Israeli’s enter the red at least once a year, and a third are chronically in this position. We’re all susceptible to alluring ads tempting us to take easy loans, deceiving us to mortgage our futures. Loans are taken to cover debt, purchase cars, travel etc.
Think twice before taking another loan!
Review financial statements– Half of us don’t bother opening the critical data, and aren’t familiar with our financial state of affairs. Ask your banker, search online or ask a friend to explain the meaning of pension reports, bank statements, or any financial reports, even the most complex. Understanding these reports can often save thousands of Shekels.
Keep learning – Keep asking until you fully get it. Financial terminology for many, can seem Chinese, yet it is our duty and responsibility to learn the financial jargon in order to make the right decisions.
Talk about money – Plan ahead and make joint financial decisions. Prioritize needs, set individual and mutual financial goals with your spouse. Discuss money matters with your children. The beginning of the new year is a great opportunity to kick in regular pocket money habits.
Remember – the path to financial independence is contingent to cutting back on expenses, and increasing income. One is linked to the other. Some can easily cut back whilst others may find this more challenging. Some aspire to maintain their current standard of living, and find ways to increase income. Those who can, are welcome to support Pa’amonim, a Non Profit that helps thousands of households each year achieve financial independence.