Israeli high school graduates complete high school with no formal financial education. They don’t learn money management skills and often make amateur mistakes given this is their first experience in becoming financially independent. It’s critical that they learn and use the right tools to manage their money, to achieve financial independence.
I recommend implementing Pa’amonims’ 5 steps to financial independence:
- Set your Financial Goals
Reflect on your financial wish list. Whether it be an after army trip overseas, a car or higher education. Explore the potential costs involved and determine the monthly amount you should set aside in order to achieve your plans.
- Financial “Selfie”
Document expenses and income, right to the last Shekel, allowing you to get a clear and accurate picture of your financial situation. The information is available from your bank account and credit card statements.
- Make a budget
The budget is a framework comprised from one’s income and expenses. You will need to prioritize by defining what is more, and what is less important, and thus budget accordingly.
When shopping, always explore discounted options and be cautious when buying online.
- Keep track of your expenses
Be sure to track your expenses, whether using excel, a tracking app, or simply maintaining a list on your phone. Regularly review your bank account and credit card statements, ensuring you are aware how much and what you spent your money on, and check for unknown charges.
Make sure the bank account accounts for your entitled benefits and that you aren’t paying additional fees. Terms like “rising interest rates” may seem scary, however it’s important to be familiar with banking basics, to help you better understand the monetary world.
- Save money
Set aside at least 10% of your monthly income an invest in a savings account. This will help you establish regular habits to realize future goals and help you accumulate enough money to help you with emergencies, with ad-hoc overheads (like a broken phone etc.), or keep you going when unable to earn whilst studying.
Don’t wait for anyone else to do it for you. Ask for advice, keep learning and take action!!!
Remember you are the one responsible for giving yourself the life you want.
This is a great opportunity to achieve your goals and start your financial life by forming regular habits, and by building a solid foundation for a sustainable financial future.
Pa’amonim conducts programs for financial education spanning between 4th to 12th grade, that focus on teaching relevant tools, skills and resources for kids, teachers and parents. We also offer online courses for young adults to help them achieve financial freedom.