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How can we deal with price hikes?

These past few weeks have been a roller-coaster for anyone shopping for groceries. Prices have been climbing steeply, and from what we hear, this may just be the beginning. As several of the larger brands have now agreed to postpone the increase on pricing by a few months, we as consumers, must prepare.

I work for Paamonim, an Israeli volunteer-based NGO, and since its inception in 2002, we’ve been impacting society by providing financial education and guidance. We believe that personal responsibility, accompanied with financial knowledge, is what drives a person to make smarter decisions and more cautious economic management. Everyone should live by their means. This must be done by double-checking expenses, and making sure they don’t exceed your income. The clearer the picture, the easier it becomes to make the right decisions for you and your family. As you gain more tools in financial literacy, you’ll be capable of self-sufficiently defining what is more, and what is less significant for you, and how it’s reflected in your personal or family budget. We consider the ABC technique the best way to make decisions: Appraise, Budget and Communicate.

Appraise: Collect your bills, bank and credit card statements or ensure you have access to all online data. Register your Expenses, Income, Assets and Debts creating a clear picture: listing all spending events and costs. This is the first step and may take some time. Set a specific time to do this as it will take you a few hours to get it all written down on paper (or Excel), but very worthwhile. This process will tell you how you have handled money up till now. Don’t be remorseful or harsh on yourself. Be patient with yourself (and your spouse), even if the picture isn’t an easy one to look at, take it as a learning opportunity.

Budget: Set a sum of money for each kind of expense. Set goals. Think about what you want to achieve, financially, and how you plan to get there. Are you earning enough? Spending too much? Decide what is more/less important to you and spend accordingly. The budget will set boundaries but will leave you freedom to manage your money according to your wishes and lifestyle.

Communicate: How do you make financial decisions? Do you discuss money with your partner? With the children? With friends? We know that the more the subject is on the table, the more awareness there is, the less the social and peer pressure likely to lead to the – “everyone has it, so I’ll buy it”.

With greater personal financial responsibility, we can live our best lives. In preparation for price hikes, and the change in standard of living, Paamonim offers a different way to managing finances. Start practicing the ABC method and keep an eye out for more financial responsibility tips on our social media pages.

About the Author
Sharon Levin has an M.A. in Public Policy and is a certified Group Facilitator. She has worked for Paamonim since 2009, lead roles include Regional Director responsible for Paamonim's volunteers who provide free one-on-one financial counseling. As Director of Group Activities, she headed the establishment of Paamonim College for Financial Education, offering courses, programs, and lectures teaching financial fundamentals to participants, all geared towards helping people acquire financial education for better living.
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