Budget Management in the New Reality

So, where to begin? There are a few simple steps that can help you:

1. Understand the current situation:
   To plan for the future, you need to know what you have today. It is recommended to obtain a detailed report of the last two months of all your credit cards and bank accounts, and review every line to ensure you are familiar with each expense. Additionally, it’s worth preparing a list of all loans, including mortgages, with details of interest rates and repayment schedules. Good to know: On the "Har HaKesef" website, you can check if and where you have savings and funds - provident funds, forgotten deposits, or old savings.

2. Identify unnecessary expenses:
   Try to look for expenses that can be canceled immediately: Subscriptions to unused services, duplicate payments, or expenses that are no longer relevant. Many families manage to save hundreds of shekels through such a review. 

3. Know your new rights:
   You can contact your welfare worker to check what your entitlements are. It is important not to miss benefits, allowances, tax relief, and reimbursements.

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  Detailing the budget structure: Divided into three parts:

  1. Current expenses (short-term): Bills, shopping, daily expenses.
  2. Planned expenses (medium-term): Holidays, events, annual insurances.
  3. Investments and savings (long-term): Emergency fund, goal-oriented savings, investments.
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  Working with an Excel spreadsheet:
  The simplest and cheapest method is to manage an Excel spreadsheet that includes a detailed breakdown of expenses, categorized into fixed versus variable, and essential versus discretionary, with precise amounts (no rounding).

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  Emergency fund:
  It’s important to always set aside funds for emergencies in your checking account, in short-to-medium-term deposits (6 months to 2 years), and in long-term investments (over 3 years).

1. Purchasing in installments: Payments for daily purchases like food, clothing, and consumer goods create the illusion of spending less, but in reality, it becomes harder to track the budget and future commitments accumulate. The only exception is annual insurance - a large expense that recurs every year.

2. Giving in to every request from the children: This can be challenging, especially after a loss when there’s a desire to compensate them or a fear of saying no due to their sensitive state - but maintaining consistency with financial boundaries teaches children essential tools for the future.

3. Impulse purchases: Emotional purchases are often made to improve one’s mood, but they can harm the budget. So what should you do? Wait 24 hours before making any unplanned purchase and ask yourself: "Do I really need this right now?"

4. Overextending yourself: This refers to buying things beyond your means, such as an overly expensive new car, a luxury vacation that requires a loan, and more. Sometimes this stems from a desire to restore a sense of normalcy, but in reality, it creates financial stress. It’s better to plan big goals gradually and save for them.

5. Taking a loan to cover overdraft: This solution is like putting a band-aid on a deep wound. In a short time, the overdraft returns, but now there’s also a loan to repay. Instead, it’s better to stop, map out expenses, understand where the money is going, and take control of the budget.

6. Neglecting small expenses: For example - buying a cup of coffee every day outside the house. It may seem trivial, but if you look at the monthly expense, you’ll find it can add up to several hundred shekels. 

7. Lack of forward planning: This refers to known upcoming events or expenses, such as a Bar-mitzvah celebration, the start of the school year, holidays, annual insurances, and more. You can prepare for these expenses in advance and set money aside for them.