A Secure and Stable Financial Future for the Family

The changes in the family structure after a loss also bring significant financial changes. Sometimes this means transitioning from a two-parent family to a single-parent family or a change in the family's income structure. In this new and complex situation, which requires the entire family to go through a period of adjustment alongside recovery, it is especially important to plan the financial future accurately and appropriately.

We understand that thinking about financial planning can feel complex and perhaps even premature when dealing with loss. This is completely understandable, and that’s why we want to emphasize: there is no need to act on all the information immediately - the goal is to provide you with tools that will be available when the time is right. Everyone progresses at their own pace. However, early planning can provide you and your family with greater peace of mind and control over the new situation in the years to come. In this article, we will try to help you understand how to build long-term financial security in small and practical steps.

The most important principle in saving is simple - start now, even with small amounts, because of what is called "compound interest" - meaning, your money not only grows and generates returns, but the returns themselves start generating additional returns.

How does it work? When you save money, it generates a return (for example, 5% per year). In the following year, the return is calculated not only on the original amount saved but also on the profit from the previous year. This way, the money "works" harder and harder over time.

Here is an example to illustrate this principle:

Let’s say you decide to allocate 200 ₪ per month for savings, and the money generates an average return of 5% per year.

Bottom line: A 10-year delay can "cost you" 110,000 shekels! In other words, every month that passes is very significant, and even if you can only save a small amount right now (even 100–200 ₪ per month), it’s better to start now than to wait.

Every bereaved family is entitled to receive various payments from the state. It is advisable to allocate a portion of this money to building a future financial security for the family.

Before doing so, it is important to remember that the goal is to decide on an amount of money that can be set aside each month to build a future financial foundation without compromising the current standard of living.

The important part is to first create a clear picture of the new family budget. More information and help in defining a budget and financial goals in this article

Note: Money that is not set aside at the beginning of the month simply gets "absorbed" into regular expenses. Therefore, it is advisable to allocate the savings amount as a fixed expense at the beginning of each month. For example, if you plan to save 400 ₪ per month but tell yourself, "I’ll see if I have anything left at the end of the month," chances are you won’t have anything left to save. In practice, you might buy a few extra items in the supermarket, eat an unplanned meal out, buy a shirt on sale you can't resist, and so on. If the 400 ₪ are allocated to savings from the start, these additional expenses will not be possible.

Not all savings are the same. There is a big difference between a place where money grows slowly and a place where it grows quickly - and this difference becomes significant over the years. It is important to choose a place that provides a return higher than the rate of inflation; otherwise, the money essentially loses its value over time.

How to ensure this?

Before starting to plan new savings, it is worth checking what already exists. You may already have savings that simply need direction and adjustment to work better, or you might be able to save money on management fees and invest it elsewhere.

Similarly, it is also worth checking other savings you have, such as study funds and private savings.

In your new situation, there are two main options to focus on:

In conclusion, we want to emphasize again that when it comes to pensions and savings, it’s not just about money - it’s also a matter of independence and control over the future. When there is a clear financial plan, decisions can be made out of freedom rather than obligation.

The tools and information we have presented here are a starting point. The goal is to give you, the bereaved families, enough confidence to take the first step - whether it’s reviewing what you already have or starting a new savings plan.

Every bereaved family is entitled to receive support and information on financial matters - this is part of the guidance to which you are entitled. For additional help and financial advice, you can contact the welfare worker who accompanies you, and review the financial eligibilities available to you on the website, as they can help you achieve your goals.

The article was written based on a lecture delivered by SMART Pilat, as part of the "Alumot Or" project.