Monthly Archives: January 2025

Track your money, budget your money

frugal strategies

I’ve been a bit lax in recent months with my budget, so I’ve spent some time in the last couple of days sitting down to remedy that.

What it’s been like for the last six months is that I look at our bank account several times a week to keep an eye on what’s going in and out. This is called tracking and something you must do to be a good steward of your money!

Last month I noticed that our mortgage payment went up 630 shekels – and our mortgage is fixed so it shouldn’t have gone up at all. I looked into it and for some reason the bank started charging us for home insurance – despite having a different insurance provider since 2023. When our insurance agent checked this for us, it showed that our paperwork was all in order and the necessary notifications had been made to the bank long ago, so we’ll get our money back. But if I didn’t track our expenses, the bank could have continued to automatically deduct this amount every month for years.

This week I noticed that a transfer I made to a different bank didn’t show up. It turns out that there were two account numbers and I sent it to the wrong one – I corrected that and the money is now in the right place.

A couple of weeks ago I saw that money that was supposed to be reimbursed to us by the health clinic hadn’t come in by the latest date they told me to expect. I went back into their office, and within two days the outstanding 850 shekels was in our account.

Several months ago, the horseback riding stable we had one meeting with charged us for three lessons for two children (ie six total lessons), and one lesson for another – hundreds of shekels for lessons that never took place. I got that refunded as well, and moved the kids to a different ranch for lessons.

A couple of months into the academic year, I noticed one of the tuitions wasn’t being deducted. My husband called the yeshiva and let them know they hadn’t activated the automatic withdrawal we had set up. If we hadn’t realized that, at some point they would have realized we weren’t paying and we would have accrued a high outstanding balance.

My husband once ordered an Adobe product. Months later, we were still being charged a monthly fee of 45 shekels for something he had forgotten about and never used – he cancelled it and we’re no longer being charged that fee.

We have another ongoing monthly expense, a charitable donation for a cause that my husband committed to for a year – I don’t know how long we’ve been donating for but it’s been a lot longer than that. I was glad to contribute initially but now I’d like to shift our giving to a different cause.

This isn’t an exhaustive list of things that I found, but some examples of what you find when you track your money that popped into my mind. There are many things you’ll notice when you begin tracking, and what you learn can save you a lot of money.

Ideally tracking includes noting the total spent each month in each area of spending. Even when I haven’t been religious in adding up totals for each category, I know what’s going on in our account, and make sure to give 10% to charity and regularly put money in savings. In October we reached the financial goal I set last year, which was to pay off the higher interest loan of our two mortgages. (When we refinanced the portion that was adjustable to a fixed rate, the two portions of the mortgage were separated into two loans rather than one). It was an ambitious goal and it took a lot of consistency to see it through, and tracking was critical to our success.

Now I’m thinking about what I want to set as the next financial goal – I’m thinking a lot about retirement. Though I haven’t yet set a clear objective, it will only benefit our finances for me to tighten up my money management and be actively budgeting, in addition to tracking.

Let me share with you what the difference is between the two. Tracking is noting all of your expenses after the money is spent, and knowing how much you spend in each area.

Tracking is a critical preliminary step to getting your finances in order. If you’re not tracking, it’s likely you don’t have an accurate ideal of where your money is going and your money is leaking out.

Once you’ve tracked your spending, budgeting is the next step. Budgeting is looking forward, and determining how much you’ll spend in each area for the coming month. When our finances didn’t have much wiggle room, I had to carefully budget. There’s no way we would have avoided going into debt and felt like we had an expansive life without being very on top of the details.

Budgeting is when you ask yourself, although I’ve spent a certain amount in a category in the past, is this really the amount I need to spend? Can I trim my expenses in that area and funnel the difference into savings? If so, what amount do I choose to allot for each area that will allow me to meet my financial goals?

Tracking shows that I spend a certain amount of money each month on food. Budgeting is when I decide to spend the amount I want to spend, and to do whatever I need to do to keep my spending limited to that amount.

I’m feeling positive about my new budget. Budgeting feels very different than tracking; it’s proactive, intentional and powerful. It’s when you commit to yourself, “I’m going to set my goal and I’m going to reach it!” A good budget is a wonderful financial tool. It will challenge you but personally, I’m looking forward to the challenge!

Avivah

Prices are going up but we’re still living in good times

frugal strategies, personal development

I’ve been thinking a lot about money and frugality lately, particularly with the price increases that went into effect.

The following costs increased in Israel as of January 1, 2025:

  • property tax: 5.29% increase
  • electricity rates: 3.8%
  • water bills: 3.4%
  • Value Added Tax (VAT): 1% increase (this is added to every purchase in Israel, other than produce)
  • National Insurance contributions: rates will increase from 0.4% of income to 1.2%, a 0.8% increase

Tax credits will be frozen, we’ve been told public transportation costs will go up, food will continue to go up – everything is expected to get more expensive. That’s not such a pleasant thought, particularly as we’ve experienced inflation and rising prices in the last few years.

I’ve read a number of articles about the price increases and the message of every single one is that they are going to negatively impact our society. It doesn’t resonate with me to tell people how much worse off they’re going to be, because I don’t like narratives that turn you into victims. It never benefits you.

You have choices in every situation that can improve your situation in some way. Sometimes life is hard, even very hard, but there are still better or worse ways to think about and deal with your situation.

My approach to these increases is to ask myself, and a question I encourage others to ask if they’re concerned about prices going up, how can I make the coming year as good or better than the one that just ended? Is it possible? I think so and that’s my goal for the year to come. For that to happen I’ll need to be more intentional about goal setting, budgeting and spending.

When people complain that things just keep getting worse and never get better, I wonder if they’ve lost sight of the bigger picture, as we live in a time of unprecedented abundance.

You have clean running water and indoor plumbing; chamber pots and outhouses aren’t the norm. You can take a hot shower inside your own home. You dress in clothes washed in a washing machine, you don’t boil huge pots of water to do the laundry or scrub it down at the river’s edge. You turn on your stove and oven with a flick of a dial – my great grandmother had a wood stove and cried with happiness when she got a gas stove. The physical effort you need to expend on a daily basis to provide for your needs is miniscule compared to the past.

You have stores filled with a variety of food products unimaginable to past generations and can find just about everything, regardless of seasonality. You have large quantities of inexpensive foods in every store in your country. You don’t have to stand on food lines waiting for hours for your one allotted loaf of bread, only to find out that there’s none left and then you need to stand on the next line for your allotment of potatoes for the week. You can buy whatever quantity that you want. Thirty percent

Clothing and household goods have never been less expensive and more easily acquired. You often don’t even have to leave your home – click on the computer to order and it arrives at your door a day or a week later. I have a clothing order that’s supposed to come today that I ordered from overseas less than three weeks ago; in the past my orders came within a week and I feel as if something’s not right for it to have taken so long to get here! When we get used to luxuries, we take them for granted.

Thrift and second hand stores are filled with items that are in excellent condition, often unused. My daughter volunteered at a clothing gemach and told me the quality and quantity of donations is so high that they don’t keep anything missing a button, needing any kind of repair or not in perfect condition or out of date. That reflects a level of material abundance that didn’t exist thirty years ago.

So being grateful will make you a happier person. Being more content and positive about life is worthy of the effort on its own. But when it comes to money, it’s not putting more money in your pocket, is it?

Maybe it can. When you feel grateful for what you have, you feel less entitled and more willing to consider different options. When you focus on all that you have, you need less. When you recognized you need less, you buy less. When you buy less, you have more money to put into savings. And that happens without feeling deprived and unhappy.

Avivah