You know how every new year we do a reckoning, promising ourselves to be better children to our parents, more involved parents, spend less time on our phones, keep in touch with our friends more, work out and the like? It is also very advisable to make resolutions regarding our money. True, it is less fun to deal with our futures. Studies show that when people are asked to imagine themselves as older people, the active part of their brains acts in a similar way as when meeting strangers. It is nice to think of ourselves today, at the most about our dream holiday in the summer, but to put money aside for an unknown future? Not so much. We have a list of important decisions about your money; if you manage to tick at least one item off the list, it’s a step in the right direction.
#1 This year we will get rid of the overdraft. We know that 50% of Israelis are in the same boat as us, but that’s not really any comfort. We can continue to ignore the situation and say that that’s life, but somebody is making a pretty penny off it. A chronic overdraft of 10,000 shekels will cost us around 1,200 shekels at year in interest, for no good reason. This year we are moving into the black.
#2 This year we will start saving. You occasionally read about financial news, where they talk about pensions and say that we will not have enough; it is hard for us to think so far ahead but there is some fantasy about early retirement (maybe even at age 50?), travel the world, cruises to the Caribbean, help the kids buy a house, this year we are totally on it. Open an Excel spreadsheet, make cuts where possible and take care of the future.
#3 This year we will organize are insurance. Lots of phone calls from work, insurance against loss of work capacity, personal injury insurance, we also have private health insurance, could we have bought the same one through work? And there was a time we were told that we have to buy long-term care insurance before it is cancelled, of course we took it, not to mention mortgage insurance and another life insurance our insurance agent said is recommended, there are ads on the TV for car insurance by the mile. Boom, at the end of the month we’ve spent 2,000 shekels on insurance alone. Does that make sense? This year, we will make sense of them all.
#4 This year we will reduce the pension handling fees. We said we will start saving this year, but what about the costs of managing our money? We don’t really have any idea how much we pay on handling fees; the truth is we are not really sure if we are saving in a pension fund or management insurance, but chances are we are paying way too much and with a little effort we can reduce those costs. This year we will take care of it, for sure.
#5 This year we will study the capital market. We have already decided we will start saving but bank commissions are really embarrassing. It’s time we let our money work for us, even if it means taking more risks. We have to study the capital market. Be exposed to technological companies that are becoming unicorns, we also really believe in green energy, but how do we do it, where do we start? Friends recommended an investment fund but maybe it would be better to trade independently? This year we will get the know-how.
#6 This year we will upgrade our income. We make a really good living, our boss is nice, the hours are reasonable, we have excellent terms, but we work really hard and it is time we received a raise, we haven’t had one for three years. It is time to stop feeling ‘uncomfortable’, we are quite sure our new colleagues have higher contracts, even though nobody talks about it in the hallways. The worst that can happen is that we will be refused, maybe it’s time for a change.
Come on then, let’s go. It is entirely possible.