Your financial situation may be unique but …
Before I launch into my article I just want to say mazal tov and welcome to all of this summer’s new olim. You did it – you did the hardest part, and I hope that you have an easy and successful klita (absorption – end of ulpan class lesson1!). You will find many things different here in Israel, one of them being the financial aspect of your new life. Hopefully, as you read on, both new and veteran olim will find the advice below helpful.
Everyone’s financial situation is unique to them. However, having said that, it never ceases to amaze me how people experiencing completely different financial realities share the same questions and worries. The following are two different areas that seem to be of major concern to many people I have encountered. These frequently asked questions are amended excerpts from my book, A Financial Guide to Aliyah and Life in Israel. I hope you find them helpful.
I Managed My Finances Abroad — Why Not in Israel?
When you were running your finances in your home country, you were working in an environment and financial system that you were familiar with and a language that you understood fully. Many financial do-it-yourselfers find that they cannot continue as successfully in Israel, both because of the language barrier and because having to learn a completely new financial system can be very challenging.
Add to this the time constraints that many people in Israel feel on a day-to-day basis and the extra stresses involved with settling into a new country — and it’s not a simple situation. Many people find it necessary to work with professionals, often just to help them set up financial systems. Once you have these systems in place, you may find you can go back to doing it alone. Others find it easier to work long term with professionals and are comfortable with this type of outsourcing.
One of the most important ways to navigate the Israeli financial system is to find someone who can lead you through the system. Most often it’s someone a little ahead of you on the aliyah path, or a veteran who will help walk you through the system, explaining the pitfalls and the best path to follow. In some cases, you might find someone within the system who is willing to help and/or someone who speaks your language whom you can use as a future resource. So if someone from the absorption ministry or Bituach Leumi is helpful to you in solving a specific issue, don’t hesitate to try and get their direct number and keep up the connection.
I Want to Set Up a Financial Plan, But My Spouse Doesn’t. What Do I Do?
Managing your financial resources as a family is not a simple task. Financial issues have been known to cause more stress and disagreements than any other issue. When managing your resources, it’s critical that you focus on coordination. You don’t need to agree upon everything or to plan everything together. However, large financial decisions need to be synchronized, or there is likely to be on-going tension and bad feelings.
Here are a few recommended steps to get you working together:
- Observe your spouse’s financial personality. Some people are natural spenders, and others are savers. Understanding each other’s financial bias will make it easier to work together.
- Couples should keep a list of assets and liabilities, account numbers, bank names, insurance policies, and other critical financial information in a central, easily accessible location (often with a third party as well). People lose track of assets for many different reasons (aliyah being one of them), and they risk losing their hard-earned money due to simple negligence. In the event of a tragedy, your spouse (and children or close relatives and friends) needs to have this information easily available, so creating a list will avoid unnecessary complications.
- Jointly review your financial records yearly. Even if one spouse does all the bookkeeping and financial management, the other spouse still needs to at least know the basics about the family’s finances and needs to take joint responsibility for the family finances. An open information policy will go a long way to avoiding misunderstandings.
- Set a time to speak about money (and not just when you’re going to sleep). It’s a critical topic that needs full attention. Make time to do the small things like tracking your expenditures so that you’ll have the information you need to make decisions going forward. This type of discipline is crucial for long-term success.
- Remember that you don’t need to agree about everything that you spend: having an agreed-upon budget framework will avoid the constant tension that surrounds resource allocation. Set joint goals that you both agree on and give everyone in the family the ability to play his or her part in reaching those goals. A budget framework can help improve communication, as it provides a basis for discussion and helps you work together and identify common goals.
Financial management not only impacts you today, but also affects your children and their future. Children learn from our financial habits. Teaching them about money through setting a positive personal example can make a major difference in helping them to become financially literate, especially in a new country. And hopefully you will raise and educate your children to be unique individuals who know the answers to at least these frequently asked questions.