Last year a resident of the North of Israel was interviewed about living under the constant threat and fear of rocket attacks. The journalist asked what his day-to-day routine was like, and the resident explained that they are living in ‘shigrat herum’ – their routine is a state of emergency. That oxymoron sums up the reality of life for millions of Israelis. These past few years changed our reality. It should also have changed how we think about money. In this not-so-new era of volatility, it’s not enough to be financially cautious. We need to be financially resilient, nimble, durable and smart.
When Déjà Vu is the New Normal
Here are some financial tips to help you manage your finances in the current emergency routines.
1. Reassess Your Budget
Take a new look at your budget – or create one if you don’t yet have one in place. Reassess what constitutes the essentials and what doesn’t make the cut. Ideally, you should consider a new reality where you can save 20% of your salary towards your emergency fund and long-term flexibility. Ignore all the assumptions that you may have made. Take a step back and look at your life and its priorities from this vantage point of insecurity and the unknown. Go back to the basics and work up from there, tracking your expenses carefully to avoid surprises. Unlike most of what we are living through, our spending is one of the few things we can control. Taking proactive steps helps us feel grounded during a time of extreme uncertainty.
2. Diversify Your Income Streams
I have written several times about the value of creating multiple income streams to build wealth. Today the idea carries even greater weight. In Israel, some sectors, such as tourism, are suffering yet another catastrophe as the skies are partially shut, with only repatriation flights currently operating. If you are in that, or a related profession, you may well need to think of alternative sources of income. If you haven’t yet been affected, don’t wait until the next crisis forces your hand. Assess your abilities and be open to diversifying your income streams via unconnected professions if that matches your skill sets.
3. Emergency Funds: A Necessity, Not a Luxury
Once upon a time I considered an emergency fund a wise and necessary backup for a rainy day, that hopefully would remain unused by most people. But in our current reality it is often increasingly essential for our survival now. Although across Israel, thank God, the current war against Iran has a lower casualty and destruction rate than the previous war in June, many people are facing major property losses only partially covered by the state. Freelancers and many small businesses have significant work disruptions, while others face milium or chalat (unpaid leave) issues. Emergency savings of 3 to 6 months of income are essential for you and your family to survive and thrive when faced with adversity, without the added stress about how to get through the month.
4. Review Your Investment Portfolio
Despite the turbulent war years since October 2023, the Israeli stock market has rallied incredibly, with the shekel also gaining strongly against other currencies. Focusing on historical returns being promoted by insurance agents for foreign indexes like the S&P 500 is not always wise when you are living on shekels. Consider whether you have enough shekel exposure in your retirement and overall portfolio, especially given the risk of continued dollar devaluations as the US struggles with a bloated deficit and national debt. If you aren’t able to do your due diligence, consult a professional.
God is in the Details
The expression ‘God is in the details’ is the earlier version of the more familiar expression “the devil is in the details”. I prefer the original saying which has no negative undertones but implies that something might appear simple at first glance, but the finer details reveal the complexities of an issue. I find this especially relevant to our financial lives, as we often stay on a superficial level of detail in examining our financial plans, spending, investing and in general how we run our lives financially.
Why the Details Matter
While not advocating incredibly complicated planning tools for the average person, going into the details is often necessary to help you make proper long-term, wise decisions about how to manage your financial situation. Creating a budget cannot be accomplished by approximating your expenses. You need to understand where your money is going, in order to be able to control and prioritize. Similarly with investing. Understanding returns and risk parameters, projections and volatility is necessary to create a consistent investing plan.
Simplicity and the Bigger Picture
But that doesn’t mean that you need to create complicated plans with constant updates. Sometimes a simple straightforward plan is the best way forward. But to create even a simple plan, going deep into the details is often necessary.
God is in the details and in the big picture as well. Those of us privileged to live in Israel have witnessed awe-inspiring miracles, events that defy all the odds, despite the loss and suffering that surrounds us. It is impossible not to feel the presence of God’s hand guiding us through. As we celebrated Purim and read Megillat Esther, the many parallels between our current reality and the miracles of the ancient story were evident. I don’t believe in coincidences, so thank God for the countless miracles He has done, and pray that He continues to shower more upon us.
At Labinsky Financial, we help clients navigate uncertainty with clarity, perspective, and a steady long-term approach. In times of volatility and disruption, our role is to help individuals and families strengthen their financial foundations through thoughtful planning, disciplined saving, and well-structured investing. We work closely with our clients to create strategies that are both practical and durable, so they can make wise decisions, protect their flexibility, and move forward with greater confidence even when the future feels uncertain.
Preparing for Freedom with Strength and Faith
However, as we continue to pray for the protection of our soldiers and the security of our nation, we must also take practical steps to strengthen ourselves and our families. Financial resilience is not separate from spiritual strength – it’s one more way we bring stability and hope into an uncertain world. As we enter the month of Nissan, and prepare for Pesach, the holiday of freedom, we pray that we are worthy of G-d’s continued protection and help in freeing us from the threat of our many enemies.
Wishing you and all your loved ones, a chag kasher v’sameach.