How can you take control of your financial balance and save even a little? (Photo: ShutterStock)
In an "overdraft country" like Israel, where a significant portion of the population is constantly overdrawn, it is a bit difficult to realize the saying "put aside a white shekel for a black day." Many times this shekel simply does not exist in the bank account. The challenging Israeli existence, which brings many of us to a situation where we consistently have less than we would like – or even need – puts us in what is called "tunnel vision": looking only forward and not sideways.
Many studies conducted around the world have shown that people who are in a mental state of struggle and survival are not free to look at the bigger picture and tend to make less good decisions. The existential struggle draws energy and overshadows judgment. Alex Shillman, a psychologist and behavioral economics expert, explains that the survival situation in which many live is not our fault, but rather a result of the modern market and its mechanisms. "Don't feel guilty, there's an industry that gets you there by using different biases," he says. So how can you take control of your financial balance and save, even a little, when there is no money available? Shillman gives a few tips:
Turn your savings into an automatic
action Even if you don't have excess funds, you'll probably be able to scrape a few dozen dollars every month. Even such a monthly savings amount can add up over time to a significant amount. But even more than that: it creates saving habits, puts you on the savings track and opens the door to more significant savings in the future, when possible. So set up a small monthly standing order and start saving.
Set an amount you want to reach and milestones on the path to it (Photo: ShutterStock)
Set savings
milestones, define the amount you want to reach, and milestones on the path to it. If, for example, you aim to save $10,000, set this as the target amount and the accumulation of every $1,000 as a milestone in which you reward yourself with something small, such as ice cream or a glass of wine to mark your achievement. It's a way to stay motivated and build anticipation that provides a boost of self-satisfaction while on task.
A survey conducted by Max in 2022 showed that 48% of Israelis prefer to save through a digital channel and deposit money easily, using a credit card. With Max Savings, you can save ideally in the short term, easily and conveniently, with a simple digital interface in the MAX app or website. This way you can set aside money for any purpose you choose: vacation, home renovation, cosmetic treatment, car replacement, etc. It is possible to execute a standing order or transfer amounts on a one-time basis.
Set defined
savings goals and define what you're saving for, rather than saving for a vague purpose. Car? New PC? Write down the destination and even put a picture of it in front of you, in a prominent place. A clear and defined goal to strive for will help save.
Make expenses artificially
fixed
Look back a year, calculate all the expenses you had then, add them up and divide them by 12. This will give you an average monthly total expenses. Look at this number as constant, even if it isn't. Set it as your current spending threshold and try to plan your monthly expenses accordingly. This will make financial planning easier for you.
Avoid impulsive
shopping, set yourself a rule such as: "If I want to purchase a product that costs more than NIS 400, I will not do so immediately when the desire or need arises, but only the next day." Many times the next day you will find that you are less eager to make the purchase. Maybe the cost-benefit looks different and maybe you've found an alternative solution to the need the product is supposed to fill. "A lot of times we shop in a way that depends on the mood," Shillman says. "Shopping releases dopamine in the brain, so when we're exhausted and drained, we supplement it with shopping. This exercise helps avoid it."
Stick to wise consumerism On wise
consumerism, a whole book can be written. Since we only have a short section, we will put the emphasis on shopping in the supermarket - a significant ongoing expense that everyone has and that can be changed a lot. "You can do a lot of small things to make shopping at the supermarket cheaper," says Shillman. "Each of them is not dramatic on its own, but together it adds up to a significant difference. For starters: Go to the supermarket when you're not hungry (hunger is known to encourage "big eyes" when shopping) and with a shopping list ready from home. That way, you won't be tempted to buy things you didn't plan to buy, or at least you'll do it less. Pay attention to the low shelves: they often house the cheaper products, with the supermarket preferring that you see the top shelves with the expensive products. And of course: compare prices between different retail chains."
Make a challenging game out of reducing expenses If you have children, you can invent, for example, a game in which all family members pitch in to lower the cost of the electricity bill by making sure to turn off the lights, turning on the boiler only for the time needed,
and so on. Agree with the children that half of the amount saved on the next electricity bill will be returned to them as a gift. This will also reduce expenses and educate children to reduce expenses that will benefit them and you in the future. "A defined goal really helps," Shillman says. "When we strive to do something, we tend to go for the big and the dramatic and forget that many times even different small steps can produce the big one together."
The tendency to wait for the right time to save ("Soon I'll have enough money to put some aside") causes the process to be postponed again and again, when it is unclear whether the long-awaited timing will ever come. Therefore we would say that it is recommended to go into the water, but there is no need to jump. These tips will allow you to carefully insert your foot and move forward from there. Alo ShinStick to these recommended steps and you'll find it easier and easier to save when you start with small but safe steps.
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"Money on the side" - savings do not accrue interest and do not yield a return. Savings policy - from IDA through Max Insurance Agency Ltd. The savings are invested in the capital market and the return is not guaranteed. Past returns do not indicate returns that will be made in the future. The aforesaid does not constitute investment advice/marketing and/or pension advice/marketing and/or adaptation of the product to the customer | Regarding the Max card - failure to repay the loan / credit may result in delinquent interest and execution proceedings | Subject to opt-in terms and MAX approval.
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