The interest rate in Israel increased from April 2022 until now from 0.1% to 3.75%, and as a result of this, the prime interest rate increased to 5.25%.
This, as part of a global trend of interest rate increases.
The current interest rate is the highest since October 2008. The rate of price increase in Israel has reached an annual level of more than 5%.
These are not just headlines in the economic sections, but data that have an impact on the conduct of households in Israel.
One effect is in the direction of the increase in credit repayments.
The biggest financial obligation of households is usually the mortgage.
Estimates speak of an additional monthly repayment of NIS 500-700.
For example, the total monthly repayment of a mortgage of one million shekels for 25 years increased from 4,778 shekels in April 2022 to 5,469 shekels in December.
Those living in rentals also experienced price increases, and the average increase is estimated at about 12%.
Expenditures for the purchase of food and consumer goods for the home will also increase by more than 9% in 2022.
These data clearly reinforce the need to manage a family budget.
For those of us who haven't started this yet, this is a great time to start.
For those who have already been doing this for a while - re-examine the expenses side and see if it is being conducted optimally.
In the housing expenses category - examine the mortgage payments (if any) and see: are they paid in order?
Are other loans paid in installments?
Is it possible and is it worth refinancing the mortgage?
Under what conditions?
As for additional loans, it is worth examining, if you are in a high-cost overdraft, it may be possible to replace it with another loan.
Regarding insurance - check: do we insure what is important to us?
Are there double insurances or such for needs that are not relevant to us?
In the sections of property tax, electricity and water - check if it is possible to reduce them, both by reducing consumption and by implementing benefits for certain populations that we may be among.
In the category of current expenses - shopping for food for the home should be examined: do we purchase what we need?
Do you go to the supermarket with a list?
Do you compare prices?
And most importantly - persevere in the process.
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