The Consumer Price Index (CPI) for April increased by 0.8 percent, double average forecasts. In the past year, inflation in Israel was 5%. Prominent items in which there was an increase this month were rents. For new tenants, the price increased by an average of 9 per cent and for contract renewers by an average of 3.6 per cent. In addition, extensive and high price increases in a variety of food products have recently come into effect, which will be reflected in the upcoming price index.
As a result, the interest rate increased by 0.25 per cent. In April 2022, the interest rate was 0.1 percent, and in May 2023, it was 4.75 percent. According to Bank of Israel data, borrowers who took out a mortgage in 2021 had to absorb an increase of 20% or more in monthly repayments. In other household loans as well, it is reasonable to assume (subject to the specific conditions) that there have been significant increases in monthly repayments, and this is not yet the end of the road.
These figures reinforce the need to manage a family budget. For those of us who haven't started yet, this is a great time to start. For those who already do, it's time to take a closer look at spending and see if they're being managed optimally. In the residential expenses category, it is necessary to examine the mortgage payments (if any) and make sure - are they paid in order? Are other loans paid in order? Is it possible and worthwhile to refinance the mortgage? Under what conditions?
As for additional loans, if you are in an overdraft whose cost is high, it is worth checking whether it is possible to replace one loan with another. The exam is recommended in relation to all loans. On the subject of insurance, it is worth checking: Do we insure what is important to us? In terms of municipal taxes, electricity, and water, it is worth examining: Is it possible to reduce them by reducing consumption or by realizing benefits for certain populations, of which we may be one?
In the communication sections, it is worth checking: is it possible to get packages that provide identical services at a lower price? In the category of current expenses to examine: Do we purchase only what we need? It is also proposed to examine each type of expenditure for a period of at least three consecutive months and see where it can be reduced. And most importantly: to persist in the process and share it with all members of the household.
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