Growing up with a father who is a financial advisor, I learned a few things about handling money. My father’s insights help me with personal budgeting, and also with entrepreneurial skills in setting up a website that helps English-speaking olim deal with all the Hebrew forms, mail, and email they receive.
I recently volunteered to give a presentation about financial responsibility to a group of 20 women doing National Service (Sherut Leumi).
Three important messages for young adults
The three main points I wanted to address were:
1. Keeping track of your money helps you save it. Simply writing down everything you buy and entering that information into a computer makes you more aware of your purchases and turns you into a wiser spender.
2. Distinguish between what you want and what you need. Buying your “needs” before your “wants” sounds obvious at first, but once you look at your spending, you’ll notice that frequently you buy “wants” before your “needs.”
3. Using cash instead of credit cards is critical. Once you’ve set your monthly budget, divide it into four, and at the beginning of every week withdraw from the ATM the amount of cash you need for that week. People using plastic are much more likely to overspend.
Shocking responses
One participant said that keeping track of receipts takes the fun out of life. Another denied that people spend less with cash because she thinks she spends less when she uses her credit card. And finally, one participant wouldn’t accept the concept of distinguishing between “wants” and “needs.”
Why the negative attitude?
Some of my peers were so closed-minded and sure that their way of dealing with money was correct, that they weren’t even interested in learning basic techniques to become financially successful. Perhaps their parents never taught them how to take care of money. Or maybe they just don’t value living a financially responsible life.
Hey parents! Now is the time to start taking care of your finances. By doing so you won’t just save yourself money, but you’ll also be teaching your kids about the value of money.
To learn more about teaching your children about finances, read What is the Best Way to Teach Children Investing.
Douglas Goldstein, CFP®, is the Director of Profile Investment Service, Ltd., which specializes in helping people who live in Israel with their US dollar assets and American investment and retirement accounts. He helps olim meet their financial goals through asset allocation, financial planning, and using money managers.
Published December 28, 2015.