Saturday, 22 September 2018

How can I save money in Israel?

20 tips to beat the shrinking wallet syndrome. 

Hebrew: איך לחסוך כסף - סודות החיסכון

piles of cashIt's common for olim to face financial challenges. Perhaps it took longer than expected to find a job or you settled for a lower wage.  An unexpected expense may have forced you to dip into your savings. Whatever the reason, in order to get out of debt and start saving you will have to make some lifestyle changes. Cutting expenses is a daily challenge. Interest rates on saving schemes and foreign currency deposits, in Israel, are low, speculating in stocks is risky and  Bitcoin is sure to drop.  Bad spending habits combined with not having the Hebrew language skills to ask the right questions could forced you into a financial stale-mate.

A bridging loan is not a solution - it's just the banks way of making money. Loans, overdrafts and monthly installments (Heb: tashloomim) encourage unnecessary spending. Don't despair! There are ways to save money in Israel and cut down on expenses. A simple example like buying milk in a plastic bag rather than in a carton will save you a few shekels a week. You might think this is insignificant and not worth the effort, but when you multiply those few shekels by 52 (weeks in the year) you'll find that you have already saved a few hundred shekels.

You'd never take cash and throw it directly into the garbage bin, so why would you throw away money by paying extra for an item.

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Here are some money management tips that are easy to implement and really do work.

Shopping

Tip #1

To save 500 shekels a year, buy the regular un-sliced, subsidized bread (לחם אחיד)which is about 1.5 shekels cheaper than the sliced loaf

Tip #2

To save 1,000 shekels a year, buy milk in plastic bags. You can pay up to 8.5 shekels per liter for milk in a carton, whereas the plastic bag is nearly half the price and is set at 4.65 per liter (1%).

Tip #3

To save 1,000 shekels a month - that's a whopping 12,000 shekels/year a year - start shopping at the shuk (the fruit and vegetable market).

From 2:00pm on Friday afternoons the price of fruit and vegetable at the shuk drop drastically. You can buy enough fruit and veg for a family of four, for an entire week for about 150 shekels. Those same items bought during the week can cost up to 50 per-cent more. At your local supermarket or convenience store the price difference will be even higher.

For example: 4.50/kg for apples on Friday afternoon in the Haifa shuk compared to 7 shekels/kg midweek or at the supermarket for 9.90/kg

Bread, fish, grains, legumes and spices are also cheaper at the shuk.  Twenty five shekels/kilo for fresh Buri compared to 40 shekels/kilo in the supermarket.

Tip #4

Do not do grocery shopping on an empty stomach. Studies show that hungry shoppers are likely to spend around 20 per-cent more.

Tip #5

Try to leave the kids at home when you go to the grocery store. An impulse purchase like ice-cream, soda or a take-away meal can easily add 50 - 200 shekels to your expenses for the day.

Tip #6

Shop with a list and stick to it. On-line grocery shopping helps to eliminate impulse purchases.  Prices are often quoted per 100gr and here you can easily determine what is cheapest.

Tip #7

If you are serious about saving money, it's mostly cheaper to buy the house-brand.

Tip #8

Avoid going to the supermarket every few days. Plan your menus ahead of time and do one big grocery shop every month. Take advantage of the delivery services large supermarkets offer. For around 30 shekels (and even less if you spend over a certain amount) you can have your groceries delivered right to your front door.

Tip #9

Take advantage of special offers and coupons wherever possible but make sure that the "buy 2, get 1 free" offer is, in-fact, a special offer. Be sure to use the item within a month or two.  If not, you'll save more by buying an individual item. Download your favorite supermarket's app where they offer additional discounts.

Tip #10

Shop in hyper or outlet stores wherever possible. Your local neighborhood supermarket or convenience store can be 25 - 50% more expensive.

Tip #11

Shop in stores that cater specifically to the religious community. These stores are generally cheaper. (Remember to dress modestly and appropriately for this shopping experience)

In the home

Tip #12

Use the half-flush setting on your toilet whenever possible and then watch the saving on your water bill

Tip #13

When you finally buy your own apartment, install a solar boiler for all your summer hot water needs.  There is enough sunshine in Israel to power your boiler and supply hot water for about 8 months in the year. This can cut your monthly electricity bill down by half.

Tip #14

Negotiate your bills with service providers. You can reduce your cable/telephone/internet package if you complain about the rate and threaten to leave. Knowing Hebrew is a must to get this saving. Ask a friend for help!

Free services like Skype, Face Time, Whatssup, or discounted phone packages that include special rates for overseas calls to both landlines and mobiles are a huge saving. For around 50 shekels/month you can get a mobile phone package with unlimited local calls and free calls to selected countries abroad (a must have for all olim). Some of these phone packages include a 2nd, 3rd or even 4th line at a discounted rate. Get your entire family onto the same package and you can save about 100 shekels per month.

Tip #15

Anti-virus software that might have been added on by your internet carrier can cost close to 400 shekels per year. Downloadable, anti-virus software subscription costs for 5-10 devices costs in the region of 200 shekels per year (and some are even free). That's already a 50% saving.  If you are not computer savvy, leave this one alone - it will cost you more to call a computer technician to fix a glitch.

Tip #16

Replacing appliances?  Sadly there are many olim who leave Israel after a short time and are selling their stuff.  You can find amazing deals on almost-new appliances and furniture via second-hand groups on Facebook.

Entertainment

Tip #17

Get rid of all unnecessary subscriptions. Do you really need that annual subscription to a magazine from abroad at $10 - $15 an issue? Read news online for free and if you are still want a printed newspaper, free ones are handed out on street corners.

Gym, kick-boxing or the country club your signed up for and never use. These "chugim' could be costing you 200 or 300 NIS a month. Cancel and ask for a refund. Limit you kids to the number of chugim and after school activities they can participate in.

Transport

Tip #18

To save 500 shekels a year, use the self service lane at the petrol station. The current full-service price of fuel is around 6.50 NIS/L.  A liter of fuel in the self-service lane is approximately 30 agorot cheaper. If you are filling up twice a month using the self-service lane offers can make a significant difference to your annual fuel bill.

Tip #19

If you use public transport more than once a day, make sure you have a monthly pass for the RavKav smart card ticketing system. You will save a minimum of 50 shekels a month and even more on combined tickets.

Tip #20

Get rid of all those extra credit cards. It's hard to keep track of purchases and even if you don't use them you are still paying a monthly card fee (around 15 shekels/month/card). Have one card only and all your expenses will glare you in the face on your monthly statement. You'll be surprised at how many impulse purchases you made and their cumulative cost.

There is no way around it, if you want to cut down your expenses, you have to be disciplined and change your spending habits.

According to an article published in Ynet in June 2017 Israel's mortgage debts, as well as other loans, have crossed the threshold of half a trillion shekels, reaching NIS 504 billion ($142.7 billion)—an increase of 23% over the past three years, with the average debt per household in Israel (about 2.5 million households) at about NIS 200,000 ($56,600).

Take control of your finances.  Get rid of your overdraft. Start implementing these tips now!

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