You don’t have to wear a mask to dress up. We all dress up financially, and not just on Purim. Some of us present a better situation than the real situation, and some of us present a grimmer picture than reality.
In preparation for Purim, Paamonim present the parade of popular economic costumes.
The costume: I have a new car!
“When I entered the car dealership, I was made a great offer! A new car costs “only” 1,500 NIS per month! Great deal, I’ll drive a new car, I’ll get a three-year warranty and I won’t have to pay for repairs either. After three years, I will sell the car, cover the financing and buy a new car again in the same way.”
Hiding behind the disguise: I have a big new debt
Anyone who thinks he bought a new car for NIS 1,500 a month is mistaken. The only thing he really bought was a loan, a debt on which he would pay extremely high interest. At the end of three years, the vehicle will lose its value and the loan for its purchase will accrue high interest, so that in fact this is a double loss and a loss of tens of thousands of shekels within three years.
The costume: our fridge is always full of goodies
“Anyone who opens our refrigerator will always see that we have everything. Everyone has exactly what they like to eat at any point in time. When you want to cook or bake something, there is never a shortage of staples at home.
The children love to eat fresh food every day and we throw away large quantities of cooked food, vegetables and dairy products every week. We pay a lot of money for shopping, sometimes deploying in installments. On the credit card you can see payments and more payments for past purchases at the supermarket.”
Hiding behind the disguise: we buy more than necessary, and pay in installments.
Buying food products in installments means taking out a loan for every purchase at the supermarket. The food products we purchased this week will be consumed this week and therefore must be paid for from the money we have this month and not from the money of the coming months. Next month we’ll also shop at the supermarket and have to pay for them.
The costume: flying abroad every year like everyone else
“We heard about all the exotic destinations that the neighbors go to every vacation, the children said that everyone in the class flies abroad. We received a really attractive phone offer to take a vacation loan and pay back whenever we could, we decided to live in the moment and took the loan.”
Hiding behind the disguise: they “pushed” us a vacation loan
Available loans for any purpose are thrown at us from all sides: from the bank, credit card companies and insurance and financing companies. The loans are given easily and in an instant, the interest on the loan is extremely high, especially those of “pay back only the interest and repay the loan when you can”. The extended loan allows for one thing for sure, remembering the vacation many years ahead, each month while seeing the monthly repayment come off your bank account.
The costume: the generous in gifts
“For our last event, they gave us a generous gift, they are close friends and we know how much a dish cost them. How can we come to rejoice with them when we have no way to give them a dignified gift.”
Hiding behind the costume: I don’t like it
The gift should not cover the cost of the dish. Give a gift according to your ability. When it comes to people close and dear to your heart, it’s a good idea to update them on your financial situation and postpone giving them the generous gift you’d like to give them when you have the opportunity to do so.
On the way to the wedding stop at an ATM
The costume: We have a big beautiful house
“The house we bought is really stunning, but we don’t really have the ability to handle any repayment of the mortgage. After the regular payments and the mortgage, we had almost no money left for anything, barely enough food. We rely on help from parents every month.”
Hiding behind the costume: We have a mortgage that we barely pay and because of the stress we don’t enjoy the walls.
Before making a decision to purchase an apartment, it is necessary to map the economic situation with reference to expected changes in the amount of the mortgage (as a result of changes in the interest rate and the state of the economy) and your economic ability (as a result of changes in family structure, changes in employment, etc.).
Only when you know what equity you have and the maximum monthly repayment you can commit to (one that leaves a financial “margin of safety”), can you truly commit to an amount that you can live with each month in peace.
