Does the way you perceive your financial reality match the actual situation?
You don’t need to wear a mask to dress up—we all put on financial costumes, and not just on Purim. Some of us present a better financial picture than reality, while others paint a grimmer one.
In preparation for Purim, Paamonim presents a parade of popular financial costumes.
The Costume: I Have a New Car!
“When I walked into the dealership, I was offered a fantastic deal! A new car costs ‘only’ 1,500 NIS per month! What a bargain—I get to drive a new car, enjoy a three-year warranty, and won’t have to pay for repairs. After three years, I’ll sell the car, cover the financing, and buy a new one the same way.”
Hiding Behind the Disguise: I Have a Big New Debt
Anyone who thinks they bought a new car for 1,500 NIS per month is mistaken. What they actually bought is a loan—a debt with extremely high interest. After three years, the car will have depreciated significantly while the loan will have accumulated high interest. In reality, this means a double loss, amounting to tens of thousands of shekels in just three years.
The Costume: Our Fridge Is Always Full of Goodies
“Anyone who opens our refrigerator will see that we always have everything. Each family member finds exactly what they like at any given time. When we want to cook or bake, there’s never a shortage of ingredients.
The kids love eating fresh food every day, and we end up throwing away large amounts of cooked food, vegetables, and dairy products every week. We spend a lot on groceries, sometimes paying in installments. Our credit card statement is filled with payments for past supermarket purchases.”
Hiding Behind the Disguise: We Buy More Than Necessary and Pay in Installments
Buying groceries in installments means taking out a loan for every supermarket visit. The food we buy this week will be consumed this week, so it should be paid for with this month’s income—not with money from future months. Next month, we’ll need to shop again and pay for those purchases too.
The Costume: Flying Abroad Every Year Like Everyone Else
“We keep hearing about all the exotic destinations our neighbors visit every vacation. Our kids say that everyone in their class flies abroad. Then we got a tempting phone offer for a vacation loan—with flexible repayments. We decided to live in the moment and took the loan.”
Hiding Behind the Disguise: We Were “Pushed” into a Vacation Loan
Loans for “any purpose” are aggressively marketed to us from all directions—banks, credit card companies, and financing firms. They are easy to get and fast to approve, but they come with extremely high interest rates, especially those with “pay only the interest now, repay the principal later” terms. One thing is certain—this kind of loan ensures you’ll be reminded of your vacation for years to come, every month when you see the repayment deducted from your account.
The Costume: The Generous Gift-Givers
“At our last event, we received a generous gift from close friends. We know how much they paid per person for their event. How can we celebrate with them if we can’t afford to give an equally dignified gift?”
Hiding Behind the Disguise: I Don’t Like It
A gift should not be based on the cost per person—it should be based on what you can afford. When it comes to close friends and family, it’s okay to be honest with them about your financial situation and give a more generous gift when you’re in a better position to do so.
Tip: Before heading to the wedding, stop at an ATM and withdraw only what you can comfortably give.
The Costume: We Have a Big, Beautiful House
“The house we bought is truly stunning! But we can barely afford the mortgage. After paying the bills and mortgage, we have almost nothing left—not even enough for food. We rely on financial help from our parents every month.”
Hiding Behind the Disguise: We’re Struggling to Pay the Mortgage and Can’t Enjoy Our Home
Before purchasing a home, it’s essential to assess your financial situation, taking into account potential changes in mortgage payments (due to interest rate fluctuations and economic conditions) and your financial stability (such as changes in family size or employment).
Only when you clearly understand your available equity and the maximum monthly repayment you can commit to—while maintaining a financial safety margin—can you truly make a responsible and sustainable home purchase.
