The owner of any business knows that he must make a profit. To do this, he needs to plan his steps. Managers of organizations outline a strategy, or in simple words – study the environment, competition and constraints and determine which path the organization will follow (markets, products, services, budgets, etc.) in order to achieve its goals.
You have to understand that even businesses that don’t manage their strategy have a strategy. The problem – not they manage it. The business gets carried away and responds to events rather than initiating them. Accordingly, his chances of survival are very low.
An equal decree can be applied to our lives – if we do not plan life and do not manage it accordingly, time passes and things run on their own, but not under our control. This leaves us like a leaf blowing in the wind, with the impact of frequent changes – technological, economic, social and other – significant and leaving us unable to cope with them successfully.
At Paamonim, we try to help families manage their household finances wisely. For this purpose, we put the issue into a controlled process – reflecting the family’s financial situation, building a budget and maintaining its framework over time.
The question arises – is this enough? It is reasonable to assume that the problematic economic situation that many families find themselves in stems in most cases from an ongoing deterioration that has made the family realize that it is on a dead-end road and that it needs counseling and accompaniment. The big question: How do you prevent deterioration? How do you control the course of things?
The Sages said, “Tul happens from between your eyes” in other words – how do we manage life in an informed and planned way in order to avoid, as much as possible, getting caught up in adversity, and when they happen, knowing how to deal with them. There is no magic cure, it requires intelligent planning and management of the entire course of life. Like a business. Without planning, management and control, it will be difficult for us to successfully overcome the obstacles.
So why not do it? One of the main points that needs focus stems from the situation in which the family does not have a “boss” who directs and directs (as in organizations). The family has to do it themselves and it doesn’t know how to do it, or its determination isn’t enough.
Building a family and constraints stemming from the process
The family unit, which begins with a relationship and continues with the sons of a family, embraces a wide world of activities and constraints such as: raising and educating children, taking out a mortgage, purchasing an apartment and household equipment, strengthening the economic position, strengthening the relationship, coping with crises such as layoffs, falling wages, and more, brings the family to many junctions where complex decisions are required, such as: whether external funding is required and how much, From which bank are the lessons learned and under what conditions, what is the balance that will remain to finance current life, and will it be sufficient for the standard of living to which the family has become accustomed? What and how much is consumed on an ongoing basis and does it meet the budget (is there even a budget?), or does it lead to deviation? Is the deviation expressed in overdraft and what is its size, or are loans also taken, which undoubtedly make it difficult for the family’s financial situation and more?
It is quite clear that if the family does not manage all the complex processes with any sense whatsoever, and does not set itself defined tasks, in time zones that will be determined, in given budgets, in which it is necessary to determine how they will be funded, and control tools for all processes, it will quickly find itself on a path that will make it difficult for it to get out of it, when the deterioration in its economic situation is likely to worsen.
A number of issues involved in financial management of a household have been raised here in a nutshell. In essence, one must think, plan, execute and control, and preferably not only the economic side but the entire course of life. You have to control the course of things and not be dragged after them. Those who do so are likely to have brighter futures than others.
The writer is Dr. Israel Boxer – a lecturer in economics and accompanying families in the Paamonim organization.
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