Charity begins at home

‘Thank God,’ says Ronit, ‘Rosh Hashana went well. We
had plenty to eat.’ 

That’s saying a lot for Ronit and
her family. If not for some drastic changes in the
past few years, her six children could have been among
the one million Israelis who, charity groups say, go
hungry on a regular basis. Not long ago, things were
so bad that Ronit was afraid to walk down the street,
lest a store owner demand she pay an outstanding debt.

Although Ronit’s husband Yaron makes a decent living
doing home improvement jobs, the couple was deeply in
debt, and sinking deeper by the day.

‘Our overdraft was at NIS 65,000,’ Ronit recalls, ‘and
growing by NIS 3,000 every month. Whatever we needed,
we bought. If we didn’t have the money for it, we just
bought in installments. And to be honest, we didn’t
really need a lot of it.’

Realizing that what they really needed was help – and
loath to take a handout – they called Pa’amonim, an
organization whose approach to charity is to help
people help themselves out of their troubles.

It didn’t take long to see what was dragging Ronit’s
family into financial ruin. The first time financial
coach Shira Deitcher showed up at their home, Ronit
says, she was shocked.

‘We would leave the electric kettle on all the time,
just in case,’ Ronit recalls. ‘What can I say? My
husband likes to have several hot drinks each day. But
at Shira’s suggestion, we started turning on the
electric kettle only when we wanted a drink; soon we
cut it out altogether and fired up a finjan on the
stove instead. That move cut NIS 600 out of our
bi-monthly electric bill.’

Putting the air-conditioner and the boiler on timers
saved more money, and made the couple realize how much
money they were wasting. Deitcher helped them go
through a grueling itemization of their expenses, and
encouraged them to record in a journal every single
shekel they spent, to give them an alarmingly accurate
financial picture.

The picture was alarmingly bleak, too. Changes would
have to be severe, and they would have to be
immediate. One step was to bring in more money. So,
after 13 years of taking care of the kids and the
home, Ronit went back to work, cleaning houses to cut
down the overdraft.

‘We really don’t care that other people have more
respectable jobs,’ she says. ‘For a few months, when
the home improvement jobs were infrequent, my husband
cleaned stairwells. We understand that if you work
hard, you’ll earn the money you need.’

In addition to putting in extra hours at work, the two
did all they could to tighten their belts at home,
too.

‘Some Shabbatot, we ate canned tuna instead of fresh
fish. We cut down on meat and chicken, too. Several
times, we were offered food from charitable
organizations. But we never went bankrupt,’ Ronit says
with pride, ‘and we never took handouts.’

That fierce independence and work ethic differentiates
Ronit and her family from a lot of the able-bodied
regulars at soup kitchens and on food package delivery
lists.

‘I’ve been told by someone who works at [a large
nationwide charity] that they have some people
receiving food who are the third generation of their
family to do so,’ Ronit says in can-you-believe-it
tones. ‘They’re not ashamed – on the contrary, they
expect it. That’s living in a culture of poverty, and
I’m against it. I never did it. My husband didn’t do
it. I don’t want my kids to do it. I prefer to help
myself rather than take help from others.’

IT’S THAT kind of attitude that Pa’amonim is trying to
encourage.

‘We chose the name ‘Pa’amonim’ [‘bells’] because we
wanted a name that had no connotation of poverty,’
explains Uriel Lederberg, the organization’s founder.
In fact, Lederberg doesn’t want his organization to be
at all like most charities that aim to help the poor.
To begin with, he wants to work with people who are
genuinely interested in changing their habits for the
better.

The idea behind Pa’amonim came a decade ago, after an
incident soured Lederberg on the ‘give, give, give’
model of charity.

Lederberg, who was studying in yeshiva and teaching
after his army service, was approached by a woman in
dire straits. The single mother had bills she couldn’t
pay, and creditors were threatening to repossess
things from her home. Moved by her situation, he took
up a collection and raised ‘huge sums,’ as he says,
‘several thousand shekels.’

Within a few months, though, the woman came back, even
more desperate. ‘The same problems had returned,’
Lederberg explains. ‘She needed more money, and fast.’
So again, he collected donations. And again, the cash
was only a temporary solution.

‘That’s when I realized that just giving people money
wasn’t the answer,’ he says.

The real problem, Lederberg surmised, lay in a lack of
financial discipline. What was needed, he thought, was
an ounce of prevention, not a pound of cure.

The pudgy Lederberg, sporting a long red beard and a
large crocheted kippa, points to Jewish sources to
support that notion. The Rambam, he notes, wrote that
the highest form of charity was not the giving of alms
but helping someone support himself. Likewise, a
midrash on Leviticus states that it is better, and
easier, to help someone before they stumble; once
someone falls down, the midrash says, it takes much
more effort to get them back on their feet.

What Pa’amonim tries to do, with its budget worksheets
and austerity programs, is to teach families how to
manage their finances to minimize their debt – and
eventually master it. It’s a ‘holistic’ approach, as
Lederberg likes to say, that stresses living within
one’s means and includes a year or so of personal
training with a Pa’amonim volunteer. It’s catching on,
too: This year, the organization will have worked with
some 2,000 families, through more than 600 volunteers.
‘We’re not trying to solve the whole country’s poverty
problems,’ Lederberg says. ‘We’re focusing on the
‘micro’ of the poverty issue, one family at a time.’

MAKE NO MISTAKE, the process that Lederberg prescribes
is nothing short of a reeducation. The behaviors that
turn one month’s shortfall into a consistent crisis
are the result of a mistaken approach to money, which
must be corrected for there to be any long-term
benefit.

‘I went to visit a young family stuck with NIS 50,000
of debt,’ Lederberg says by way of illustration, ‘and
what do you think I saw? A new sofa and new curtains,
on top of a house full of electronics. The couple
said, ‘What? The NIS 50,000 debt is too much for us,
so what difference does it make if our debt is NIS
55,000?’ This is the kind of mentality that a lot of
people have.’

Overspending may be the most easily identifiable
problem, but people often have a difficult time
figuring out what their budget should be.

‘People think only about how much they owe right now.
They don’t realize that a family is a business too, in
a sense,’ says Lederberg. ‘But a couple that makes
even slightly less than the average brings in about
NIS 100,000 over a year. That’s a significant amount,
and it needs to be budgeted, like a business. You have
to have a monthly budget.’

By listing all its expenditures, a family can see by
how much spending needs to be cut, and decide where to
cut back. Pa’amonim does not preach against ‘wasteful’
purchases, urging the families to decide what is most
important to them.

‘Cigarettes are a big expense, and they’re unhealthy.
But I don’t tell people not to smoke,’ says Deitcher.
‘What I do is to say, ‘Okay, you can budget several
hundred shekels each month for cigarettes if you want.
But they’re going to come at the expense of something
else.’ Everyone has to realize that there’s a give and
take.’

A common hurdle for Israelis is the cellphone, says
Lederberg, who calls the device ‘a modern plague.’
Often, he says, families with hardly any disposable
income spend hundreds of shekels each month on air
time.

‘If the communications minister were to demand 25
percent of the state budget,’ says Lederberg, ‘he
would be sent packing. Yet that’s what some families
spend on cellphones each month.’

In general, he says, if a family spends more than 7%
of its monthly budget on communications – by which
Lederberg means not only cellphones but television and
Internet service too – trouble isn’t far behind.

Pa’amonim tries to get families to pay off their set
costs – housing, taxes, insurance – then to try to
trim their variable costs, such as food, travel, etc.
But even when a family wants to spend less, it doesn’t
always know how.

‘I visited a very educated couple, both of whom made a
pretty good salary, that was deep in debt,’ Lederberg
says. ‘The husband swore he was cursed. ‘It’s like
Pharaoh’s dream of the skinny cows swallowing the fat
cows,’ he said. ‘As soon as the money comes in, it’s
gone, as if it had never been!”

Their downfall, he explains, was the ‘installments
trap.’ ‘Israelis love to pay for everything in
installments. There’s a psychology of feeling as if
you hadn’t actually spent money. But,’ he says,
‘abusing the option to make purchases in installments
is a proven path to financial disaster.’

Why?

‘You don’t realize how much you’re spending, or when
you’re spending it. As soon as you put your card back
in your wallet, you forget how much you’ll owe, or how
long you’ll owe it. And the payments pile up, without
you knowing exactly why, so that the short-term
improvement in cash flow offered by making
installments becomes a long- term cash flow problem.’

One of the most egregious errors in using the
installment option is also one of the most common,
says Lederberg – at the check-out line at the grocery
store. ‘Buying your monthly groceries in installments
is a great idea – if you’re not going to eat next
month, or the month after that. But since you do eat
every month, and have to buy more groceries to do so,
it’s a terrible idea.’

As in every other consumer-driven society, Israelis
also succumb too often to the lure of sales – most of
which are designed to make us spend more money, not
less.

‘I once stood outside a Home Center store and
conducted an experiment,’ Lederberg says. ‘I asked one
gentleman on his way in what he needed to buy. He said
he needed only one little piece of pipe. Now, it only
takes five minutes to buy a piece of pipe. But the man
didn’t emerge from the store until an hour later,
laden with a full cart of all sorts of other things.
‘Didn’t you need only one small piece of pipe?’ I
asked. ‘Yes,’ he replied, ‘but all this was on sale!’

‘I helped the man to his car,’ Lederberg says,
readying to deliver the big punch line. ‘And guess
what? He had forgotten to buy the little piece of
pipe!’

It is that kind of behavior that makes Lederberg
stress that people ought to buy something only if they
needed it before they noticed it in the store.
Otherwise, he says, it doesn’t matter that a product
is on sale. They’ll just spend money that they
shouldn’t spend on a product that they don’t actually
need.

Abandoning these behaviors – many of which have been
reinforced since childhood – can be difficult. But, as
Lederberg says, ‘if you want to live differently, you
have to act differently. And if you want to act
differently, you have to think differently.’

IN RONIT’S house, different thinking and small changes
have led to big results.

‘Wow, the discipline!’ she says. ‘It’s everywhere
now!’

Ronit no longer puts laundry softener in every load,
for example, saving it only for those that really need
it. And instead of buying sandwich bags in a cardboard
carton for six or seven shekels, she buys the same
bags in a plastic wrapper for a fraction of the cost.

The kids notice this and learn an important lesson.

‘Everything begins with the example we set as
parents,’ she says. ‘My kids are used to seeing me in
good, expensive orthopedic shoes. But when I needed a
new pair, instead of spending NIS 300, I went to the
store and had them fixed instead, for almost nothing.
My children saw me sacrifice, and they took note of
it. I also gave up my cellphone, and my husband only
uses the ‘Talkman’ pay-as- you-go service, capped at
our monthly allowance of NIS 100. The kids see what we
have given up.

‘Recently, my son asked for a new hat and a new jacket
for yeshiva. What can you do? You have to get new
clothes sometimes. And I want to get new clothes for
my children. But the monthly budget didn’t allow it.
So we waited a few weeks.

‘Learning to put off purchases is a very important
part of education. Nothing comes immediately. This is
the time to let that message sink in.’

And that message is sinking in.

‘It’s so nice to see the kids saying to each other,
‘You don’t need that. Let’s get this for less, and
save for something else later on.’ Last year, one of
my sons collected these rabbi cards. It’s very nice,
you know, to have this album full of them. But now the
album just sits there. The other day, my son said,
‘Mommy, this year I won’t buy new cards.”

Ronit and her husband spent long hours going over
their financial statements, building a budget that
would help them pay off their debts. (‘To be honest,
it brought us closer to each other,’ she says.) But
they also sat down with their children and made them
partners in the effort.

‘We asked the kids, ‘What are you willing to do
without?’ We all agreed that we couldn’t shut off the
air- conditioner at night – here on the coast, it’s so
humid, especially in the summer – but as a trade-off,
we cut down on our Shabbat snacks, from six different
kinds to just one.’

Before the school year started, the kids got second-
hand backpacks instead of expensive new ones.

‘I’ve heard from friends who refuse to take second-
hand things,’ Ronit says, ‘but we’ve gotten over that.
We routinely give things that we don’t need anymore to
others. Why should we turn away something perfectly
good from someone else?’

The family has developed its creative side in its
attempts to save money. Ahead of Rosh Hashana, Ronit
says, instead of buying greeting cards, they made
their own from materials they had at home.

‘It’s not about being cheap,’ she says, ‘but about
buying only things that you really need, or buying
things that are perfectly good for less than the cost
of the premium products. Today, my kids appreciate
much more the luxuries they once wasted. We don’t
withhold things from them, but we don’t throw things
at them without end either.’

The children receive an allowance, but now they have
to account in a journal for every shekel of their
spending. They use their own money to buy things that
the family budget won’t cover.

‘I bought school supplies,’ says Ronit, ‘but my
daughter wanted a special pencil case. So she saved
her money until she could buy it herself. It wasn’t
much, just NIS 18. But for her, it was a big deal. And
when she finally had saved enough and told the
saleswoman how proud she was, the saleswoman was so
impressed that she gave my daughter her money back! My
daughter then saved some more, and bought herself a
watch.’

EACH SMALL victory for Ronit and her family is a step
on the road to financial recovery. It has been a long
and difficult road, but the family has its eyes set on
the finish line.

‘We have worked so very hard,’ Ronit says. ‘Over 15
months, we paid back more than NIS 40,000 in debts.
Shira saw how hard we were working, too. She told us
that if we paid off at least two-thirds of our debts,
Pa’amonim would help us with the rest. And they did.
Now, instead of owing NIS 20,000 to lots of people, we
are paying off an interest-free loan to Pa’amonim over
two years. It’s a real relief to not have so many
different creditors.’

Today, the couple observes a strict financial regimen.
They pay their bills each month via automatic
withdrawals, whereas before they would have spent
their money before bills came due. In accordance with
Pa’amonim rules, they do not go into overdraft
anymore, and they observe a tight cap on their tab at
the corner store.

‘By no means are we resting on our laurels,’ Ronit
says. ‘This is no picnic. But a year from now, I want
to be able to tell you, ‘We’re out of debt!”

Making the final loan repayment is not the end for
Ronit and her family. She would like to be able to
provide music lessons for her children and, when the
time comes, marry them off. Without any savings now,
she and her husband know that they’ll have to maintain
their new discipline if they are to realize their
dreams.

‘Plus,’ she says, ‘Pa’amonim has invested a lot of
trust in us. We don’t dare betray that trust. We don’t
want to let them down.’

In a country of widening gaps in prosperity, Pa’amonim
believes that resolve like Ronit’s is essential. After
all, not everyone who struggles to make ends meet is a
victim of hard luck; for many, the slow, sure descent
into the quicksand of overwhelming debt can be
avoided.

‘What it comes down to,’ says Lederberg, ‘is that we
believe in people. We believe people can work their
way out of this disaster.’

Advertisements
%d bloggers like this: