Cash flow is one of those things that not many people understand. People who are in financial dire straits are very likely a part of that group.
There are several stages into getting out of debt and getting to financial stability. Two central stages of reaching stability are the survival stage, and the stability stage.
This survival stage is about making sure that they’re able to feed the family, get to work and back, and overall to not “lose it all”.
The stability stage is about staying afloat. Where you’re not worried about going further into debt. You are getting by from day to day and there might be a little bit of money to put aside for that rainy day.
If someone does not know how to handle, or better yet manage cash flow, they may heading for disaster. The central “trick” to cash flow management is always keeping in mind that tomorrow’s expenses will very quickly become today’s. There’s no getting away from it.
People who are in financial dire straits as I said above, and do not know how to manage the cash flow, are one day going to find themselves in a very difficult predicament.
It’s all about discipline. Sometimes people without, forget that they are without, and allow themselves too many “luxuries’. Sometimes those luxuries may be little things like flavored yogurt, or a pack of cookies, but those things add up. A friend of mine buys a pack of gum a day. “It’s only three shekels” he says. But those three shekels add up to between 600 and 750 shekels a year if you buy a pack a day. It’s much like the argument against cigarette consumption. It’s “only” X amount of money but in the end its thousands a year.
So cash flow is not only about the timing of monies coming in and going out, it’s also about the discipline to control and manage the monies going out, and of course coming in.
Posted by admin under Child Poverty, Children, Crime, Disposable Income, Divorce, Getting By In Israel, Green Charity, Perspective, Poverty in Israel, Self Improvement, Social Justice, Solutions to Poverty, Terrorism and Poverty, Torah, Tzedakah, Uncategorized, Unemployment, What can "I" do, What can THEY do, World Poverty
A friend of mine used a great metaphor the other day. We were speaking about the differences between life in Israel vs that of living in North America. He used a very thought provoking comparison. He said that here in Israel when there is no food at home it means, that’s the way it is. Not much to do but to wait until the beginning of the next month, and payday. Whereas in the US one would say, hmmm, no food at home, lets go out to eat!
No, not everyone in Israel has the “Israeli Experience” of not having food at home. In fact, the vast majority do have, and sometimes even plenty of it.
There are however many many homes where that is very much not the case. As we have discussed before, a disposable income is something that even for the majority of Israeli families is a foriegn concept, pardon the pun.
The question of course still remains, ok, we know that, but what can we do about it?
Children of divorce are more likely to be in poverty and to live with their mothers, according to a new Census report on marriage released today.
According to the report, three-quarters of children in divorced families lived with their mother in 2009 while some 28% of them were below the poverty rate, versus a 19% poverty rate among other children. The first-of-its kind Census report is a compendium of marriage trends and statistics cut by age, race and geography. Some stats:
1) In 2009, women who divorced in the previous 12 months were more likely to be in poverty and reported less household income than recently divorced men. Some 27% of recently divorced women had less than $25,000 in annual household income compared with 17% of recently divorced men. From the Huffington Post.
As I am sure is the case in many households, there’s a very interesting point in time that joins two periods in the annual cycle of events. The end of summer vacation and the beginning of the school year.
FOR THE KIDS its a time mixed feelings; feelings of sadness at the end of summer’s “freedom”; feeling of anticipation (and sometimes sadness…) as the new school year approaches. Will there be new kids in the class, who will be my teacher, how will my grades be this year, and so one.
FOR THE PARENT’S part, its a time of excitement at their children’s advancement to a higher grade, and perhaps even a time of relief from needing to keep the kids busy over the summer. There is however another set of feelings that many families experience. STRESS!
The stress of how to make ends meet during this time can be immense. The question becomes, how can an Israeli family with 5, 7 or more kids do it? The answer is not clear…
A good friend of mine, who happens to be in a lot of debt… also has a debt to Bituach Leumi (National Insurance. The debt “cropped up” as a result of his trying to come clean with all the tax authorities. Even though he hadn’t been “making a living” in the years that the debt was incurred, he was still assessed for several thousands of shekels owing.
As part of his “survival strategy”, he basically ignored this ticking time bomb so that he could pay for the basic necessities, milk, diapers, bread, and the like. The problem is of course, that as with (almost) all debt, it eventually catches up. and that it did.
In due course the child allowance payments stopped coming in. At 1800 shekels a month, for someone not-getting-by on his 10,000 pre-tax salary, that’s a lot of cash. Especially when there are 7 children, a wife, and himself to feed.
In case you were wondering, this is NOT an article complaining about the Israeli government and its policies.
Its simply an article that tries to demonstrate the close to impossible situation many Israelis live in.
Well, there are people who really do have more serious problems, health, Shalom Bayit et-al. As they say, it’s only money…
Everywhere one turns the European social welfare model, or as it is sometimes called in the United States, the blue-state model, is breaking down. The president of the European Council said already more than a year ago, “We can’t finance our social model anymore.” And in the United States, the so-called Red States have consistently outperformed over the past decade the Blue States, which follow the European model of high taxes, high spending, and strong public employee unions. Hundreds of thousands of workers have fled high-tax California for Texas, which has no state income tax. Over the past decade, states with no state income tax grew 18% versus 8% for the other states. The 22 states with right-to-work laws have grown 15% versus 6% for the other states. And those that do not require collective bargaining for public employees grew 15% versus 7% for those that do.
Recognition that the social welfare model is history fuelled the huge Republican gains in the 2010 elections. But in other ways, the news has been slow to seep in. Despite the fact that California has been reduced to issuing paper chits for obligations it cannot meet, and the state’s rapid population loss, Californians still elected 1970s retread Jerry Brown, the one-time Governor Moonbeam, over a highly successful Republican businesswoman with an inexhaustible campaign chest in 2010. Illinois, with hundreds of millions in unfunded pension plan liabilities, nevertheless narrowly elected a Democratic governor, who promptly pushed for in increase in the state income tax, even as Republican governors of surrounding states openly solicited Illinois businesses to flee to them. And as the collapse of the European social welfare model in Europe was becoming more and more evident, the United States enacted a massive regulatory scheme, touching every aspect of national healthcare (about one-sixth of the overall economy) that will add hundreds of billions of dollars to the national debt in the coming decades.
The question, then, becomes what is the enduring attraction of the European model, and why is it so hard to reverse? Walter Russell Mead begins to answer the question with a description of the.progressive social model: “A bureaucratic and professional elite would mediate social conflict between rich and poor, improving the lives of the poor while engineering the best possible administrative solutions to pressing social problems.” The ideal was “revolutionary and even a noble one,” he notes, and it particularly appealed to one class of people – the best and the brightest who would form that professional elite. More insight here.
Nothing like summer time. Free time for all to enjoy. Swimming, camping, summer breezes, picnics and more. Family fun for all. That as we know however is not for all to be had.
There are families that not only do not have the pleasures of a lazy and casual summer. Their are those that do not even have milk in the fridge for that late morning summer cup of coffee.
Here’s the beginning of the Wiki on poverty:
Poverty is the state of one who lacks a certain amount of material possessions or money. Absolute poverty or destitution refers to being unable to afford basic human needs, which commonly includes clean and fresh water, nutrition, health care, education, clothing and shelter. About 1.7 billion people are estimated to live in absolute poverty today. Relative poverty refers to lacking a usual or socially acceptable level of resources or income as compared with others within a society or country.
For most of history poverty had been mostly accepted as inevitable as traditional modes of production were insufficient to give an entire population a comfortable standard of living. After the industrial revolution, mass production in factories made wealth increasingly more inexpensive and accessible. Of more importance is the modernization of agriculture, such as fertilizers, in order to provide enough yield to feed the population.
The supply of basic needs can be restricted by constraints on government services such as corruption, debt and loan conditionalities and by the brain drain of health care and educational professionals. Strategies of increasing income to make basic needs more affordable typically include welfare, accommodating business regulations and providing financial services. Today, poverty reduction is a major goal and issue for many international organizations such as the United Nations and the World Bank.
Years can go by until two critical things happen. 1. The pain of perpetual poverty becomes too great to continue on that way and 2. The person finally wakes up that day and says “enough is enough”. In other words, it’s wake up time!
That’s the day when people start sleeping less, working more, eating right, seeing the kids less, relying less on Tzedakah etc. etc. etc, and last but certainly not least, praying more.
That’s the day that there begins to be true hope for a better life, a better future. As Joan Baez said, “Action is the antidote to despair”.
Could this be it? Are these demonstrations going to finally wake up the “economists” we have put into power in this country? Yes, I am tempted to complain about all the wrong doing that has happened for so many years here but, though that might make me feel better… I much prefer to find joy in the possibilities.
I, as I am sure we all, truly hope that these wake up calls being made to our government will finally get the ball rolling to get things on the right track. On the track towards allowing all Israelis the possibility of making a living wage. Notice the word “possibility” and not “opportunity”. Its not about “the American dream”. Its about the minimum wage being enough to buy, if not at least rent, and home and having enough left over to finish the month without going into further debt.
Let us all hope that thus is the path we are now on. Amen!
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