(photo credit: INGIMAGE / ASAP)
Shavuot: The 10th commandment and your finances We all have our favorite cheesecake recipe. Personally I am not a huge fan of homemade cheesecake; I love the bakery variety. While cheesecake dominates the headlines for Shavuot, let’s not lose sight of the real reason of the holiday.
We are celebrating the Jews’ receiving the Torah on Mt.Sinai. Outside of eating cheesecake on top of a brownie – highly recommended, and it was my lunch the other day – the high point of the day is the reading of the 10 commandments.
I’d actually like to focus on the 10th commandment and how that relates to our finances.Don’t covet
The last of the big 10 is Lo tachmod, do not covet. The Torah begins by warning against coveting someone else’s home (Lo tachmod beit rei’echa). It goes on and prohibits desiring another’s wife, servants, ox and donkey. In explaining this rather odd formulation, Rabbi Zev Leff suggests that the root of coveting another’s assets is a lack of satisfaction with one’s own lot in life. “If only I were that other person,” reasons the coveter, “I would have happiness!” Hence, all of that person’s relationships and assets are equated since the coveter wants to be that person rather than desiring a specific one of his items.
Perhaps this is the reason that the Torah begins by warning against coveting another’s house followed by a second warning concerning specific items: It is the desire to be another person in general – to have his household – that leads to coveting his specific possessions.”Did you hear about the Wilsons’ trip?
When I sit with families and review both their finances and budgets, I am often struck by certain items that they spend money on, as it would seem to be out of character for them. I’ll ask: “Why did you take the whole family on a European skiing trip, when in order to pay for it you had to dip into savings because you are having trouble keeping your head above water on a monthly basis?” The typical answer is: “You are right that we couldn’t afford it, but our daughter’s good friends all went with their families, and she felt bad that she wasn’t going, so we decided to take the family.”
The 10th commandment teaches us not to try and “Keep up with the Joneses.” Don’t spend money, and especially put yourself at financial risk, because you want what your friends have. Focus on your own specific goals and needs and work to achieve them. Forget about how much money your relative has or what kind of new living-room set they just bought. As it says in Ethics of the Fathers: “Who is rich? He who is happy with his lot.”
Get on track
Instead of focusing on the bank accounts of others, focus on building up your own nest egg. The first step is to make a budget. I can’t stress enough the importance of taking control over your spending. Only by tracking income and expenses can you start a realistic savings plan and start building wealth.
Then start saving. There is no shortcut to building wealth.
You need to start investing, and with discipline, the wonders of compound interest and the growth of the stock market, over time you will create a comfortable nest egg.
It is of utmost importance to maximize your retirement- account contributions. There is no better investment than a tax-deferred investment. If living in Israel, make sure you are maximizing contributions to your keren hishtalmut and kupot gemmel. Keep the money invested and you will be shocked at how much you can accumulate over the long term.
Pay down your overdraft. Credit-card debt or overdraft is the No. 1 obstacle to getting ahead financially. The interest paid on debt is astronomical and would be much better used being plowed back into savings. Increased debt levels can be the kiss of financial death because it’s very hard to pay it off. If there wasn’t enough money to pay for something in the first place, how are you ever going to pay off the debt? It’s time to take responsibility for your own financial situation. Forget about everyone else and focus on implementing these steps to put your family on solid financial footing.
Now back to the cheesecake. Chag Sameach! The information contained in this article reflects the opinion of the author and not necessarily the opinion of Portfolio Resources Group, Inc., or its affiliates.
[email protected] Aaron Katsman is a licensed financial professional in Israel and the United States who helps people with US investment accounts. He is the author of the book Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing.