ASHER MEIR 58.
(photo credit: Courtesy)
In recent years, the banks and credit card companies have begun to offer various
services to help customers manage their finances. In part, this has been a
concession to criticism that banks are encouraging the problem of excessive
indebtedness, and that the overhang of unpaid debts is in large measure the
fault of the lenders.
It is a service to the customer and furthermore in
the lenders’ own best interests that borrowers are familiar with the basics of
budget and financial planning, thus taking their own share of responsibility for
ensuring that any loans taken can be realistically returned.
these services help the customer compare his income and his
Beyond that, they help compare both income and outlays over
time. Credit-card versions, which have access to exact expenditures, may also
enable tracking various categories of expenditures and so on.
service is the Nihul Taktziv (budget management) program of Bank Hapoalim.
Hapoalim has announced that they are adding a new feature, Poalim Kamoni (acting
like me), which will allow customers to compare their outlays to those of other
The bank says, for example, customers whose monthly
income is NIS 15,000 will be able to compare their expenditures to the average
expenditure basket of customers with comparable income, to help them examine
their spending habits. A young couple aged 30 with no children whose monthly
income is NIS 10,000 will be able to compare their expenditures to those of
comparable couples with children, prior to deciding on expanding the
At first glance it is hard to see the educational value of such a
tool. One way or the other, every household has to live within its means,
whether their peers do or not; one way or the other, the peers have to live
within their means, and we do not need a computerized survey to tell us
But psychologically there is a big difference between abstract
knowledge and concrete examples. Actually seeing that comparable families are
able to survive within a particular income may help some households make
critical budget cuts. If the information is merged with expenditure-category
data, it could even help families see where they are spending too
On the other hand, a potential danger of such a system is that it
could lead to “keeping up with the Joneses.” A family with responsible spending
and borrowing habits might compare themselves to others and feel they are
depriving themselves, or not spending in accordance with their status and so on.
They might start increasing their spending to an unnecessary or even
unsustainable level, trying to liken themselves to their neighbors.
will be interesting to see where this tool leads the budgets of Israeli families
– whether it will lead to new insights and more thoughtful budget planning, or
to a dangerous race to the bottom of conspicuous
Asher Meir is research director at
the Business Ethics Center of Jerusalem, an independent institute in the
Jerusalem College of Technology (Machon Lev).