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. We're focusing on the "micro" of the poverty issue, one family at a time.' - Uriel Lederberg
"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."
Buying your monthly groceries in payments 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.
'If you want to live differently, you have to act differently. And if you want to act differently, you have to think differently'
'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."
"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 the 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."