Your Investments: Yom Kippur - Financial discipline and more tzedaka

Tzedaka is often translated as charity. But, in Hebrew, the root of the word comes from tzedek or righteousness.

Shekel money bills (photo credit: REUTERS)
Shekel money bills
(photo credit: REUTERS)
In both the Rosh Hashana and Yom Kippur liturgy we say that teshuva, tefila and tzedaka – repentance, prayer and charity are the keys to undo the evil decree. As this is a money column, I would like to focus on the tzedaka aspect and how, with proper financial discipline, we all can give more tzedaka than we have given in the past.
Tzedaka is often translated as charity. But, in Hebrew, the root of the word comes from tzedek or righteousness.
Moshe Freedman writes that the Lubavitcher Rebbe explained it similarly. He explains: “Lastly, the word charity in Hebrew is hessed not tzedaka. Hessed implies that the recipient has no particular right to receive help and the giver is under no obligation to provide it. Tzedaka, however, means righteousness or justice. The implication is that the donor gives out of a sense of duty.”
The question is how to have more money so that more tzedaka can be given? The answer centers on living with both financial discipline and within your means. The Mishna in tractate Rosh Hashana says the whole world is judged on Rosh Hashana, including how much money we will have in the upcoming year. At the end of the laws of holidays, the Biur Halacha commentary says that since we don’t know how much money we are allocated at the beginning of the year, it is incumbent on each individual to live within their means in order not to run out of money. We have a responsibility to not be frivolous with our money, since it comes to us by heavenly decree.
I can forgo this Yom Kippur is a time of reflection and self-examination.
Financially, start examining spending decisions and assess if you really need the product or whether you can do without. Every spending decision that is made can have a crucial effect on staying out of debt. In order to avoid going into overdraft and increasing savings, expenses need to be prioritized. This is the case whether deciding to buy a new TV or whether to pay NIS 25 for a six-minute cab ride when you could walk instead. Get in the habit of asking if each purchase is necessary. When shopping, make a list of what you actually need before you go to the store to prevent yourself from buying every great deal you see. Sticking to a specific shopping list prevents the purchase of superfluous, unnecessary luxuries.
I once counseled a family that set a goal of giving NIS 200 more each month to tzedaka. At first they thought it would be an impossible task, but after examining their spending and then prioritizing purchases by importance, they were able to easily find the money.
New Year Use the New Year to start fresh financially. Start a budget, where you have two line items that get funded before anything else. First is your tzedaka and next is long-term savings. Try to put 10 percent of your take-home income in each. If you are in debt, use the budget to create fiscal order and discipline to get debt-free and set up an emergency fund.
May we all merit a G’mar hatima tova, a happy and healthy year and may we make it a priority to live within our means so that we can increase our giving and create a better society.
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.
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Aaron Katsman is a licensed financial professional both in the United States and Israel. He is the author of the book Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing.