A very serious lesson learned in Israel
by Ms. Babble on October 29, 2008
in American Perspective, Israel
There’s two things that people are constantly talking about here in America right now that I was shielded from while in Israel:
- The economy
- Gas prices
Americans are “tightening their belts”. Saving more of their money. Concerned about job security and 401k’s. Holding off on buying a new car. Paying off credit cards.
Everyone agrees that it’s a scary time. But aren’t these changes actually kinda good for Americans? I mean, haven’t we been living above our means for far too long?
Strangely enough, I learned a lot of these financial lessons while I was in Israel and it didn’t take a complete crash of the economy to help me realize them. Tightening the belt. Saving money. Living frugally. These are all things that I had to learn the hard way with the help of a few Israelis.
There was a time that I was drowning in debt. College has a sick way of doing that to a student. With minimum wage part time jobs, an abundance of credit card applications on campus (for a free t-shirt!), and a lifestyle to maintain, I found myself in debt far too young in life. But I recovered (after lots of hard work) and chalked it up to bad judgment. I still had the American mentality though. Even though I’m a minimalist, I was still a consumer (cough… new computers) and can be rather wasteful (cough…buying too many groceries).
In Israel, the cost of living is the same if not higher than in the United States. The gas prices are close to $7/gal, believe it or not. Going to a restaurant will easily set you back $15 for a meal (Even a McDonalds meal costs $10). And since a lot of the clothes and household items are imported, they tend to have a higher price tag too.
But the Israelis aren’t in debt like Americans. In fact, they tend to have a surplus of cash on hand. They enjoy nice things just like an American, but they also know that there’s limitations to how much they should spend. Simply put, they live well within their means.
This is what I think Americans are learning now.
I’m not saying that I’m glad the economy is in a tail spin. I think it sucks that people are worrying about their jobs and their retirement funds. But I think when we all get to that light at the end of the tunnel, we’ll have a little better perspective on how we live and we’ll change for the better.
We’ll be a stronger country for it just as I feel like I’m a stronger person for having such a great example in Israel.
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I think you need to talk to more Israelis. Israel is known for enabling its citizens to live in the “minus.” As of recently, I believe banks allowed its citizens to withdraw up to 2-3 times their monthly income from their bank accounts. How else can people afford $7/hallon gas, 120,000 shekel cars, 20,000 shekel plasma tvs, and $300,000 apartments with 30 year mortgages when the average salary is 8,000 shekels a month?!
Israel is infamous for its “live for today, because there might not be a tomorrow” mentality. This definitely extends into their spending habits….trust me.
Thanks for commenting, Marni. I’m not claiming that Israel is a perfect financial society. I wouldn’t ever argue that Israel doesn’t have its fair share of debtors. But I definitely saw a different attitude about money compared to my American counterparts. That’s just my personal experience.
I just discovered your blog and I think its great!
I’m an American who lives in Israel for over 20 years, and you are correct in that Israelis are much more modest in their consumption habits.
On the other hand, Israelis do definitely spend their last shekel every month, because our average salaries are much smaller than American ones (around half, I think).
But many have reasonable job assurance, and pension funds paid out of their salary slips. We also have nationalized health insurance (which provides EXCELLENT first-class healthcare at a fraction of the cost it would be in America).
Universities are much much cheaper than in the U.S., so in fact Israelis have the feeling that they don’t need to save as much as the average American needs too.
It is definitely a far less consumer-addicted society.
I’m so glad you found me, Shari!
Thank you for confirming my theory. I was starting to feel like my observations were way off the mark. And you’re correct in saying that “financial morality” is a lot more complicated than just simply saying Americans are more in debt than Israelis. It’s also about the cost of living and the standard of living.
I agree, here in America we live by the credit card. If we don’t have the cash and little johnny wants a new toy we dont tell him to play with the old ones, we put it on the credit card. I doubt this “crisis” will change anything though.
looks like you bought into this grap that we need to be saving more of our money because it’s good for us and the rest of the world is so poor. I worked hard for my money, I save more than most and I am proud of my accomplishments. I am not sorry i live in America where we can make as much as we want. We live in a great county. The rest of the world needs to get onboard, A rising tide raises all boats.