Mad Hon · Balanced budget

Raise your savings rate

Raise your savings rate. A step-by-step Mad Hon guide for your Balanced budget score, written for olim.

1. Start by counting the saving you never see.
Most olim conclude they save nothing because they count only the transfers they make by hand. Open a payslip and add the lines that are already saving: your own pension contribution, the employer contribution beside it, the severance component, and both sides of a keren hishtalmut if your terms include one. Your own contribution comes out of your pay; the rest accumulates on top of it. Separating the two tells you what you actually control.
2. Pick one denominator and stay with it.
A savings rate is monthly saving divided by income, and the figure moves a long way depending on whether you divide by gross or by what reaches the account. Neither is wrong. Choosing one and holding it is what makes next quarter comparable to this one. Write down which you chose.
3. Automate the next layer, on the day the salary lands.
Add one hora'at keva, a standing order, to a separate savings or investment account, dated to payday. Two percentage points is a real change and a small enough one that the month absorbs it. The mechanism matters more than the amount: an automatic transfer removes the monthly decision, and the monthly decision is what fails.
4. Split every rise before it arrives.
When pay goes up, send half of the increase to saving and let the other half improve your life. The rise is still felt, and the savings rate moves without a month of restraint. A promotion or a move between employers is the cheapest moment there is to raise the rate, because no existing spending has to shrink.
5. Check after three months, and check the right thing.
Open the account and confirm the new rate actually held. An Israeli current account normally comes with an overdraft facility attached, so a standing order that was too large will still have gone through, quietly funded by the overdraft. A transfer that "worked" while the balance drifted below zero is a transfer that failed. Lower it and try again; this is a cycle of adjustment, not a single decision.

Raise your savings rate. A step-by-step Mad Hon guide for your Balanced budget score, written for olim.

1. Start by counting the saving you never see.

Most olim conclude they save nothing because they count only the transfers they make by hand. Open a payslip and add the lines that are already saving: your own pension contribution, the employer contribution beside it, the severance component, and both sides of a keren hishtalmut if your terms include one. Your own contribution comes out of your pay; the rest accumulates on top of it. Separating the two tells you what you actually control.

2. Pick one denominator and stay with it.

A savings rate is monthly saving divided by income, and the figure moves a long way depending on whether you divide by gross or by what reaches the account. Neither is wrong. Choosing one and holding it is what makes next quarter comparable to this one. Write down which you chose.

3. Automate the next layer, on the day the salary lands.

Add one hora'at keva, a standing order, to a separate savings or investment account, dated to payday. Two percentage points is a real change and a small enough one that the month absorbs it. The mechanism matters more than the amount: an automatic transfer removes the monthly decision, and the monthly decision is what fails.

4. Split every rise before it arrives.

When pay goes up, send half of the increase to saving and let the other half improve your life. The rise is still felt, and the savings rate moves without a month of restraint. A promotion or a move between employers is the cheapest moment there is to raise the rate, because no existing spending has to shrink.

5. Check after three months, and check the right thing.

Open the account and confirm the new rate actually held. An Israeli current account normally comes with an overdraft facility attached, so a standing order that was too large will still have gone through, quietly funded by the overdraft. A transfer that "worked" while the balance drifted below zero is a transfer that failed. Lower it and try again; this is a cycle of adjustment, not a single decision.