A letter to a daughter doing national service abroad in Israel

Dear PCK,

Let me start by saying how proud both Imma and I are of your decision to leave home and move abroad for a year of national service. It’s certainly not easy to leave your friends and family and move to the US. It’s amazing that you want to work with kids in the Diaspora and teach them about Jewish identity and Israeli culture, and give them, both literally and figuratively, a taste of what it’s like to live in Israel. It’s inspirational that you and 130 other girls are willing to postpone getting on with life in order to give a second year of national service, this time in a land far away.

As you know, while I will miss your cooking and fresh challah each week, I am thrilled that you will be living on your own, and really become independent. I would like to give you some tips on how to have a successful year financially. I am defining success as not calling your parents and asking for money!

Setting up a budget

You will be getting a very modest salary. Since your food costs will mostly be covered and you will be given a car, there is no reason that you won’t be able to make ends meet. There will be a tension between wanting to spend money on all kinds of fun things, touring, eating out, and living within your means. You will need to set up a budget. You know how much your income will be so you will need to make your expenses fit within that amount of money. No more relying on me to fill up the tank before you borrow the car – it’s now on you! Aside from other day-to-day expenses like utilities and so on, add a line for fun/entertainment. If you have thoughts of going on a weeklong trip during vacation, maybe save for that by cutting some of the fun/entertainment budget for a few months. No one expects you to save money this year. Live it up. It’s a once in a lifetime opportunity to see and explore new places. Just do it responsibly. You will be working very hard, after all that’s why you are going. But keep in mind if you need some extra money, you could certainly do some babysitting at night to make some more spending money.

You mentioned to me that the day you land they will take you to open a bank account. When opening the account DO NOT let them talk you into getting a credit card. I beg you, only ask for a debit card. That way you can spend only what you have.

You will be inundated with advertisements to get such and such a card, and what kind of perks come along with it. Just say no. No offense to my Australian friends and fans of Men at Work, America is certainly the land of plenty. It can be overwhelming when you go to the mall, there is just so much stuff that you can buy, and everything is always on sale.

It’s like it’s calling out to you to buy me, buy me, buy me. Tune out all the noise. Only spend what you have. Don’t borrow money from Visa, at double digit interest rates, to buy something you don’t need nor can afford.

As Amy Fontinelle writes on Investodpedia, “The sooner you learn the fine art of delaying gratification, the sooner you’ll find it easy to keep your finances in order. Although you can effortlessly purchase an item on credit the minute you want it, it’s better to wait until you’ve actually saved up the money. Do you really want to pay interest on a pair of jeans or a box of cereal?”

If you have any financial issues or are homesick, suck it up! Just kidding. Feel free to call us anytime and we will lend a sympathetic ear. Okay maybe Imma will. I’ll just tell you that you can do it and keep on pushing and fighting, everything will be fine.

Nessia Tova and as they say in the local vernacular, Ta’asi Chaim!

Abba

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.

Aaron Katsman is author of the book Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing (McGraw-Hill), and is a licensed financial professional both in the United States and Israel, and helps people who open investment accounts in the United States. Securities are offered through Portfolio Resources Group, Inc. (www.prginc.net). Member FINRA, SIPC, MSRB, FSI. For more information, call (02) 624-0995 visit www.aaronkatsman.com or email aaron@lighthousecapital.co.il.