a nickel ain’t worth a dime anymore November 5, 2009
Posted by jonnydegani in budgeting, taxes.add a comment
Generally speaking, more money is good money. But we don’t just earn money; we pay for it with time, effort, sometimes even peace of mind. As we all struggle to earn money, the most important decision we make is if the money earned is worth what we give up for it.
But if one does not know the value of money earned, one cannot deduce if it is worth his or her time. It is precisely this reason that the marginal shekel must be evaluated. The marginal shekel refers to how much of the next shekel you make you’ll actually receive. In order to deduce this, taxes and insurance are taken out in order to see how much one actually receives out of his next shekel.
The following chart shows the marginal shekel rate at the various intervals where it changes.
*unless written otherwise, it is assumed that the worker is paying taxes.
Consider the following cases:
Case one: taking time off of work. Many workers are scared of missing any work out of the fear that he or she cannot afford it. But one must remember that the money that will be deducted is the money that is taxed the most. Suppose someone makes ₪ 10,000 a month and is deciding if he or she should take off an extra day for a vacation. As it turns out, the true value of that day is really only 65% of what one might think it is. In this case the extra day would really only cost ₪ 256, not ₪ 465 (assuming there were 22 work days in the month.)
Case two: overtime payment. In Israel, overtime is 125% and then 150%. But remember, this money will be taxed at your highest rate. If one is making over ₪ 12,250, then every extra hour of work is not really earning 125% and 150%; rather 72.5% and 87% respectively.
Case three: How much money should each spouse in the marriage strive to bring in? This is a very difficult and extremely complicated question with so many factors. With God’s help, I plan to tackle this question next week.
Shabbat Shalom.
it’s cold… November 4, 2009
Posted by jonnydegani in budgeting.1 comment so far
It is freezing outside. And I hate when people tell me “you’re from NY and Chicago; you must be used to it.” No, I’m not; I’m never used to it. In NY and Chicago, I had carpeting, a huge coat and heat, glorious indoor heat. This brings me to today’s money saving topic.
A while ago, I posted about small vases, small things you can buy yourself that will help you save a lot of money. Now that winter is here, I thought I’d share with you another small vase, portable space heaters.
The mazgan (heating/air conditioning) is one of my biggest expenses. I live in what many call a small, glorified closet (2.5 rooms) and I usually pay a pretty penny (agorah?) every month for the mazgan. And while I love the fact that I have central heating/cooling, sometimes it is better to use a space heater. Let me give a couple of examples:
(1) When leaving the shower. There is nothing like cold air to slap you in the face after a nice warm shower. Nonetheless, turning on the heating then is a bit pointless. By the time the heating takes effect, you’ll already gotten dressed and left. The space heater works instantly and can be put right in front of you (not too close though.)
(2) When you are alone and only staying in one room, central air is also a waste. You’d be heating or cooling an entire house when you just need one room. This is exactly what a space heater is made for.
Some words of warning: do not leave on a space heater unattended. Space heaters tend to shoot out fire once in a while (the ones that shoot out fire warm you up the best, but are potentially life threatening), so always be on the lookout just in case something goes wrong. Never sleep with a space heater on; better a slightly bigger electricity bill than a burned down house.
Israeli tax calculator November 3, 2009
Posted by jonnydegani in budgeting, finance, taxes.3 comments
As a follow up to my previous post, I made an excel sheet that you can easily use to figure out what your salary should be.
You need to input 4 numbers into the green boxes:
(1) you base salary
(2) how much you are paid for transportation (regularly, not including additional trips not normally taken)
(3) how many points you have (click here fot the tax authority’s web page to see how many you have)
(4) how much you pay into keren hishtalmut (if it is nothing, then put in a “0″)
click here to get the file or else cut and past the following url:
The Israeli Tax System expained – salaried worker November 3, 2009
Posted by jonnydegani in budgeting, finance, job search, taxes.6 comments
It is important when drawing up a budget to know how much you’re bringing in. The following article will explain the Israeli tax system for a salaried worker. As we’ll see in this post, the amount you earn is usually not your gross salary; it is usually somewhere from 10% – 35% less.
Begin with you base salary. In our example, we will use ₪5000.
We add the basic transportation cost to this. Let’s say you take a bus where a monthly pass costs ₪250. Now your basic salary is ₪5250.
Now take your new monthly salary and take off taxes. It is a progressive system, so if you are earning ₪5250 (I know it is unfair, but it includes your basic transportation, but not any additional rides you receive throughout the month), you pay 10% for the first ₪ 4590 and 15% of the remaining amount.
| Monthly Income | Tax rate |
| up to ₪4,590 | 10 % |
| from ₪4,591 to ₪8,160 | 15 % |
| from ₪8,161 to ₪12,250 | 23 % |
| from ₪12,251 to ₪17,600 | 30 % |
| from ₪17,601 to ₪37,890 | 34 % |
| from each additional shekel | 46 % |
In this case my taxes would be 10% (₪4590) + 15% (₪660) = ₪558
But wait! There are tax points that we all get. Each one entitles us to save ₪178 on our taxes:
Every man begins with 2.25 points (2.75 for woman). Then there are additional points for serving in the army, having completed a degree, and having children. Click here for a translation of the tax authority’s page of all the additional points.
Let’s leave it simple in our case, no extra points. So our guy would get 2.25 points equal to ₪400.50. This means that his total taxes are ₪558 – ₪400.50 = ₪157.50
3) Now we have to take off for insurance. There are two kinds of insurance, and the calculations are a bit crazy, so bear with me.
From the first ₪4757:
National insurance (disability, unemployment etc.): 0.40% & Health insurance: 3.10%
From the rest of the money you make:
National insurance: 7.00% & Health insurance: 5.00%
So for National insurance: 0.40%(₪4757) + 7.0%(₪5250-₪4757) = ₪53.54
And for Health insurance: 3.00%(₪4757) + 5.0%(₪5250-₪4757) = ₪172.12
The total amount to pay for insurance is ₪225.66
4) Now deduct for the investments you make with your salary – pension and keren hishtalmut.
The pension law states that you pay in 5.5% of your gross salary (not including transportation – I know, it’s not consistent to the tax laws.) and your employer will pay in 12% of your gross salary. You can have access to this money when you reach pension age, which is currently 67 for men and 64 for women.
Additionally some employers pay something called Keren Hishtalmut. This is kind of like a pension, but it is for short term planning. You pay up to 2.5% of your salary and your employer pays up to 7.5% of our gross salary. Unlike a pension, you have access to this money once every six years.
So let’s say our example guy is paying his pension and hishtalmut. This means he has to pay 5.5% (pension) + 2.5% (hishtalmut) = 8%.
So he pays 8%(₪5000) = ₪400
Now deduct all of these items from your salary:
₪5000 + ₪250 (transportation) - ₪157.5 (taxes) - ₪225.66 (insurance) - ₪400 (investments) = ₪4,466.84
Just to give you an idea of how much you need to make in order to bring home what you want to, I made the following table. The table represents a working man (not oleh chadash, no other points) and how much he would take home from his salary.
| Salary | Brings Home |
| ₪ 5,000 | ₪ 4,467 |
| ₪ 6,000 | ₪ 5,117 |
| ₪ 8,000 | ₪ 6,456 |
| ₪ 10,000 | ₪ 7,596 |
| ₪ 12,000 | ₪ 8,736 |
| ₪ 14,000 | ₪ 9,690 |
| ₪ 16,000 | ₪ 10,690 |
As the chart above, shows, one would have to make around ₪15,000 in order to bring home ₪10,000.
One of the biggest issues people face is overspending, and when you gross salary looks very high, it is natural to think that you are getting a lot more. But with a second though, one can come to see the true value of an additional dollar, and stay away from the budgeting mistake that is plaguing our generation financially.
Game Theory and the Shidduch Crisis November 1, 2009
Posted by jonnydegani in budgeting.4 comments
The shidduch business is big bucks. From JDate to expensive shadchanim, people are willing to pay almost anything to get married. And it makes sense; who wouldn’t invest a couple of hundred or thousand dollars in order to have a happier, more fulfilled life with the one you love. Surely the investment is worthwhile. But if these avenues work, why are less women finding their soulmate?
A year and a half ago, financial write Mark Gimein wrote and article on for slate.com trying to solve the “eligible bachelor paradox” – why it seems there are always more available women than men.
“The problem of the eligible bachelor is one of the great riddles of social life. Shouldn’t there be about as many highly eligible and appealing men as there are attractive, eligible women?
Actually, no—and here’s why. Consider the classic version of the marriage proposal: A woman makes it known that she is open to a proposal, the man proposes, and the woman chooses to say yes or no. The structure of the proposal is not, “I choose you.” It is, “Will you choose me?” A woman chooses to receive the question and chooses again once the question is asked.
The idea of the woman choosing expressed in the proposal is a resilient one. The woman picking among suitors is a rarely reversed archetype of romantic love that you’ll find everywhere from Jane Austen to Desperate Housewives. Or take any comic wedding scene: Invariably, it’ll have the man standing dazed at the altar, wondering just how it is he got there.
Obviously, this is simplified—in contemporary life, both sides get plenty of chances to be selective. But as a rough-and-ready model, it’s not bad, and it contains a solution to the Eligible-Bachelor Paradox.
You can think of this traditional concept of the search for marriage partners as a kind of an auction. In this auction, some women will be more confident of their prospects, others less so. In game-theory terms, you would call the first group “strong bidders” and the second “weak bidders.” Your first thought might be that the “strong bidders”—women who (whether because of looks, social ability, or any other reason) are conventionally deemed more of a catch—would consistently win this kind of auction.
But this is not true. In fact, game theory predicts, and empirical studies of auctions bear out, that auctions will often be won by “weak” bidders, who know that they can be outbid and so bid more aggressively, while the “strong” bidders will hold out for a really great deal… But you can also see how this works intuitively if you just consider that with a lot at stake in getting it right in one shot, it’s the women who are confident that they are holding a strong hand who are likely to hold out and wait for the perfect prospect.
This is how you come to the Eligible-Bachelor Paradox, which is no longer so paradoxical. The pool of appealing men shrinks as many are married off and taken out of the game, leaving a disproportionate number of men who are notably imperfect (perhaps they are short, socially awkward, underemployed). And at the same time, you get a pool of women weighted toward the attractive, desirable “strong bidders.”
Where have all the most appealing men gone? Married young, most of them—and sometimes to women whose most salient characteristic was not their beauty, or passion, or intellect, but their decisiveness.
… for whatever socially constructed reason, the choice of getting married is one in which the woman is usually the key player. It might be the man who’s supposed to ask the official, down-on-the-knee question, but it usually comes after a woman has made the central decision. Of course, in this, as in all matters of love, your experience may vary.
There may be those who look at this and try to derive some sort of prescription, about when to “bid,” when to hold out, and when (as this Atlantic story urges) to “settle.” If you’re inclined to do that, approach with care. Game theory deals with how best to win the prize, but it works only when you can decide what’s worth winning.”
In short: the greatest factor in a woman’s ability to get married is not her looks, nor her charm, but her ability to be decisive.
Back when I was a teacher in Chicago, one of my colleagues once told me that one of the biggest challenges today is that people do not know how to make a decision. They judge decisions based on how they will turn out instead of the best decision they can make at the time and put themselves into an endless pool of “what if” that keeps them indecisive and unable to move forward in life. Perhaps tackling this challenge may help us come closer to solving the Shidduch crisis.
This is surely not a simple issue. In fact, when this the article quoted above was published, it sparked what I consider to be one of the most interesting and productive conversations I have even seen on the internet. What do you think?
a guide to jobsearching in Israel – part 4: women in Israel October 21, 2009
Posted by jonnydegani in job search.7 comments
Women do not have it easy in Israel. Women are openly discriminated against, and suffer greatly when it comes to getting a job and advancing in the workplace. Supposedly, the issue is simple. Employers do not want to take the risk having a worker gone for 3 months of maternity leave. While even this prejudice is deplorable, but maybe somewhat understandable, it is certainly not the case. A more true statement is that women suffer tremendous prejudice in Israel and even more so if they are married and of childbearing age.
While researching my thesis for my MBA (it was about HR in Israel) I came across several papers dealing with different reasons as to why women receive lower salaries and fewer benefits in Israel. Some claimed that the Olim who came from more Eastern countries were sexist themselves, and therefore as the country progressed, they made it more sexist. Other claim that the country is trying to focus on not discriminating against Olim, and has not had time to deal with women’s rights. Another group blames the army, claiming that women do not advance in Israeli society significantly because they cannot advance significantly in the army. Finally, some blame the women themselves for being too old fashioned. I personally believe that while there may be some truth in some of these statements, it is certainly not as simple as these statements make it out to be.
So now the question is what to do practically. And as always, the answer is to educate yourself and call discrimination for what it is. I know one women who recently went through a very difficult job search. At the end, she found a nice job, but the contract was written in such a way that they will never pay her for sick day, nor maternity leave (yes, it can be done.) Is it immoral? Yes. But she took it. She needed the money and a job with poor benefits is better than no job at all. But at least she knows what she is in. Lawyers get paid a lot of money to make discrimination sound very fancy; by calling it what it is, the woman knows that when she finally finds a job that will not penalize her for being a woman, she will accept it.
I have heard a lot of other advice given to women in Israeli society, most of which I disagree with. One of the guest lecturers I heard during my MBA told the women to just tell a potential employer she is not having a baby in the near future. They are looking at her stomach anyways, and by addressing the problem, she can get the elephant out of the living room. Others have told women to just expect lower salaries.
My advice for women is to shop around until you get a regular stable, salaried job without one of those shady contracts that basically removes your rights. And like I always advise women and men alike, accept a lower salary if there is room for a future in the company. In the meantime, take what you can get, while still keeping you eyes open for something else. We are in a depression and some money, even without benefits, is better than no money at all. Perhaps try to take a bad job only part time, so that you’ll still have time to look for a job.
Also, ask other women what places are good to work for and then target them (see part one of this series for how to target a company.) Hopefully, as time goes on, Israel will make it into the 21st century. In the meantime, look for a few years, and once you find that job, give it all you have and in time the sexist employers of Israel will see that they are missing out.
And remember, living well is the best revenge.
a guide to jobsearching in Israel – part 3 – heating up the job search and the interview October 18, 2009
Posted by jonnydegani in job search.2 comments
So, you’re balancing he cold and warm job search and working on your skills at the same time. Now it’s time to turn up the heat.
Imagine you see a job posted online (let’s say through Janglo or LinkedIn). If you want that job, you’re going to have to get to know the person offering the job much more personally. Try to see if you know anyone in common. LinkedIn is a great tool to find the degrees of separation between you and someone else, and it can give you a map for how to climb through the mess. Forget about e-mailing your way through – call. The phone is much more personal. Ask each person for the number of the next person on the chain and get to the main person. Find some common ground, be conversational, but get to the point.
Hopefully, one of these trails will get you headed toward some type of interview. I will not go into too many details about how to interview, because it is really a matter of common sense. There is no one way to interview, and more than likely, your ability to go through an interview is about the same as it is any conversation with a stranger; for example, ask some questions to show the other person you’re interested, maintain eye contact, be polite etc. Some people who interview you are great and some are nuts, don’t take it too personally.
One thing though – Many Israeli companies use HR tests, psychologists, and lots of other tests to see if you match as a worker. Don’t be shocked if you show up to some crazy test for 3 hours and then a 30 second interview.
Just remember to be calm, or if you’re like me and you can’t, find a way, hide your nervousness (drink some water, write stuff down so you don’t move your hands too much etc).
When you’re asked a question about yourself, sometimes there is only one correct answer. For example, when I was interviewed for my current bookkeeping job, I was asked if I am an organized person, or more laid back. Now keep in mind – this is a financial job – they want a very organized person. So even if I were not (although I am) of course I would have to answer that I am organized.
Finally, try to have a bit of a sense of humor – it will make up for your nervousness. When I was interviewed and asked what are my greatest three flaws are (typical HR question) I said “I am 25, unemployed, and balding,” before answering the question seriously. Their laughing at my joke helped me calm down.
a guide to jobsearching in Israel – part 2: sharpening skills and expanding horizons October 14, 2009
Posted by jonnydegani in job search.3 comments
By spending about on hour a day on cold searches and at least an hour or so on warm searches, you should be able to stay abreast of the job market. Your extra time will be spent talking to people, researching the companies for your warm search, and watching tons of TV. I also recommend working on some skills to help you in your job.
While I was looking for my job I noticed that many places wanted a worker with a command of Microsoft Word and Excel. I already knew Word very well, so I went through on Excel tutorial a day from Microsoft’s site so that I could write honestly on my resume, that my Excel skills were excellent. I did not learn every formula in Excel, but I learned the basics, pivot reports, and how to look for the formulas online when I am missing one.
Additionally, I searched online for free course on game theory. As any college student knows, you can learn pretty much the entire course from the course material from the lecturer’s slides. Take any college subject and google it – you’ll soon find that most lecturers from America’s top Universities offer their notes and slides online for free.
When I finally did find a job, my background in Excel and game theory helped me tremendously. My ability to analyze numbers and explain difficult financial concepts have been extremely valuable and hopefully, will help me to advance in the workplace.
Make a list of computer programs and courses that can help you in your field. If you see that nothing is available in your field, make a list of computer programs and courses that can help you in an adjacent field. When I started looking for work, I originally looked for something in marketing analysis. When I saw that most marketing jobs were really just sales positions, I switched and decided to go for financial analysis. It really isn’t such a difference and the experience opened my eyes to an interesting field that I did not originally appreciate. Whatever my future will be, the skills I am learning from my job now (dealing with Israeli banks and payment systems, department analysis, building a budget) are likely to help me tremendously whether I stick with finance or go back to marketing in the future.
a guide to jobsearching in Israel – part 1: cold and warm October 12, 2009
Posted by jonnydegani in job search.9 comments
If you’re looking for a job, you’ve probably heard the term “acharei hachagim” about a million times already. Well, the time has finally come. My next few posts will be regarding job searching in Israel.
For part one, I would like to present a two pronged job search strategy.
The Cold Search – These are the jobs you look for en masse. When you search places like jobnet and jobmeaster, you’re bound to find hundreds of jobs that match your needs. Unfortunately, many of these jobs are (1) not directly advertised from the company looking to hire; rather, from a placement agency, (2) repeats of the same position posted by several recruitment agencies (3) not current. On the other hand, there is the occasional diamond in the raft, so it worth spending up to an hour a day of you jobsearch time responding to these (try to respond to at least 100 jobs in that hour – it is easier than you think). These should be responded to quickly, no cover letter, nothing personal. Because less than 1% of these places will even contact you, spending too much time e-mailing these jobs is a bad return on investment (your time).
The Warm Search – At the same time, you need to network yourself into finding people who can help you find a job. The first thing to do is to think what industry you want to work in – let’s say marketing. Then think which companies have big marketing departments in Israel – consider Proctor and Gamble, Osem and A.C. Nielsen. You’re next step is to contact someone in the company who can give you an in. Ask a friend if they know anyone, ask your school for an alumni directory, or just search for someone who work in the company via LinkedIn. Contact people via LinkedIn sending a message along the following lines:
Hi.
My name is JOB SEEKER’S NAME. I am an American Oleh looking for a job in Israel. I am trying to get an entry level position in COMPANY NAME and by a LinkedIn search found that you work there. Would you be willing to talk on the phone? If not, could you give me some advice by e-mail? Any help you could give me would be greatly appreciated.
Thanks,
JOB SEEKER’S NAME
JOB SEEKER’S EMAIL ADDRESS
JOB SEEKER’S PHONE NUMBERS
Note: in order to contact someone on LinkedIn, you have to either be connected or members of a shared group. That being said, join groups associated with Israel, where your contacts will likely be members.
When I did this, over half the people I contacted got back to me, some by e-mail, some by phone. I nicely asked these kind people for their help. I asked them how they got started, how I can get started and if they can do anything to help me. People are nice and in Israel we’re all family, so many people are willing to help.
Aim to build your warm network by at least 3 people a week. Make an excel chart and write down your last contact and where you are holding with ever contact. Every three weeks, subtly drop an e-mail and see what’s going on, if there are any new entry level positions in the company and if your contact can assist you in any way.
In the mean time, get ready by preparing your resume. I have made a point of saying thousands of times that your resume isn’t that big of a deal, but it should (1) be written nicely, (2) be in Hebrew as well as English (ask a friend in your neighborhood to sit down with you and translate it) and (3) should have a few variations (ie one for marketing, one for finance etc.) so that you’ll be able to send out the correct resume quickly when running the cold job search.
At the core of your job search is balancing between the cold and warm job search. In my next post, I’ll focus on some other practical uses of time jobsearching and how it can help.
Best of luck
High Holidays on a low budget – Sukkot September 23, 2009
Posted by jonnydegani in budgeting, happiness, holidays, vacation.2 comments
If I could only visit Israel once I year, I would pick Sukkot. The entire country celebrates together for an entire week, combining family, religion, and country. But this is also an expensive Holiday – putting aside the sukkah, lulav and etrog, entertainment for 6 days of Chol HaMoed is a lot. As always, knowledge is the key, and planning frugally, your best friend:
#1 – If you can’t afford a Sukkah start simple and build on it every year. When I built my Sukkah back in New City, NY (ten points for whoever has heard of New City), I built a simple cube with tarps for walls. The first few years we used a couple of bamboo sticks and branches for the schach. Every year, we bought another part to make the Succah a bit better (a bamboo mat, better wood, nicer decorations etc.) and after 5 years we had every gadget a Sukkah could ever need. If we were to have spent all of our money on every item in one year, or buy a fancy pre-made one, it never would have happened.
#2 – Learn the halachot of lulav and etrog. People waste tons of money every year in pure ignorance of these laws. Many buy a pre-packaged “mehudar” set of the 4 species, that is very often not mehudar, and sometimes even not kosher (this is NOT done intentionally. When they are packaged, they are mehudar, but once in transport, merchandise often gets damaged). Learn the Halachot and check out the bargain bins of the etrogim. If you are willing to spend some time, you’ll very often find a kosher, mehudar etrog for a fraction of the mehudar price. (For those looking, this is a good site with most of the laws). If you’re afraid that you’ll buy something not Kosher, then go to a shuk that has a Rabbi there to check if what you are buying is Kosher (this is very common in Israel – even in small places like Petah Tikvah).
#3 – Travel with food – There are plenty of events and attractions all over Israel. Most are very cheap, but plan to make their profit with extremely overpriced food. Bring some food so you don’t break the bank on temptation.
#4 – Budget Chol HaMoed / Plan your trips – This year we have a long Chol HaMoed. Begin by asking yourself how much you can spend. Now write down the list of activities you want to do and see what can fit your budget and what cannot. It is important to understand the tradeoffs of what you can manage (ie. “if we go to this festival, then we cannot go to that one”, or “if we go here, we have to bring our own food to these two events.”). Then choose the combination that best suits your family.
#5 – Shop for a babysitter in advance. If you have to work on Chol HaMoed, then you’ll need someone to watch your kids. Go to shul and ask the Rabbi if he knows of a trustworthy girl who could use the extra cash. Meet her, have her spend a couple of hours with your family and then let her watch your kids for a day or two. Consider finding another family where the parents need to work so the babysitter can watch both sets of kids and make more money, while saving each parent some money individually.
#6 – Spend a night at the shtiebels. Go one night to an area with a bunch of different Chasidic sects and go from one party to another. When I was in Jerusalem I went from Boyan to Karlin (where they danced what seemed to be the largest real-live game of snake ever) to Toldas Aharon and a bunch of others in-between. Despite media portrayals, Chassidim are very welcoming to outsiders, even irreligious Jews, as long as you respect their requests (when they ask “no pictures”, that means no pictures.)
#7 – Have a Sukkot party (that does not focus on food alone!) – Invite some friends over and play some games from “Whose Line is it Anyway?”. Play Pictionary, Apples to Apples or something that can entertain your guests. Remember, the real secret to making through rough economic times is returning to a time when togetherness and simplicity entertained us, not expensive objects.
#8 – Use your Sukkah. I always find it odd that many people build a fancy, expensive Sukkah, and only use it to eat their meals. This is your house – spend a night playing board games. Tell stories together. Get everyone to help out when transforming the Sukkah from a dining room to a living room. Heck, nowadays you can bring in your computer and watch a movie in the Sukkah. It can only be homey if you make it your home.
#9 – Find free stuff to do – there are usually a variety of free festivals around Israel where you can bring the family and enjoy. If anyone would like to mention any festivals they have heard about or have some more money saving ideas, please list them below.
Chag Sameach!
