Who’s Cracked the Code on Frum Finances?

After reading “Financial Realities in the Frum World”, “Introducing Your Children to the Financial Realities of Frum Life” and “Changing the Language of the Tuition Debate” – there were many questions, some answers and nothing really conclusive other than there needs to be a change in “the system”.

The whole tuition debate brings to my mind a larger question – how are people making it through the major milestones of frum life and what are people earning that they can exist on a year to year basis?! The numbers boggle the mind & do not seem to add up. If it’s a challenge to pay basic bills and tuition is “killing people” – now add in summer camp?! Then there comes the major frum milestones of bar-mitzva, Yeshiva|Seminary, chassonas and post-chassona set-up – how are people accomplishing this? Credits cards, tzedukah, home equity or ?????

Being in IT, I earn a decent income, B”H – yet we are just barely scraping by with no real money to put away in savings. It doesn’t seem to me that the majority of the frum world is earning 100K – some are certainly earning much more and I believe that they are in the 10% minority. $200K seems to be a very real guestimate as the needed income based on being able to live a middle class lifestyle, afford tuition, summer camp and be able to put away a few thousand per year to save for the major frum milestones.

So my questions are:

1. How much are the majority of frum people earning on average?
2. How are they preparing for the major frum milestones?
3. How are they making it through the major frum milestones?

So while everything comes from Hashem and the amount is set on Rosh Hashannah – does anyone have insight into the financial secret behind being frum?

First published Aug 19, 2008

97 comments on “Who’s Cracked the Code on Frum Finances?

  1. Not to be a total nudnik, but I have no idea what people refer to when they say that “orthodox way of life” is exceptionally expensive. The only item that is expensive is tuition to a private school. But to complain that private school tuition is expensive is very silly in my opinion. You are paying other human beings to watch and teach your kids for the majority of the day. Why would you not expect this to be expensive? As far as other things, they cost pretty much the same. Food, clothing, housing, vacations, kid clothes, cleaning ladies, cars, jewelry, etc.. Goyim have $10.99 lobster, we have $10.99 chuck roast. Same difference in my opinion. My family of 4 is BT and we have not noticed any increase in cost of living except for tuition.

  2. Judy wrote in post # 95, that she beleives there are people who finance an orthodox way of life via: “1) gifts from parents and grandparents; 2) off-the-books unreported untaxed income; 3) buying a house with other people’s money and renting out apartments to pay the mortgage; 4) showing very little money on the tax returns in order to qualify for reduced tuition; 5) qualifying for Medicaid and other government programs. I am not blaming or judging people who do any of this to survive.”

    Judy, at least one of these items is outright wrong (off the books income), and the others are areas where much mishchief can be done. These include “showing very little money” when in fact there is more money; qualifying for medicaid by showing very little money when there is in fact more money, and in the case of renting out apartments, there are often matters of zoning violations and under- or non-reporting of income.

    I will admit to the gift route. I don’t think it’s “wrong” but it is not exactly the greatest for one’s self-esteem to rely on parental largesse to make it through everyday life.

  3. I became frum more than 35 years ago when I was only 17. I later married and worked hard and my husband and I put our seven children through yeshiva. Actually, that’s not past tense, since the three youngest children (our sons) are all still in Yeshiva and will likely continue on until….(either the money or the motivation runs out). I must confess that after 35 years and seven children (now ten grandchildren) I have still not cracked the secret to Orthodox Jewish financial survival. I suspect, however, that it has a lot to do with the following: 1) gifts from parents and grandparents; 2) off-the-books unreported untaxed income; 3) buying a house with other people’s money and renting out apartments to pay the mortgage; 4) showing very little money on the tax returns in order to qualify for reduced tuition; 5) qualifying for Medicaid and other government programs. I am not blaming or judging people who do any of this to survive. I do take issue with mosdos and Yeshivos which are not helpful or cooperative with parents, there’s a lot more they could do which would help everyone financially if they would only think out of the box. Example: Open up day care facilities, not only for children of the Morahs but for the whole community; charge money for this service (maybe less for the yeshiva parents); this would really help working moms and help the Yeshivos make money. Also, as other parents have pointed out, open up an after-school and before-school center and charge money for this service (again, less for your own yeshiva parents), to accommodate hard-working parents. Let’s extend this thinking further to cover vacation weeks such as February midyear break or right before school starts in September. Do more to help struggling working parents, and maybe working parents can do more to pay their yeshiva tuition.

  4. B”H

    I see there has been some traffic. I have a new comment I’d like to share and get feedback after a short digression – my apologies for not being able to comment or respond as Boruch Hashem, my wife gave birth to a baby boy whom we named Shneur Zalman! While I’ve skimmed the recent posts, I will try to catch up & comment over the next week.

    It is good that we believe and make histadlus based on the concept of “babies bring brochas” as I had some additional eye – openers this week. The truth is that these items have been on my periphery for a few years but haven’t really sunk in until this year – I’m part in disbelief, part in shock and part running forward on emunah – so here it is:

    Like many other parents – we are getting ready for school – uniform shopping, tuition discussions & supplies. While the numbers are more than enough to make anyone’s head spin – here what started to sink in:

    I am paying for books?! I’m overhearing my wife discuss with our older children [ages 14, 13 & 11 K”H] their seforim list. Ok – sort of use to that discomfort based on previous years – what’s “new” for me is – each one of them will require a shulcan aruch set or sefer?!?! I almost faint from the number of duplicate seforim – not to mention the duplicate chumashim, siddurim, machzorim & gemorras! But wait – there’s more:
    Then there is the cost of transportation – either bus or shared carpool [i.e. gas at the pump].

    Now add on various extra curricular activities and siyumim parties or school trips ?!?!


    Having been [unfortunately] raised in the public school system – all of these concepts are mind bending – I pay for tuition, text books, transportation, uniforms & “extras” – [supplies you’d would have to buy in public school]?!?!?!

    So on the one hand I say – “Boruch Hashem – better to spend money on this than medical bills and the like – on the other hand – I go back to my original question – how in the world are people pulling this off?!

    These expenses are coming after Boruch Hashem, simchas [a shalom zachor & bris [which we made in the house & baked most of the cakes & bread rolls as well as homemade salads to save money yet make it “kovodik”] – and just before Tishrei – now I’m thinking about the arba minim & need to order for myself and 2 older sons; my tefillin & mezuzas to be checked ?!?!?!

    I will be honest, despite my descent income – I had no way of knowing how we would afford the simchas – yet Hashem worked it out – a surprise money back from some of my benefit premiums cap being met, “shifra & puah” as part of the normal chesed large communities do [not as “tzedukah” but as a chesed] to assist with the pospartum recovery, etc.

    So while there was some definite thought on how we could save money by not having it in shul & by keeping the seudah nice but simple [bagels, cream cheese lox, tuna, egg salad vs “fleishigs”] – it still was humbling and artful how Hashem brought all the elements together b’simcha, b’kovod & b’harchava.

    Maybe this is what is meant by an old chassidic story of a businessman who was going through his ledgers tallying the debts vs profits and at the grand total came to the sum “Ayn od milvado”!

    We are all heading to the Yom HaDin where parnossa is determined [among all the other blessings]- may we all be blessed with material abundance and the reasons to spend the money should be for Torah & related mitzvos.

    Perhaps more than anything this thread has underscored that while yes, there are some definite issues that need awareness raised & fixing – Hashem guides and provides because it is very clear that “on paper” – it doesn’t add up – the only conclusion is “ayn od milvado”.

    Wishes to eveyone for a New Year where we will hear the Shofar HaGadol and be reunited in our homeland with the building of our Beis HaMikdash – may it be NOW!

  5. Ben-David:

    No, it’s not hard for a religious parent to avoid a school which pushes opinions he doesn’t like. But when you say “The only people really stuck are right-wing secular folks”, I wonder: 1) Why should such parents have no options?, 2) Why should public school be considered a proper venue for brainwashing?

    Why should we Israelis continue to tolerate old-style Mapainik-Bolshevik political brainwashing? Who, indeed are the “free-thinkers” here?

  6. Well, the school system is already so fragmented that it is not that difficult for a religious person to avoid a school which pushes opinions you don’t like.

    The only people really stuck are right-wing secular folks. But there are Mamlachti Dati schools, semi-private Torani schools, and Charedi schools for the religious parent to choose from. All of which receive some government funding.

  7. Convincing the general Israeli public that they should grant equal funding to schools that do not include math, science, and English is going to be a hard sell. Again, if you choose the option of Torah only for your sons, the responsibility is on you.

    Having said that, I do think that the Israeli secular school system is dangerously open to whatever PC brainwashing the current Minister of Education is pushing. Sarah Honig wrote movingly about her daughter’s experience fighting against the stream of Leftist propaganda in her high school that was being served up as neutral curriculum.

  8. Shunamit and Bob Miller:

    The “impositions” that Chinuch Atzmai – like other Charedi schools – seeks to avoid include teaching basic secular subjects like science and algebra.

    Much of the “Rabin legacy” and other programs are actually optional. From what I have heard, there is broad discretion given at the local level in using these materials.

  9. Bob Miller–I absolutely agree that Chinuch Atzmai should get its fair share of public funds, ESPECIALLY if they can show they are including preparation for high tech trades.

    Choosing autonomy from what may or may not be arbitrary standards in spite of the price IS, however, a choice. I will try to get some background on the deal that was cut and why.

    What is less clear to me, here in this land of “arrangements” is how the dati leumi schools so often seem able to get around stuff like the St. RabinFest and the Orwellian “Peace Curriculum” that were imposed on secular schools for a few years.

    Should Chinuch Atzmai get an equal share of government funding if their basic position is “Torah Only” for the boys? Unfortunately, the issue of where government supervision is applied will probably be settled not by research or societal studies, but by some other deal that gets cut.

    Logic and long-term planning tend to fall by the wayside here.

  10. Shunamit, that doesn’t sound like a CHOICE to me, if any of these standards were arbitrary and/or made no sense in context. Please provide evidence to support your understanding. What I’ve seen from my distant vantage point is an attempt by Chinuch Atzmai to arrive at an arrangement that would normalize funding while making due allowance for the curricula and teacher qualifications their communities desire.

    If the government of a nation that depends heavily on high tech competence can’t or won’t properly fund its own public schools, that raises a separate set of questions.

  11. The secular government schools aren’t all that well-funded and not all of them are soul-destroying, although they are too open to political manipulation by the Left when it’s in power. (Rabin worship, “nakba”, etc.

    Yes, Chinuch Atzmai should get funding through normal channels, but my understanding is that they CHOSE the current situation so that they would not be obligated by any government-imposed standards.

  12. By the way,

    Government assistance to Chinuch Atzmai schools and the like should be provided through exactly the same “normal” financial channels that serve the secular and Dati Leumi schools. This parity would eliminate the canard that aid to the Chareidi schools is a special, undeserved gift that has to be begged or bartered for.

    The Chareidi schools serve the nation’s objectives better than the well-funded secular government schools that destroy their students’ souls and loyalty to Klal Yisrael.

  13. Bob Miller–Since no one outside their community, myself included, could possibly suggest a solution, they’re going to have to figure this one out themselves. The only way the rest of us can influence the situationis by repeatedly showing that we will no longer foot the bill. Emergency charity, yes, government subsidy, no.

    I suspect that at least a few of the gdolim already have solutions and have no doubt expressed them many times. A usual, no one is listening to advice they are not ready to hear, ESPECIALLY not the haredi political machers. They hooked their population on gevernment aid and kept right on procuring it–at a price–just like drug pushers.

    Continuing education opportunities must be provided, but no, they won’t be a fast enough solution nor will they work for everyone. But we have to stop providing the drug of govenment “assistance” in anything like the old forms. And I’ll keep giving to Chasdei Naomi and especially our local chesed organization. I do still have great faith in the ingenuity of the Jewish brain.

  14. Bob Miller–Obviously, nothing said in theis blog is going to solve the growing poverty of haredim in Eretz Israel. As an Israeli citizen and working mother whose job brings her into contact with many sectors of Israeli society, my own spheres of interest and influence extend beyond what you term, “Gotchas”.

    I am firmly against reinstitution of the “Child Allowances” as they were in years past. The economy simply cannot afford them. any aid plan that sinks the rest of the Israeli society while temporarily assisting certain sectors of haredi society will ultimately pull down the haredim as well. It would do inestimable damage (chas v’shalom) to the renaissance of Torah institutions and Torah learning of the last few years.

    At the same time, I do my best to donate regularly to private charities that work to assist the poor. I take last week’s parsha (Re’eh)seriously in this regard.

    On the other hand, I do not donate to so-called “hachnassat kallah” projects for to buy apartments for the children of individuals who have not themselves worked to pay for such investments. I am not the first to point out that there is something seriously awry with a society in which a girl who does not have the keys to an apartment as part of her dowry is considered “unmarrriageable”.

    We work, we pay our own way, and we give charity to groups that will not further the social damage being perpertated on haredi society.

  15. Bob Miller–But I live HERE, in Israel. You guys in chutz l’aretz are “out there”.

    Frankly, between two low Israeli salaries, the era of “child allowances” was the only time we were able to “finish the month” comfortably. I still felt it wasn’t financially sound for the government to give us the money, but it was too much trouble to figure out the paperwork to send it back. I remember way back when, reading a proposal by one of the religious parties to increase the allowances even more, and thinking, “Holy Cow! I could quit my job, and we could still buy and maintain a CAR with this! It’s entirely too much!”

    Governments are responsible for providing POSITIVE economic incentives. I say this as an Israeli citizen and one of de WO’KIN’ po’.

  16. I’m far less concerned about causes than about the formulation and effective implementation of a cure. “Gotchas” from out here won’t produce constructive results.

  17. Ron Coleman–Wow. The fat is on the fire now. And Rosenblum always tries so hard to avoid crossing certain “party lines” in Israeli haredi culture.

    There are clear-cut causes for the rising tide of haredi poverty in Israel, and they seem to me as inexorable as the laws of gravity. Prolonged dependence on govenment funds and the generosity of others may have brought these issues to a breaking point. For various reasons, the Israeli haredi community cannnot put enough people into the workforce with skills for which the market will pay.

    This is compounded by an attitude to family size that is long on “bitachon” and short on grasping the realities of the world G-d gave us after the garden of Eden and before the coing of Mashiach (bimhera b’yameinu). The attitude of responsible stewardship of Hashem’s blessings has for too long given way to what amounts to testing Hashem to change the way He chooses the way his world currently works. As if we were deserving a continual miraculous intervention in His order of things as in the days of the Beit HaMikdash.

    Rosenblum puts a lot of effort into being a “good boy” and holding the party line, but the “Mishpacha” readership is going to crucify him for even hinting that a major paradigm shift in Israeli haredi life is inevitable. on the one hand, he goes “too far” in his description of the situation, on the other hand, he does not go far enough in elucidating its causes.

  18. Yonosan Rosenblum writes about the issue of frum finances in the haredi community in Israel. Many of the issues are quite different from the ones we’re writing about here, but some are the same and others are closely related:


    There’s a lot that’s scary in this article, including the vision of houses full of children staying home from cheder because there’s no money for tuition…

  19. Maybe we could get the new “hechsher tzedek” organization to start certifying all religious schools. Enough with the food politics already.

    And maybe some of those larger than life kiruv organizations can cut down a little on the pay per inspiration and give a little of the glimmer glitz sparkle and glitter towards the exorbitant torah education costs for all kinds of kids.

    There is more to judaism than the “Beauty” of the family purity laws , challah braiding, candle lighting and baby birthing. Its also deeper than the bible codes and other spiritual concoctions and cocktails that are just plain laughable.

    These larger than life organizations should start putting the money they collect where their mouth is.

    And in the process,make a concerted effort to create and sustain that wonderful life they are always advertising about.
    False advertising is no laughing matter.

  20. Jaded,
    We can go on and on about a single entity but the only one that has the access to the Jewish Community at large is the local Federation – like it or not.

    So the leadership in my synagogue has tried to do outreach to our bala batim to reach out to the Federation. Send tzedakkah when they have drives, invite them for shabbat and chagim, etc.

    It’s worked to a very small degree – they now do acknowledge and underwrite some day school finances, but its only a drop in the bucket.

    Look, the whole situation stinks and my peeve is that our Rabbis do not realistically address it. Perhaps home schooling? Public school with supplementary education? I don’t know, but it ain’t happening. I am very very disillusioned.

  21. Charnie,
    The center that keeps sending me invoices for pledges i agreed to over the phone,years ago, putting me on the spot,when i was a sincere sucker back in the day is not immigrant oriented. In any case , i would never want to slander any charity organization, yeshiva,tuition association , immigrant oriented yeshiva, religious school or any kind of organized hypocricy.
    I just think everything in life should be fair.
    Truth is right up there with fair.
    Thats why one Central Jewish School Association, that every single religious school would need to answer to, makes the most sense.
    Maybe one per state.

  22. JT, I didn’t miss the boat on what you meant. If you look at the literature of the types of organizations you refer to, they almost universally refer to newer immigrants, not those of us who are second, third or more generation Americans. Why else are all the rapidly assimilating suburban Jews being ignored by so many kiruv operations, perhaps with the exception of NCSY?

  23. Charnie,
    You and Ellen both clearly missed all of my points in unison.This is not about immigrants in any way. Scrap the word immigrants from this argument.i dont únderstand where that word came from. Unless your an Indian youre related to some immigrant no matter what year the immigrant set Sail.
    My main Point was as follows:
    There are associations or organizations collecting dollars for the jewish education of kids. But it seems though i have not absolutelt verified this, that thet collect and are concerned about/for one segment of the jewish population and ignoring other segments.

  24. Although we’re now getting a bit OT, there is logic in JT’s comments. Many mainstream yeshivas have buckled under the pressure to take in children from primarily immigrant families on full scholarships. Now, this is a delicate issue because, on the one hand, yes, we want to assure that these kids learn about Torah. On the other hand, many of these families have become very savvy about using the “if you don’t give us a scholarship, we’re sending them to public school..” routine, immediately evoking sympathy. And yet many of these immigrants have greatly benefited from all that America has to offer, driving fancy cars, building lavish homes, etc. Is it really fair that we should be subsidizing them to the extent that we are because they’re better at hiding their incomes then us hardworking, USA born families are?

  25. Dave,
    While you’re right, that doesn’t prevent grand schemes from being proposed. The extreme fragmentation of our communities frustrates even thoughtful attempts at mega-solutions.

  26. I’d be much happier with many small experiments in rationalized Orthodox Jewish economic life than one do-or-die roll of the dice for everybody.

    While I agree with you, I must say that I find the notion that all of Judaism (or even all of Orthodox Judaism) would agree on a single solution to anything to be unlikely in the extreme.

  27. Let’s be modest enough to avoid overstatements and attempts at general solutions.

    Often the best solutions arise from local initiatives undertaken on a small scale. Their upside, if they succeed, is the development of varied models many others can adopt to their advantage. Their downside, if they fail, is limited.

    I’d be much happier with many small experiments in rationalized Orthodox Jewish economic life than one do-or-die roll of the dice for everybody.

  28. Ellen,
    You might have missed my points. For starters, these loud organizations saving souls by constantly requesting monetary donations who exactly are they concerned about.

    One particular center has been calling me with their jewish education for kids sales pitch since 1999. They èven managed to get my new address updated recently.

    Whose tuition are they sponsoring in part or full. What about everyone else. Are all kids allowed to attend these soul catching schools ? Im assuming the schools get at least a substantial subsidizing sum for all their campaign efforts. So tuition must be alot less per kid no ? I doubt any sane set of parents is switching from a zero cost education plan to 7k cost education, due to the weather or the handsome smooth jazz talkin rabbi.

    Shouldnt everyone combine Resources concern care and cut down on costs too. Schools are not like houses of worship. That type of Exclusive gets really expensive.

    I would love to depose some of these school administrators , directors and entire tuition and contribútion commitees so i can better understand stuff on all six sides of the jewish education equation.
    The whole system makes no sense.

    Also i think there should be a refund policy for educations that contain too many misnomers and false philosophies.

  29. Hey Jaded:

    I realize I’ve let you segue (sp.?) me into a different topic, but I’ve been working for many years in the kiruv “school system” and outside of one organization that pairs Russian students with a willing sponsor (and that sponsor rarely pays in full), no one is volunteering an all-expenses paid education to the non-frum, trust me.

    What exactly is a kiruv elementary school. The ones in the brochure saving all the babies in the picture from the perils of public school. Do four and five year olds actually need kiruv.

    The kiruv school population is comprised mostly of children of immigrant Russians, Bucharians, Israelis, and other assorted Mideastern countries. Besides that some of them would like their children to become more aware of their heritage, yes, in fact, most of them are sending their babies there to save them from the perils of public school. And the NYC public school of today, sorry to say, is a far cry from what it was 20, 30 and 40 years ago. Every parent I’ve spoken with has confided that their babies and relative’s babies that went to public school come home with a vocabulary, street values, and sexual knowledge (and I’m not referring to Jr. High Health Ed) that would make the average non-frum person’s hair stand on edge (that would include the bald), to say nothing of their active participation in that new-found knowldege. That accounts for the largest amount of the kiruv clientele.

    Coed is also a sound idea.
    Not so. Students have far more difficulty focusing on their studies when they’re preoccupied with the guy/girl across the aisle. And, boy are they preoccupied. But, of course, all this is for another thread.

  30. I think there should be one central tuition control Association that rigorously monitors the tuition rates, policies and expenditures of all religious schools.

    Everyone is responsible to pay the reasonable tuition dollar amount based on the schools current expenses for the year.No more and no less. Schools should be obligated to spell out in black and white how they came to the figure they are asking for. Building funds , dinners, breakfasts, teas,auctions picnics, suppers , brunches and balls should all be banned like a bad for hareidiism Book.

    Anyone that cannot pay the reasonable amount should pluck their kids out and place them in the local public school. You birth them you pay for their education. Its part of the pain of that child rearing curse from back in the Garden of Eden.

    But dont worry , this is your Lucky year. Kiruv help is right around the corner. Wait a year or two and its very likely youre goin to get a call from the we love and help jewish neshamas association, offering to pay your tuition if only you found it in your heart to switch to a jewish school ! Hakol bedei shamayim indeed (chutz m’yiras shamayim is always conveniently omitted ).

    So the next question is
    What exactly is a kiruv elementary school. The ones in the brochure saving all the babies in the picture from the perils of public school. Do four and five year olds actually need kiruv.
    Who is funding these kiruv elementary schools.
    What made the spiritually saved parents initially choose public school. What made them change their mind. Did the parents attend jewish schools. How about the grandparents.
    Do they really get their entire tuition paid for just for switching school plans.
    Wow. Why ? Now this is what i would call reverse religious discrimination.
    Why are there separate kiruv elementary schools.
    Why cant existing jewish schools just get some more desks. This way everyone can learn to love everyone in kindergarten.
    You dont need two hanhalas either. Ditch one hanhalah.
    After they combine resources all the leftover money should be used to reduce overall tuition for every single parent.
    Donors should be kept up to date on all happenings before they occur.
    Maybe they will donate again.
    When tuition becomes higher than the average combined income , exclusivity will become a problem and schools will have to start ditching the image worries and start combining students and resources.
    Coed is also a sound idea.

  31. Ron:
    Ben-David, great to see you’re “on message” as always! But you know what they say about how you make a small fortune in Israel, don’t you?…
    – – – – – – – – – –
    That remark dates back to the period when capitalist American Jews lost their shirts trying to invest in socialist-era Israel.

    There is still a bit of truth to it – but Israel has been irreversibly set on a course of Reagan/Thatcher style free-market reform, and things are much better.

    The stereotypical Lakewood guy using his Gemorah-honed skills to study computer programming at night can do very well here. The hi-tech sector is the most financially liberated, and because it is bringing in so much money the apparratchiks are keeping their hands off.

    Attorneys and accountants have to retrain, but in this export-driven country there are good niches for people who know overseas legal and tax systems. I know several folks doing good business here based on their knowledge of US patent law.

  32. The incentive to get people to earn more can only be to let them keep more. I don’t have a clue how this could justly work, given the demands schools have.

  33. To second what Ron said. I was talking to someone who took a new job and got 30K per year more in salary. Government took its chunk (lets say around 12) in taxes and his tuition rebate got cut by even more. So in the end his salary moves from 120 to 150, he sees his family less and he gets next to no extra money. What incentive do we give for people to work hard/earn more?

  34. Me to law school classmate: “Mendy, great to see you! Nu, so now that you’ve been with the IRS for 10 years I bet you could swing out into private practice and sell your expertise as a tax lawyer very nicely!”

    Mendy: “Yes, I could, but why bother? I could increase my income from $115,000 and great benefits to $200,000 and more modest benefits on day one, probably. But the whole difference in my takehome would go to tuition once I had the higher income and didn’t qualify for any scholarship. Why bother? Now I work 9 to 5, I have a seder at night and I’m halfway to a great pension. Working at a firm would hardly put another dollar in my pocket and I’d be a slave.”

    What is missing from this (actual) conversation? Obviously, the fact that the tuition costs he’s not paying are being paid by someone else. But there is nothing irrational about Mendy’s choice from an economic point of view; indeed, he is acting very rationally.

    By the way, I must point out explicitly the obvious point that discussion of “numbers” without reference to where people live is completely worthless. Greater New York is a world of its own, not only because of social pressures and expectations, but just by virtue of how money is vacuumed out of your pocket just by walking a block — and that’s not even factoring in the “meshulachim” coming to your door all day and turning away in disgust from the offer of a single dollar bill in the face of their great needs and your utter lack of compassion. Different topic, I know, but…

    Ben-David, great to see you’re “on message” as always! But you know what they say about how you make a small fortune in Israel, don’t you?…

  35. Even if $40K is cold hard cash, the weddings easily cost more than $40K, or $50-$60K in today’s dollars.

    And, I’m not sure everyone is so lucky. I helped a kollel couple with some financial work. She had one of these large weddings. They only had around $10,000 from the wedding, which surely can’t be there considering the husband hasn’t worked more than 2-3 hours 4 days a week plus a small stipend and since she stopped working for around $17,000 a year (no babysitting costs, the MiL babysit) after the 2nd kid.

    What I’ve seen worries me.

  36. Avrahom-Moishe:
    Orthonomics – my posting was targeted university education. Vocational education is a requirement as stated in PirkeiAvos and other Torah sources:
    – – – – – – – – – – –

    Yet that “requirement” is not fulfilled in the current frum community. Children (especially boys!) are deliberately kept from attaining the most basic credentials they need to make their way in the world.

    Today, almost every trade besides shopkeeper and streetsweeper require at least a high school education. And small businesses are increasingly under pressure to use the computer as their big competitors do – to increase efficiency and reduce costs.

    How do you do that without a high-school education?

    Here in Israel the entire Haredi world works this way – and later the “drop outs” who aren’t cut out for full-time Torah study wind up taking whatever they can get, or trying to make up for lost years with vocational/night school.

    For all practical purposes, the community is condemning most of its members to poverty.

  37. mamamaven –
    Orthonomics’ observation still stands:

    Make a modest 20,0000 wedding and GIVE your kids the 40,000 outright

    – or better yet, spend the past child’s life dropping the bits of money that will eventually be blown on the wedding into a relatively safe revenue-bearing investment – CDs or index funds.

    You’ll wind up with a lot more than 40,000 – for less out-of-pocket investment.

  38. Orthonomics – The $40K cited to me was cold, hard cash, not “depreciating gifts”, which was in turn invested. That’s a chunk of change with appreciation, usually used for a down-payment later on. I’m assuming this far down the road the $40k is more on the order of $50 – 60K when you figure the rate of inflation ;) .

  39. Orthonomics – my posting was targeted university education. Vocational education is a requirement

    Engineering, nursing, medicine, medical therapies, pharmacy, dentistry, law, the various counseling fields, teaching and school administration, and accounting all require University Education.

    These are vocational fields for the most part, although they require a better liberal arts background than being a mechanic or plumber.

    Let’s not forget that many businesses are owned by someone who has the proper certifications for engaging in that business.

  40. B”H

    Orthonomics – my posting was targeted university education. Vocational education is a requirement as stated in PirkeiAvos and other Torah sources:

    What does the pauper know about property and business?
    What then should he do, sit idly? Rather, let him learn a trade,and Hashem will sustain him. (Koheles Raba 6.8)
    (Certain people are miserable failures when it comes to doing business. Still success does await them. There is a great rule that if a person does that which he knows how to do, that which his natural inclination leads him to do, he will succeed. The Divine Presence implants in him a potential to follow just such a route – and when he strives to reach it, Hashem will reward him with success.)

    The Rabbis taught: One is obligated to teach his son a trade.

    Rebbi Yehuda taught: Anyone who doesn’t teach his son a trade, teaches him to be a robber. (Kidushin 29a)

    “How does Rebbi Yehuda’s view differ from the Rabbis’?” asks the Gemara, “surely they say the same thing?”

    “The Rabbis understand,” the Gemara answers, “that one who teaches his son to do business, also fulfills his obligation, whereas Rebbi Yehuda holds that this is not sufficient. His son may not succeed in business, and without a trade to fall back on, he may resort to theft.(Kidushin 30b and Rashi there)

    Rebbi Meir said: A person should always teach his son an occupation that is clean
    [Clean – A person should pick not only that which is physically clean, but also that is spiritually clean – there should be no element of dishonesty or theft mixed-in with it.] and easy [Easy – This means that it should not involve huge capital outlays and expenditures – neither financial, nor physical. (Tosephos Yom-Tov)],and pray to the One who owns all wealth and possessions;for a person’s occupation affects neither his poverty nor his wealth, rather all depends on one’s merit.(Kidushin 82a)
    [And pray to the One who owns all wealth – While, in general a person’s prosperity is decided by his mazal, there are times when a person’s merits may change his mazal. Then there are times where only very extraordinary merits will override his mazal. And finally, there are instances where even such merits cannot undo his mazal. At such a time a person should turn to prayer. (Tosephos Yom Tov)]

    Or according to a different version …

    Rebbi Meir said: A person should always teach his son an occupation that is clean and easy, and pray to the One who owns all wealth and possessions; for a person’s occupation affects neither his poverty nor his wealth, rather all depends on He who owns all wealth, as the verse says, “Mine is the silver, and mine is the gold, says Hashem, Lord of the Hosts.” (Chagai 2.8) (Kidushin 82b)

    A person should therefore, seek out the most pleasant occupation.

    Rebbi said: The world cannot be without a perfumer, nor without a tanner; fortunate is the one whose trade is making perfume; woe to the one whose trade is tanning.(Kidushin 82a)

    see: http://www.shemayisrael.com/publicat/schwartz/a13.htm#_ftn16

  41. How many frum parents actually retire? In the community I am in, I just don’t see that. It seems that the older people in the community keep on working and helping their children, even as they become less agile. Maybe not retiring is part of the equation.

  42. That should read succeed. Add in sound financial management alongside education and hard work. One simply can’t get ahead if they don’t take care of the resources they are given.

  43. the perceived correlation between education & income.

    The correlation is not perceived, it is based on studies over a wide demographic.

    Clearly these secular examples as well as my own debunk the myth that education = parnossa.

    Every statistical analysis contains outliers including the statistical analysis that makes a correlation between income and higher education.

    Clearly a person can suceed financially without higher education. But, an education (and I include vocational education in addition to a college/university education) combined with hard work is a good way to get ahead with less risk.

  44. It may not make sense on paper to pay high interest on an overdraft while earning low interest on a mutual fund – but that’s how people live here.

    Yet another way to get behind. It doesn’t make any sense and just sinks families further.

  45. Parents throw large wedding which brings in “x” amount of money in presents (the amount quoted to me as “average” 10 years ago was $40K). This money is then invested, leading to a tidy “nest egg” that can be counted on to supplement the lifestyle until such a time that they have more income.

    I’ve heard this “secret” too, but like much of frum finances, it is upsidedown. You can’t spend $60,000 on a wedding (often on a second mortgage), bring in $40,000 in cash + gifts which nearly fully depreciate the moment they leave the store, and call it “ahead.”

    To try to answer the questions:
    1. Income range is wide. There is NO question in my mind that there is a correlation between education and income. But, those with higher education in the medical and legal fields are often being crushed under debt. I will also say that household income does not equal real income. Second salaries are often eaten up by taxes and day care/preschool/camp costs. A family making their income most efficiently and spending it most efficiently can be better off than a family showing a higher income.

    Regarding saving in general, I think that you would find savings rates are low and milestones, such as weddings, are more often than not, being funded by home equity and grandparents at the expense of teaching children a trade or saving for the day when it will be impossible to bring in the income needed (aka retirement funds).

    I’d have to agree with the Chaim above that the financial mangement will eventually spell disaster, despite the denial.

  46. B”H

    Hmmmm – A spin off thread should be [or does it already exist?] the perceived correlation between education & income. I did not goto college, went to a Yeshiva that was accredited & earned a BA in theology, got an entry level IT job & work my way up through Hashem’s brochas and on the job experience.

    Most of the tones here seems to say education = parnossa. Many yeshiva-ish who have been taught how to use their heads [unlike the Western school system – you are taught to memorize & regurgitate [& forget]] can be formidable in business.

    My not yet frum in-laws barely got their GEDs and are running busness in $6M in worth for one [he’s a plumber] and the other [shviger]is now comfortably retired through investing from her earnings while an insurance as well as real estate broker.

    Clearly these secular examples as well as my own debunk the myth that education = parnossa.

    Before I get flamed – of course there may be frum people who sit in kollel & do nothing [e.g. coast through & use the system] but there are many who a learn Torah with full if not more intensity than any worker or entrepreneur [I would be happy to pay taxes or give tzeduka for such people].

    So while yes, education is important & helpful – its not the golden rule or the rule to get gold.

  47. OK – addressing this thread’s core questions from the Israeli perspective:

    1) What are frum people earning on average?
    – – – – – – – – – – – – – – –
    As in the US, there is a large gap between the uneducated “yeshivish” world and the “Modern Orthodox” world.

    I know both knitted-kippah and black-hat immigrants from America, Canada, England, South Africa, and Australia. Those who come with a college education or other credential generally have no problem finding work – in computers or other hi-tech, education, medicine, or other fields.

    Those who don’t work, live in relative poverty. That is how G-d made this world, there is no “fix” other than going out to work!

    2) How do religious Israelis prepare for major milestones? Can they save?
    3) How to they make it through the major milestones?
    – – – – – – – – – – –
    (It would be interesting to ask if retirement were considered a major frum milestone, but…)

    Here in Israel:

    a) most major milestones are still much less fancy/costly than in the States.

    And in many circles there is strong and effective pressure both from Rabbonim and peers to keep things simple (for example, making a simpler affair has become a trend among many young Religious Zionist couples).

    b) Most frum people (who are working!) can save for simchas because tuition for Jewish education costs less, as do payments for other communal obligations.

    You could put it this way: American frum Jews pay local taxes but do not get that money back. They are effectively paying twice, for 2 school systems – public and private. Religious Israelis see their taxes applied to their own children’s education.

    c) Many religious Israelis have a strong savings ethic. This was briefly eclipsed during the years of runaway inflation – and yes, there is truth to the cliche of the Israeli with a huge overdraft – but many Israelis are still just 1-2 generations removed from their immigrant parents, and saving is part of the family culture. Also the culture of helping kids with the down payment on their home leads many Israelis to invest small but steady amounts of money.

    Even Israelis running an overdraft will sock away monthly sums that add up over time. Most salaried workers have automatic monthly deductions paid into a “keren hishtalmut” – originally a mutual fund intended to provide money for a teacher’s sabbatical, but now used by everyone for savings. Usually there is a co-payment by the employer as well. These accounts can only be opened 7 years after you start paying in – so often one spouse (or a grandparent) has one of these funds maturing when Bar/Bat Mitzvahs start coming up.

    It may not make sense on paper to pay high interest on an overdraft while earning low interest on a mutual fund – but that’s how people live here. And in the end you have the invested money – which is deposited before you can spend it.

    c) There is a wide choice of new, inexpensive frum communities that young religious people can buy into. Because Israelis are not as mobile as Americans, they tend to stay in those communities long enough to see their investment appreciate in value.

  48. The financial realities are: debt debt debt and more debt. Everyone is in denial. The engine that drove finances the past 10 years was the booming housing market in frum communities. OK now what?

    As for community responsibility – forget about the Federation – they are more worried about Darfur than Jewish education. And now that the latest Frum Ponzi scheme has gotten busted ($250M!!!) judgment day is several steps closer for Jewish Day Schools.

    And to Anon1 – I have the same age spread of children but I am 6 years down the road (17, 15, 13, 10) and guess what – 63K! So how much income does that take at a dual income tax bracket? Over 90K.

    So where is this going? PUBLIC SCHOOL. At what point does some Rabbi stand up and declare it is now Kosher?

  49. I wish I knew of a solution – I don’t. But I believe that knowledge is power. It’s great that people are raising these issues, and I hope there will be more and more discussion of them in the frum blogosphere. However, I can tell you that in many New York metro Modern Orthodox communities, it is considered a weakness to even imply that you can’t afford the whole shebang – a big house, multiple kids in yeshiva, summer camp, etc. Not to mention buying an old little dinky house for $500,000, and putting in another $200,000 in renovations. Some of the renovated homes are disgustingly ostentatious, and because of this attitude in the community that you are a loser if you can’t afford to do this, everyone has to keep up. This force of keeping up with the Schwartzes or whoever is extremely powerful, and the only way it will stop is when there are too many people in too much financial trouble. Unfortunately, many people fund much of their social climbing with debt. Where is this going to leave them and their children in 20 years? It’s this attitude that has to change.

  50. B”H

    As a content check – although every single one of these responses have been enlightening and valuable – there is a disproportion of “tuition” thread vs. the original request to provide insights to these questions:

    1. How much are the majority of frum people earning on average? [Give a range or less than 70K, 100K, 200K or 300K]
    2. How are they preparing for the major frum milestones? [are you able to save and what percentage of your income goes to savings, what are you saving for?]
    3. How are they making it through the major frum milestones?
    [does the savings help? How much? How much have you have to rely on EOC or chesed or have you chosen to go into debt?]

    I met a friend who sold his house of 20 years & now he and his wife live in a rental. Even sadder – it only helped to marry off 3 or 4 of his kids – and there is more to go & his income as is will not allow them to save for another house….

  51. The “ffb” mesorah for “making it” as told to me many years ago by a young ffb kollel wife. Parents throw large wedding which brings in “x” amount of money in presents (the amount quoted to me as “average” 10 years ago was $40K). This money is then invested, leading to a tidy “nest egg” that can be counted on to supplement the lifestyle until such a time that they have more income. Sorry I don’t have a better answer for us BT’s!

  52. I’m sorry – “only” $30K a month even WITH rent, loans (and no children or tuition!)sounds far from “middle class”. That is nearly the average yearly income for a family of 4 ($45K). Something doesn’t add up.

  53. First of all, I am a bit embarassed. I considererd myself a webmaven, yet today I have stumbled all these blogs and I find myself opened to a whole new world.

    I am married with two children and I will be entering the world of tuition soon. It is freightening as I work hard to make ends meet. I have been married for almost five years and my wife and I scrape together what we can and we save and save and save. We were fortunate to buy a house with our efforts (obviously all coming from the Ribono Shel Olam, whom i thank every day for all lf my blessings, those which I am aware of and those which I am not aware of).

    I am an accountant and as someone who crunches numbers for a living, I see how many frum people are not aware of their finances, especially at a young age (dating and right after marriage) and make decisions which hurt them in the long run. I have tried to talk to Rabbanim and leaders to try to educate people, but it seems to be taboo to talk about those things especially in the yeshiva world.

    Now before you roll your eyes, I consider myself a yeshiva guy and I have a rebbi (who agrees with me on this point) who I use as my guide for life decisions. I dont know why there isnt any education for young people on the matter of finances, budgets, saving etc etc. Instead, everyone waits till the tuition crisis comes alond and wails and wail. I dont belittle the issue, I think though a proactive approach at the beginning is necessary.

    I am sorry this post is long winded, this is my first time “blogging”.

  54. To have community-funded schools, the community has to exist as an organized kehilla funded by kehilla members. This model is rare in the US except among Chassidim. If anything, our communities are fragmenting.

  55. B”H

    Public schools?! Help me understand how a person would consider public schools given the risk & exposure they would be subjecting their children to?

  56. Public schools strongly push a variety of fashionable PC views at odds with Judaism. Tutoring won’t undo the damage that does.

  57. Having “Free” schools does not mean that its free to run the schools, just that the money is coming from somewhere else.

    I expect the Public school + tutor model will pick up over the next few years as people start running out of resources.

  58. Hello Ben-David,
    You have a good point. Unfortunately, the places in EY with the most American’s also have the most gashmius pressure.

  59. B”H

    Ben-David Part 2 – when I lived in Postville – I knew of familes who came to America:
    1 – to get out of debt by earning American dollars to pay against Israel debt
    2 – to work to save for their children’s chassona’s and the down payment for the apartment as part of the dowry for the Chasson – seems Israeli they have their own frum finance issues.

  60. Michoel-Haalevei indeed.

    Avraham-Moishe–You are referring to Yehoshua Ben Gamla of the second Temple times who founded a network of free schools. It seems that the nations eventually took that idea and ran with it. Wouldn’t it be nice to take back that page of the playbook? Unfortunately, the deeper the problems of tuition get the harder it will be to solve them.

  61. B”H

    Ben-David – you bring some good points. Although you touch on “Materialistic social pressure substantially reduced” – can you address the original 3 questions of this article from an “if you live in Isreal” point of view:

    1. How much are the majority of frum people earning on average?
    2. How are they preparing for the major frum milestones?
    3. How are they making it through the major frum milestones?

  62. Steve,
    “Akin to another mortgage?” Halevai my tuition was anywhere near my mortgage. One tuition is about the same as my mortgage.

  63. Move to Israel.

    1) Tuition costs substantially reduced.
    2) Materialistic social pressure substantially reduced (in most communities).
    3) Enhanced cultural/social environment and spiritual development for you and your children.

    I’m sorry – I can’t help but laugh when I read a post like:

    Someone young and energetic without too many other existing obligations should gather a group of 40 young families, each can scrape together $$50,000, and they can buy a huge peace of land in West Virginia or Upstate NY, build a basic shul and a mikvah, and simple multi-family houses, and live a simple idealistic life-style.
    – – – – – – – – –
    That basically describes almost everywhere in Israel – with the government kicking in to build your shul, school,and mikvah for you.

    Religious “seed groups” like you describe are settling everywhere from the Golan to the Negev. The government has already built a few suburban cities for “ultra” Orthodox – and seen them take off (Modi’in/Kiryat Sefer is the best know of these).

    So they – and hungry developers – are gearing up to build more.

    Don’t like the country? About a dozen more seed groups are renovating/gentrifying run-down urban neighborhoods, reaching out to “traditional but not religious” Israelis by revitalizing formerly religious schools and communities.

    And what about parnassah?
    Most English speakers with a college education or other professional training can find work in Israel with minor retraining/compromise.

    Why waste your time “pioneering” in Pennsylvania?

  64. B”H

    Orthonomics – 1)While it’s true that “The “mesora” we have today is a far deviation from [Chazal’s guidance'”, wasn’t there a time when chinuch was free? 2) Thank you – it gets better – my son was invited to a Bar-Mitzva breakfast, a simple bagels, lox & cream cheese “seudah. He told my wife – “Mommy – I’ve been to banquet hall bar-mitzvas, my bar-mitzva & this breakfast bar-mitzva was the best of them all – if I could do it over again – I would’ve chosen that”. :0). Guess what our 11 year old boy is going to be looking at for his bar-mitzvah? ;0).

    Judy – goto a Rav.

    Rich – thanks for explaining.

  65. I find the following situation difficult:

    1. Your income stays level but tuition increases and/or your children graduate BH to high school etc where tuitions are higher: You try to maintain frugal living but suddenly, you must either go into debt to pay tuition or go to school for help. There are no other non-fixed expenses to reduce.

    2. Plus – you never have gone to the school for help before, you know they are just making their budget and in general they are struggling too. .. In principle you want to make tuition your first priority (ie – not ask for help) ..

    You have more than one school to approach.. which do you go to? how do you decide?

  66. Why don’t we live a life of luxury? We don’t yet have a house or children so our total taxes are around 40% (fed and state). That leaves around $150k after taxes. We save about $10k a month for retirement, to buy a house, and general savings. That leaves about $30k for living expenses including rent, student loans, entertainment, and the like. Hence, not much luxury.

    Will we eventually have a life of luxury? Seems doubtful. Eventually 70k or more for tuition maybe my wife will take off from work, mortgage, etc.

  67. There is no doubt that tuition is akin to another mortgage for the vast majority of posters on this thread. When one defines tution, that means any cost associated with chinuch from K through Kollel.

  68. btw – B”H – we recently celebrated our 1rst bar-mitzva. We held it in the backyard of a friend’s house, we invited his class of 11 boys for the meal, my Eshes Chayil baked dessert and set them buffet style for the community to enjoy during the dancing and we had a basic kiddush at the shul ($600). So we spent more on the tefillin than the celebration.

    Mazal Tov! If this was the standard model we would solve much of the heartache regarding frum finances.

    I hope your example catches on. We aren’t up to Bar Mitzvah yet, but I hope like you the tallit and teffilin ends up being the biggest expense.

  69. Orthonomics – even if I had EOC – 1) I would’nt want to rely on it 2) how much could that help?

    I was just giving over information since you asked how people are coming up with the funds for all of this stuff. EOC is alive and well in the frum community. And, I can’t agree with you any more that it would be a terrible idea to rely on making ends meet with this money.

    I wonder if there is such a “mesora” for “frum finances”?

    We know that Yosef HaTzaddik led an entire nation in seven years of plenty knowing seven years of famine were coming. The Gemmora has plenty of formulas. The Ben Ish Hai has a work for women that speaks extensively about budgeting, guarding assets, and saving money (his formula, 50% of what you bring in). There are countless examples. The example of our sages seems to center around sechel, living within means, etc.

    The “mesora” we have today is a far deviation from that imo. One could easily write a weekly installment on upside down financial matters are today based on Dear Editor or Dear Columnist letters. ;)

  70. I’m not sure there is a good solution.

    Public schools work because they are able to amortize their costs across an entire community (including those without children), because they are able to take advantages of economies of scale, and because the family size in the community is distinctly below the norm in the Frum community.

    When you have multiple competing schools with duplicated effort, extremely large families, and a smaller funding pool to draw from, the numbers just may not work out.

    And if that’s the case, something is going to have to change. The money from previous generations is going to dry up, resources saved from previous generations are being spread more thinly, the shifts in the right wing of the frum community that are reducing income (specifically the greater number of men in full time learning, and the pressure against secular educations), all of these are converging.

    I’ll be honest, I think something is going to have to give. It may be family sizes, it may be Kollel and secular education, it may be community wide standards of living (i.e. social pressures on sumptuary restrictions), it may be family sizes, it may be private schooling. But I don’t see how the current situation is stable for more than (at most) the current generation.

  71. Also, for those who are convinced that there is a lot of injustice in the scholarship system in place in their community, perhaps they can volunteer for the tuition committee, or at least they can discuss the situation with them. Perhaps reform is called for. Or, perhaps there are a lot of variables they are aware of that are not publicized in order to preserve families’ privacy and dignity. If the situation is such that it is an entrenched system that overlooks flagrant abuses, the only choice would be: move to another school system, or accept it, or try to fight city hall and change it. The likelihood of option three succeeding for the BT seems small to me. Call me cynical.

  72. Dave, most/many tuition committees take spending habits and other life style factors into account when granting assistance.

    That doesn’t mean that the system is fair. But how exactly would we define fair? For instance, is asking families to go into debt fair, if that was the only way the yeshiva can meet their budget?

  73. I was once at a meeting of our school community hosted by the principal held to discuss the latest tuition increase. Fortunately the rabbi/principal is an individual who likes to involve his parent body and was basically laying out the budget obligations and fund raising ability, so as to explain to us why our tuition was going up. Amidst an audience of obviously very “interested” people, he said, (not quoting here) we are religious, in any community there are those who have more, and there are those who have less, and it is our obligation as a community to help out those who don’t have.

    I believe those of us paying full tuition should take some deep breaths, remember why we love yiddishkeit, and be happy to give to such a worthy cause, even if we are overpaying, and even if it is to subsidize someone else’s debt free life. In the end, we are obligated only that we ourselves do the right thing, and we are not supposed to look over our shoulder at our neighbors’ decisions. We should not envy them nor should we gossip about them (I say even in general). If a neighbor you know is on scholarship gets a new sheitel, and you want one too but can’t afford one, at least allow her the benefit of the doubt that she needed it for work (or something like that) and not begrudge that individual. I’m sure she has it harder than you!

    There is a tuition committee making decisions on how much each family gets in scholarship, and I suppose there is an extent to which they are willing to go to micromanage every family’s spending decisions. Practically speaking, some families will “get away” with cheating the system by spending beyond their means, but by and large, most scholarship recipients are grateful and reasonably responsible (even if they don’t make their own soymilk! :) )

    As for how people do it, it is my estimation that people need to make a minimum of $200K to be able to afford a decent life with four kids in school (we aspire to that!). My husband and I both work, he has a 401K savings plan to which we contribute the max every month; also, after starting off very financially naive, my husband learned how to invest with the help of friends, relatives, and self-education, and learned how to limit credit card costs, and this has helped us afford the “milestone” costs (not completely, but has helped). I recommend that young couples teach themselves investing principles as soon as possible, as side income seems to be the only way for salaried individuals to get over the hump.

  74. Let us take two families.

    Family one spends heavily early in life, buying luxury items or taking expensive vacations, and generally lives above their means thanks to credit.

    Family two lives frugally, living below their means, living in smaller, less luxurious housing, taking small or no vacations, not being luxury items.

    Both proceed to have four children, which they intend to place in Jewish schools.

    Since we’re making this hypothetical case, we’ll assume that both couples have had identical incomes.

    When it comes time to send them to school, family one, even if they adopt a frugal lifestyle after they have children, will receive school aid because their debt load reduces what they can afford to pay. If they don’t change their lifestyle (and assuming they are spending money in ways that the school approves of — trips to Israel, religious camp tuitions, etc), they have even less that they can afford to pay, so they are likely to get even more assistance.

    Family two, who don’t have that load of debt, are either looking at paying full tuition, or requiring less assistance. So they are spending the same amount of money as the first family (tuition versus reduced tuition + debt service) without having gotten the benefits of the first families profligate spending.

    What we have here is a classic moral hazard — people are being rewarded for acting irresponsibly.

  75. B”H

    Shortly after submitting this article, I spoke to someone from a large community and he related:
    – some couples are working as teachers in schools
    – they have low incomes so they qualify for gov’t programs
    – they use the programs & save their money
    – they may or may not have EOC
    – they may have bought a house while cheap – then sold when prices soared
    – they may or may not be renting a room or level or their house to someone
    – they use other chesed orgs.

    the whole conversation was depressing to me until he said “I may make more than avg [100k]but I believe that is because I spend more [scar limud]”.

    While that is refreshing – I still have a problem w/ paying high tuitions if I feel the system is corrupt | overcharging.

    What inspired this article is that my wife and I are “BT”, coming from standard not yet frum familes w/ 1.5 kids and 2 dogs – rasing a large frum family was a bit daunting to say the least. While we read frum & secular books on the topic – it wasn’t until my wifed learned from an “FFB” the “mesora” of rasing a large family with the “inside story” that we had a literal leaps in out quality of family life. I wonder if there is such a “mesora” for “frum finances”?

    btw – B”H – we recently celebrated our 1rst bar-mitzva. We held it in the backyard of a friend’s house, we invited his class of 11 boys for the meal, my Eshes Chayil baked dessert and set them buffet style for the community to enjoy during the dancing and we had a basic kiddush at the shul ($600). So we spent more on the tefillin than the celebration.

    KME – vacations – what’s that? convenience items – B”H|K”H – with a family of 9 its a non-issue.

    Michoel – parnossa would be an issue in such a simple life. I had such a simple life while living in Postville Iowa – yet after struggling to pay bills [bring an IT guy to the cornfields – read smart] for a few years – we moved back to the “big city”. So while our basic expenses are dbl – at least we are able to pay for them!

    Orthonomics – even if I had EOC – 1) I would’nt want to rely on it 2) how much could that help?

    Rich – still not understanding how you make 300k and not live in luxury, are angry & life isn’t fair – can you explain that? You may want to consider one of you being a FT parent and cutting back hours when you have kids – if you can’t invest in your kids – what good is all the money?

    Other random comments:

    While its true that everything comes from Hashem – that is a delicate argument. Just like you wouldn’t say “I’m going to play in traffic – if Hashem wants me to live – I’ll live”, so too you have to have some sort of approach to finances. While understanding that the success and blessing of our histadlus is only from Hashem yet effort we must [are commanded] to make.

  76. Dave, it’s a reasonable question whether one can have large families at the financial expense of somebody else, but I was trying to make a more direct comparison and not bringing larger halachic issues in to the equation. Part of the answer to your question would depend on how you halachically and hashkafically view any sort of family-size planning.

    Michoel stated “supporting schools is an obligation on the tzibbur”. But the reality is that few communities that I know of accept and enforce this supposed tzibbur obligation.

    Schools have a tremendously difficult time raising money and usually can only go to the parent body for the vast majority of funding. And the funding is based on usage (ie children being educated in the particular institution).

    My point was that I don’t think we can sing the praises of going debt free too loud, if that goal is achieved at the expense of others going into debt in the same circumstances. That seems pretty clear to me.

  77. “There is a Ribono Shel Olam. He gives parnassa and He gives reward for paying tuition.”

    Yes, I would essentially be giving tzedaka to subsidize others’ yeshiva tuition. But, would this be necessary if people saved more and spent less? Can you imagine a notice in the mail or some coming to your door collecting tezedaka saying “Please do a mitzvah and help. We went on a vacation this year, bought a big screen TV, and have digital cable and now we can’t afford yeshiva tuition.”?

    This is essentially what is happening in our communities. Maybe those purchases didn’t happen in the same year as tutition needed to be paid, but surely they knew their income was low. Surely they knew tuition needed to be paid sometime in the future. Surely they knew if they saved that money it would be easier to pay tuition or a mortgage in the future. And yet…

  78. Rich?,
    “Which again angers me, because we’re saving, they’re spending and we’ll be asked to subsidize them.”

    There is a Ribono Shel Olam. He gives parnassa and He gives reward for paying tuition.

    To the superficial appearance, wealthy people living ostentatiously is far more common in the frum world than wealthy people living very modestly. So you are an exceptional individual!

  79. Rich, you just better hope Obama isn’t elected. Actually, we all better hope that, but that’s OT.

    But seriously, 300K and you’re not living in luxury? And your neighbors are making under 100K, which would seem to indicate to me that you didn’t pay 1.5mil for your home. I don’t know, something doesn’t calculate. But please realize that the future of your children that I”H you’ll have someday, while not “guaranteed”, is much better assured by a yeshiva ed. Just because your own may have left something to be desired, it may have not been one sided as to why you didn’t gain more from it. As someone with kids approaching their 20’s, it is quite clear that the “yeshiva ketana” portion of their education (ie, K-8) was just a warm-up. The real gist of their yeshiva ed came in both high school and now post-HS.

    SephardiLady, check your email – I sent you something today about college tuitions.

  80. My wife and I are in the top 10% and make nearly $300K a year, thank God. We’re married under 3 years and don’t have children yet.

    I think something you’re forgetting in terms of salary is how soon you start making the “big bucks”. That high salary wouldn’t help much if I went through 10 years of borrowing against my house and taking out other loans and debt. For example, my parents now make good salaries, but didn’t when we were in yeshiva and are still paying off their house and related debt from yeshiva tuition.

    Not to complain, but my wife and I have discussed several times the idea of not sending our kids to yeshiva and perhaps getting a rabbi as a tutor. I’m not terribly happy with the yeshiva tuition I received (never was taught Hebrew as a language and can’t remember a single d’var torah I was taught). At current rates near me for 4 kids (which we hope to have, please God) we’d be paying around $60K-70K if all 4 kids were in school. And we don’t have kids yet! What will it cost when we do!?

    What kills us is that we work very, very, very hard and long hours for our salary and by any objective measure should be absolutely living it up. And yet, we scrimp and save every penny and don’t live a life of luxury by any stretch of the imagination. And we know if we do send our kids to yeshiva we’ll basically be subsidizing other children whose parents don’t have good incomes.

    We would love it if my wife could take time away from work when we have kids, but we don’t know if it will be possible. There’s only so much we’re willing to sacrifice and we need to have something (like a nice house, for example) to make all our hard work worthwhile. I don’t see why we should be killing ourselves, earning in the top maybe 5% of the country and have to live like lower middle class – it just doesn’t seem fair.

    Maybe this will all seem like whining to everyone else. I don’t mean it that way. It’s more to point out the unfairness of the system which hurts people at all levels unless they’re willing to make serious sacrifices.

    In terms of how much others around us make, people in our age group on our community seem to have total incomes in the $50K-$80K range with both spouses working, some make less because a spouse is in school or stays home with a child. Many receive support from parents or at the very least various sizable gifts from parents. How will these families get by, especially since most are not able to save, I have no idea.

  81. Mark-You make an interesting comment on those who are debt-free. I assume your comment stems from the belief they are debt-free because they are receiving tuition discounts others are not receiving. I don’t want to get into a debate about how just or unjust the scholarship system is.

    But I do want to point out that long term financial stability is created when people remain debt-free and live below their means. I’d say those living above their means are a bigger stress on the entire klal than those living debt-free. . . . or at least that is what my mailbox, which is constantly being filled with letters asking me to get ploni out of debt, is telling me.

  82. Mark,

    I hear you and totally agree. As our school president recently wrote in a letter to the parents, he recognizes that for many, tuition is the largest single monthly payment that the family has. Clearly true for me. I’d be as happy as anyone for a magical solution to this issue, but in the meantime, BH we have the money to spend and spend it on the chinuch of our children.

  83. You answered your own question with how people are accomplishing all of this (credit cards HELOC, tzedakah), but left out a major factor and major “tzedakah”: Economic Outpatient Care (EOC). In other words, parents are providing a lot (and by that I mean A LOT of “support”). This support is not being invested in the future (funding education savings accounts, start up businesses, etc). It is being poured into the present rapidly; read lavish weddings, camps, sheitels, cars, etc in additon to tuition, the big white elephant in the room. EOC is a trend I’m reading about currently and it is a trend that promotes hyperconsumerism.

    I can’t really answer your questions except to say that income generated varies by community and family, but that a very real issue is that the “minimal” level of spending seems to remain artificially high across the board.

    One of the reasons that we don’t see change, despite the fact that we see financial futures eroding before our eyes is in no small part due to tremendous pressure to conform.

    Much of the solution lies in bucking the trends and pressure and doing what needs to be done because your bottom line depends on it.

    One thing about your post is that you are looking at “major frum milestones.” This is part of the issue. People are saving for weddings over vocational training/higher education. People are saving for bar mitzvahs over retirement.

    Enough for now.

  84. Anon1,

    I purposely chose low numbers to show that it is really the tuitions that are the major contribution to our financial mess and not exorbitant spending habits.

    The other point is that those who are debt-free are possibly accomplishing it on the backs of those of us who want to pay as much of our fair share as possible.

  85. Just wondering how common is our experience (all 4 kids) that the school adds to the tuition by demanding extra daily tutors, shadows, etc.? That can add up to more than half another tuition per kid!!!! But it is a way to offer extra parnassa to unemployed people in the community.

  86. BH, no special ed costs. In Philly. BH, paying in full. Includes building fund and some other stuff, but base tuition would have put me over $40,000 in any event(and actually there is a pretty good multiple child discount). Also, does not include other fundraising which community members are expected to participate in and is vital for the school’s existence.

  87. anon1,
    Do you have special ed costs? $44,000 is very high. In Baltimore, which is not known as a low-tuition town, your 4 tuitions would be around $26,000 if you paid full.

  88. Mark,

    I’m out of town and with 4 kids in school (ages 11, 9, 7 and 4), my tuition was about $44,000. I think some of your other numbers are low as well. To the question of the post, I’m still looking for the answer. BH, we are ok but wondering about how things will be funded down the line. Hakol bidei Shamayaim

  89. KME, how much are you required to pay for tuition? How much do you receive in scholarship/assistance?

  90. The biggest factor is by far school costs. Let’s work out a rough low out-of-town budget estimate for yearly expenses for a family of 2 adults and 4 children.

    Rent/Mortgage – $24,000
    Food/Clothing – $18,000
    Utilities/Phone – $4,000
    Other – $4,000
    Tuition – $25,000

    So in this hypothetical out-of-town $75,000 budget, $25,000 goes to Tuition.

    The only way to meet these expenses on 100K income or less, without going into debt, is with tuition scholarships, which increases the financial burden of those who do not choose to go for scholarships.

  91. KME,
    Kol Hakavod! That is really what we need, a return to basics. However, in most frum communities, even living with extreme modesty will be very difficult with 6 children. And many baalos t’shuvah simply cannot handle doing away with conveniences either emotionally or physically, while mothering 6 kids.

    I have felt for a long time that we need to found new communities with shared resources and firm communal spending controls in place from the bottom up. In effect Kiryas Yoel and Square work like this, to a degree. Someone young and energetic without too many other existing obligations should gather a group of 40 young families, each can scrape together $$50,000, and they can buy a huge peace of land in West Virginia or Upstate NY, build a basic shul and a mikvah, and simple multi-family houses, and live a simple idealistic life-style. Of course, parnassa going forward will have to be figured out.

  92. It utterly baffles me that economic behaviors are as they are in the frum community. We have a modest one-person income for our family of 6 (nowhere near $100K!), and live a very simple (and extremely satisfying) lifestyle. For bar/bat mitzvah celebrations we’ll have a nice kiddush at shul and call it good. Pesach hotel? Not in our vocabulary. Lots of convenience items from the grocery store? None. We make all of our own everything – soy milk, baked goods, ice cream, jams. Grains we buy in bulk. All we need is a cow, a tilapia tank, and a few lambs and we’d really be in business! :) I refuse to give in to the “keeping up with the Finkelsteins” mentality. We will remain happily debt-free and stress-free and pass those same values down to our children. When I look around me, things have gotten ridiculously out of control. I have no idea how people do it without being in terrible debt. And to what end?

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