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A Woman outside bklyn:
I agree that most families seem to manage through help from relatives, alive or otherwise. You’re not the only ones on your own, though.
No, we didn’t install water-saving things. Whom do I call, the water biller?
Google “water saving shower heads”
I’d like to ask you since you sound like a responsible parent: which do you think is generally the preferable option (ie what Hashem wants)- for a mother to work full-time and stash away some money, or for a mother to work part-time (sending children off in the morning, greeting them after school, holding baby more) and no extra money for stashing?
The preferable option is not necessarily the best option, but that’s how it is in life. B”H when we lived in the states my wife was able to work 3 1/2 days a week, and the entire family left together in the morning and we all came back together in the evening. Ask yourself this – if an emergency comes up, G-d forbid, is it fair to place a strain on the entire family? Money problems may be an “adult” problem, but any major problem places a strain on the entire family, including the kids.
What happens if the mechanic says “it’s dangerous to drive this car until the brakes get fixed.” Do you tell him you don’t have the money, and drive the car anyway?
Practically, does it make sense to invest money while in debt (student loans, mortgage)? You usually pay a higher interest rate on loans than you earn on savings.
I’m not talking about investing money, I’m talking about putting it aside in an emergency fund – just a regular savings account. Even a small amount helps, like $20 or $30 a week. This is an investment in having it available for whatever life throws at you. Think of it as tzedaka for yourself, for piece of mind.
It seems to me that we should only put away money if it doesn’t interfere with our present obligations.
The problem with this is that when one lives a yeshivish lifestyle, there are always “present obligations.” Tuition turns into weddings, weddings turn into supporting kids in kollel.
I don’t intend to sound harsh; as you said, I try to be a responsible parent and husband. Maybe I picked up some of this thinking from my dad, who was raised during the depression in the 1930s. I can remember as a kid in the 60s and 70s watching him bring home his cashed paycheck every two weeks, and putting the money into envelopes for certain things – gas and auto, insurance, savings, medical, etc. He always told me to make sure I had some funds put away for emergencies, and he was right.
Thanks, gavra.
First, I think Tomim is a tzadeikes and the most reasonable person I have ever met who is happy with what she has and is comfortable with her priorities. For those of you asking about whether she is spending a few extra dollars because of a water bill, STOP.
The original question that started this was – as a practical matter, how do people make it. Tomim was gracious enough to provide a budget which was very detailed. Leave her alone and Tomim- don’t be defensive. If anyone has a comment, please contribute so people can have an idea what the average flatbush (or wherever) family is really looking at. Noone is asking for your critique on others
To tell the truth, I would have a hard time spending 250/weekly on food including chol/shobbas/laundry detergent/soap/shampoo, etc. Additionally, (call me spoiled) I could not live without a car. Aside from shopping and getting around, kids have different schedules and there is no bus every other month for some legal holidays or another. There wouldn’t even be time to run around on a citibus (and taking an infant in the snow, etc).
Keeping that in mind, Tomim’s budget if you had 3 ror 4 kids and paid more taxes is at least 150 gross per year (first of all- noone in todays market has close to a 1,700 mortgage unless they had a lot of cash or someone gave them a huge downpaymnet. A 400k mortgage at about 5% is still in the 2700 range. Also add a car/gas/ins (maybe not a necessity, but certainly not a luxury in todays day and age), a bit for food and 3,000 for clothes etc is also very reasonable if you have to add in shobbas clothes and clothing and shoes for growing children and maybe even buy a new shitel once every 5 years. Not mention shuls and schools who want you to come to their dinner, a sibling in lakewood who wants your ma’aser (which is not provided for in the budget, but then again, if you are living on that budget, you are either no chayav in ma’aser or are using it for tuition – [please don’t start a thread on whether that is ok – you do not have to go into debt for ma’aser and tomim’s money is accounted for]
Therefore, if anyone else (especially those who seem to be judgement car to share bit) – how people make it on less – especially those who seem to say they make it on less than 80 net and that eveyone making 6 figures is pointlessly complaining.
Lets be honest – are you really living on any less than that budget? If so – where? (or is it just a don’t pay taxes, get benefits, don’t pay tuition issue). Is everyone who makes a w2 salary just in the same place as had they not been “responsible” gone to school and trying to work.
By the tomim – you should stay home and be with your kids. By the time you are done with day care expenses which will likely be off the books, you will work and not make much more than that anyway.
I removed the shower head thingy, because I didn’t find it saved us much water, but it definitely minimized the pleasure of my shower. Just spend less time in the shower – maybe sing one song instead of two, and you’ll save. Run dishwashers when they’re full. Check nyc.gov/dep for more tips. And log into your AMR account to see exactly when you’re using more water.
squeak: Thank you for your input! (I was hoping you’d join here.)
Yes, I’d love to hear your detailed advice later. TIA.
What about using home equity for emergency cash? Our mortgage payments are a form of savings. I know it’s far from ideal to take a second mortgage, but is it very unwise to even entertain the notion that if we need a large unexpected sum, we will turn there?
I hit send on that last post by accident; totally did not mean that mortgage payments are a form of savings. I edited later when I came back to the computer, but I missed the window.
Please don’t bash me for my last post.
Let me rephrase:
Mortgage payments are NOT savings.
Savings means there is no repayment; savings is not a loan.
It is foolish to go into debt if you can just use savings.
Should putting aside paltry sums regularly be a top priority by us?
I am sure by the time this goes up I will have been bashed already. I’ll survive.
” covered in my above budget. “
Then, I would say, you fall in the category of “doing ok”. If nothing else, you can at least see the bigger picture, and that, in many cases, if 1/2 the battle.
mamash: Thank you for replying.
Actually, when the mechanic told me that it’s dangerous to drive the car without fixing it, I sold the car. We are enjoying being car-less.
$20/week is about $1,000/year, and our budget is already pretty tight. So, my question is whether it’s absolutely necessary to squeeze this in. I’m thinking the answer is yes.
I didn’t express myself clearly when I mentioned “present obligations”. I referred to familial, not financial, obligations. Certainly, there will always be many financial obligations (although in due time, they will replace tuition.)
You mentioned that financial stress in the home affects the children, but a mother who works full-time and is thus largely unavailable to her children, both physically and emotionally, also causes stress to her children.
When I will need to use the savings, I will try to come back here and thank you (and your father:)
username7: Thank you for the compliment!
To be fair, gavra was trying to help me figure out how to buy life insurance, a crucial expense. And anyone who has money-saving tips is welcome to offer; you and I stand to possibly benefit.
I’d like to respond to the rest of your post, but I’m short on time now and I’ll try to return later.
TT: You’re welcome.
For those of you asking about whether she is spending a few extra dollars because of a water bill, STOP.
I don’t see anyone doing that. Suggestions on how to squeeze out a few extra bucks are always needed.
BTW, mortgage payments ARE a form of savings, but only for the very long term, like a a 401K, and more volatile.
As far as the question, IMHO, it depends on how much cash (as in green pictures of dead presidents & Mr. you can access when needed. Do you have a HELOC? Access to a Gemach? Open Credit? Any of these things make having reserve cash for a crisis less of a requirement, as you can “raise” cash easily via debit.
Term Life Insurance is dirt cheap. Something like $200/year for $500K or $400/year for $1 Mil.
When I will need to use the savings, I will try to come back here and thank you (and your father:)
My bracha to you is that you should never have to use money you set aside for emergencies in an actual emergency. (Then you can use it for other things.) But it’s good to know in the back of your mind that it will be there if you need.
tomim tihye (first comment)
I love the way you quote scripture as you recommend that people work off the books and violate both halacha and the law of the land. Is this the “Jewish” way of affording our lifestyle?
tomim, I can’t really offer much in the way of finding where you could make cuts. But I can weigh in on the pay down loan vs. build up emergency cash question.
Assuming complete absence of anyone who can bail you out in emergency, I believe that you should have money saved for rainy days. Hopefully you will never need to use it. But if you ever did, it would mean things are already less than ideal, so why would you want to start taking out loans at that point? Gemachim, HELOCs, cash advances, can be pretty quick ways to rise cash in an emergency but might also not be available when you need them. So that’s two reasons not to think of borrowing as your emergency fund.
As far as the fact that interest earned on the savings is less than what you would have saved on loan interest, I think you should just accept that as a capital cost. But by all means, pay down your debt as soon as you are able (possibly excluding mortgage), but after you have a cash fund.
And again, I would caution you to not rely on Areivim instead of buying your own life insurance. Areivim could go up in smoke at any time, and the most important thing in choosing an insurer is that they will be there forever. Insurance companies are unlikely to vanish or go bankrupt, and even if they do the state has a guarantee fund. Areivim offers no guarantees.
Although someone had posted earlier that this might not be such a great thread, I think it’s fantastic for 2 reasons. 1)Those of us that struggle to get by could possibly glean some good advice on how to stretch a dollar. 2) I think that a frank discussion on the costs of being frum and what can be done about it is long past due.
Some background… Bought a house “out of town”. While the price was cheap, the taxes are not! Combined income: $165,000, 2 used cars, nothing newer than a 2003. 4 kids. Both parents working, spouse is part time, I took on an additional part time job. All kids in yeshiva. Small retirement IRA with no contributions since 2000. Kids go to day camp only. Last tuition bill: $36,000. Maybe we will get some of that knocked down.
Recently while doing our taxes we decided to see what our monthlys were. We barely break even. We have not been able to squirrel away a single dime. In one hand and out the other. Now, I don’t mind working like a dog. I would do anything for my family. But doesn’t it strike you as tragic that it takes so much to be a frum Jew? Is there nothing that can be done about this? The scapegoat is always the “yeshiva”. As if the teachers don’t need a living wage too.
Well, as a result of the above we have learned to stretch our dollars as far as we can. Sometimes its by smart buying, sometimes its by smart saving.
Smart buy: powdered laundry detergent.
Smart save: Juices are cut with water (the kids don’t notice).
Smart buy: frozen pizza.
Smart save: All shabbos food is home made.
Yet even with all the saving and cost cutting, we still just break even. I can’t figure it out. My colleagues at work wonder why they are driving the latest cars and trucks and I come to work in a 1998 Hyundai.
Then I see Boro Park (Ir HaKodesh) and I am dumbfounded as to how they do it. Did someone not tell me the tricks of the trade? I didn’t get my fat bankbook when I came of age.
gavra: That is my question: should we open a HELOC instead of trying to put aside $20/week (when we’re just making it)?
HELOC advantages over savings:
1) no additional strain on budget
2) lots more cash available than the small amount that would be in savings.
Savings advantage:
The money is yours for the taking- no repayment.
Conclusion:
We should try to save $20/week as hishtadlus. Should it be decreed that we’ll suddenly need lots of cash, Hashem will determine whether it will come from HELOC or some other means.
mamash: Amen!
mythoughts: What a pity that my comment could possibly be construed as a “recommendation”; I simply stated (what I believe is) a fact. I am sorry for that misinterpretation.
Would you mind re-reading that comment to see if it could be understood another way- the way I intended it? I certainly would not promote working off the books.
Kindly let me know if it requires clarification. Thank you.
Since I’m in civil service, I was able to join a deferred’s compensation program. It’s pretty much the same idea as a 401K, except the city doesn’t make contributions. However, the fact that the money comes out of my paycheck before I get my hands on it is a tremendous benefit! When I first started working for the city, we lived in a fairly low rent apartment and weren’t paying tuitions yet, so I took the max allowed, 25% of my salary per paycheck. When we bought a house, and the kids started yeshivas, I lowered it to 7.5%. But even so, that will hopefully be a decent nestegg. Otherwise, believe me, we wouldn’t save $5 a week, we basically live from paycheck to paycheck. But B”H, we do have those paychecks.
It seems to me like this post ran a tad bit off topic.
I believe the average income of a frum family in Flatbush with 3-5 kids needs to be 150 before tax in order to live. With nothing fancy.
I am sure many are not making that and are able to compensate in other ways ie Gov’t programs, carefully planning the budget and possible help from relatives.
I do not know how the current lifestyle is sustainable and I wish everyone much Hatzlacha and we should all continue to daven for a yeshua.
The following is based on a freinds budget I recently reviewed to give him some ideas (mostly a shoulder and a ear to hear him out)
This is a basic with out all categories monthly budget:
Mortgage 3200
Tutiton 2000 during summer it goes towards day camp in the city
Food 1500
Phones 100
Electric 150 level payment plan
gas 300
clng lady 320 wife works and needs the extra help
car ins. 350 2 cars both needed for work purposes
car paymnt389 Car lease, 1998 van broke down and needed to be replaced and did not have money to spend on buying used highway worthy van
Medical 250 co-pays and dental work average
Clothing 400 including shoes
Car gas 150
tolls 50
gifts 50 birthday/bar mitzvah/wedding on average
9209 x 12 = 110,508 which is very close to the net income off a 150k gross income
I did no include shul membership, or things like $35/month for the Gardner or water bill. It is a rough idea and is incomplete.
Hatzlacha!!
Me 2:
That sounds relatively reasonably. I am sure people can nitpick, but there are also a lot of unexpected expenses that could take care of any discrepency.
From all of these posts it does not appear that on budgets of 125-150 in taxable income there is much room to cut or save; and they are certainly not what anyone would consider luxurious.
Ultimately, it appears that those making in the 70-85 range who don’t pay much in taxes (let alone that many seem to have off the books arrangements for at leaset partial income) and have programs, end up in the same ballpark as the 125-140 range (who pay between 1/3-1/4 of total salary) taxes and have to contribute to health insurance etc. and may even have 200-500 in student debt to contend with.
Do people in the lower range realize this? What about yeshiva tuition boards? Any comment?
Is there any resentment by those in the 125 -150 range that those in the 70 – 85 range are effectively in the same financial/class as themselves? There shouldn’t be any such resentment. They should be happy that the lower income folks are able to live on the same standards as themselves. Is one class entitled to a better financial state than another class?
2 part answer:
First, I do think that there is at least a tinge of irony that my wife any I both work full time and essentially end up very close to where we would be with 1/3 less income because of programs. The reason that we made certain choices was specifically to try and take responsbility.
NOTE: I think it is wonderful that Hashem provides so that everyone can get by,
However, for people coming into adulthood today and planning for the future, I think there needs to be an awareness of what a moderate lifestyle actually costs wihtout puttings oneself wehre they will rely on programs l’chatchila just because they can. You may answer that “why shouldn’t they because it is out there anyway” – perhaps that is a discussion for a different thread, but certainly does not fit under the focus of topic of this thread.
Second, I actually find a bit of the opposite. I find that, certainly with tuition, people who make a w2 are in a way “punished”. When I told someone who I know that I had a problem with my expenses, he told in kind of a resentful way to “stop complaining” and he didn’t care about “any fancy math” and that a million people would rather make the kind of money i make and that i didn’t deserve a tuition break, etc. I was actually taken aback because despite that his delcared income is substantially lower, his net is very close (especially when including parental support, etc, which adds up – even for little things likes car a car payment, yom tov expenses or children’s clothing – easily about 4,000-7,000 per year (which is essentially 7,000-10,000 salary dollars).
To be fair, i don’t think that anyone should look at anyone else and that if there was a greater degree of community responsibility a lot of people would have an easier, time – but that too is a conversation for another post.
Is there any resentment by those in the 125 -150 range that those in the 70 – 85 range are effectively in the same financial/class as themselves?
Echad HaMarbe, V’Echad Ha’Maamit, U’Bilvad She’Yichaven Libo L’Shomayim.
There certainly is resentment towards those who are not “Yichaven Libo” and cheat around the system. But someone who tries their hardest and still needs the help? I haven’t seen it. Hashem gives, and if He decides to give more or less, it is the same.
Not even close to 150 is average.
I really appreciate all posts on this thread. Some cost-cutting tips:
1. Cut the juice. It’s an occasional treat. Milk or water, only.
2. Breakfast for supper (pancakes, scrambled eggs, etc.) once a week. Less leftovers, less angst, less expensive.
3. Bread instead of breakfast cereal.
4. Drop in only (e.g. Chuppah/Simchas Chosson v’Kallah) for most social obligations. No present required, can switch off with spouse to cut babysitting expenses.
5. Pay the kids to help with chores and cut down on the cleaning help. You gain multiple times: they have their own money to spend on extras you’d rather not, you save the difference from the cleaning help, you raise children who appreciate the work it takes to maintain a home and hopefully they grow up more ready for marriage.
squeak: Thank you very much for the words of wisdom!
Shefa Brocha V’hatzlocha to all!
yvw.
BTW, most financial advice needs to be personalized, i.e. the more personal details you can share the more suitable the advice. What may be wasteful in some circumstances is not wasteful in others. As a result, this is not the best place to get personal advice…
Thanks, squeak, I am aware.
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