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Monday, February 04, 2008

Our Finances: Welcome to the 21st Century

In my first post in the developing "Our Finances" series, I used two threads on the Imamother Chat Board as a starting points. My written piece, in which I stated the necessity of both spouses being aware of the basic details of their household's finances, was posted on the Imamother chat board by a participant. Soon a participant asked exactly made my opinion profesional and why I needed to denigrate the traditional approach. It is actually rather humorous that my opinion was questioned for its professionality since the beginning of my written piece points to professional experience and since many of the women on the site seem to have no problem asking and receiving advice (much of it ranging from bad to terrible advice) from lay people on matters like investing in rental properties, buying life insurance, or selling a home to get out of debt.

Unfortunately, when I address the dangers of not having a clue about household finances, I'm not just talking out my blog. What I write about is based on real life work experience, fielding questions, and reading a lot of personal finance articles. I don't normally feel the need to defend my every opinion and am open to other perspectives, but in this case I feel very strongly that in today's world, yesterday's method of household finances (i.e. keeping one person in the dark, normally the wife) when combined with the yetzer hara, or communication issues, is fraught with danger. I've seen the damage that can be done, I've read about the danger that has been done, and therefore I feel the need to use my soapbox to open up the discussion.

Imamother participant Motek seems to think shalom bayit can be improved when one spouse sees their way out of the finances if it is causing arguments (the idea that resignation is a sign of a healthy marriage deserves a whole post of its own) and she writes that tradition falls out on the side of letting the husband/provider take care of everything. Another poster writes there is no "wrong or right way. . . . as long as it keeps peace in the home."

Motek also brings "daas Torah," writing ". . . . .Rabbi Y. Zweig of Florida . . . said that his grandmother was given a weekly allowance by his grandfather and she knew nothing about his business. He gave her the allowance when things were going well for him and also when they were not, and she was none the wiser. She was a happy, secure woman. Her husband provided."

I am sure the "husband knows best" approach worked, at least somewhat, for Jews and non-Jews alike 50 years ago. I am NOT here to denigrate families (especially families of talmidei chachanim) who lived by this approach. But, I sure wouldn't recommend it today.

Times have changed drastically. Besides the fact that the workplace is flooded with working women, there have been other significant changes. Probably the biggest change in the world of finances is the liberal extension of credit. The availability and ease of getting and using credit was unheard of, even 25 years ago. Today, people can take money out of their homes using a HELOC with the push of a button at the ATM. Another change is mobility, especially virtual mobility. One doesn't even have to leave their home to shop as it can be done from the convience of their own computer with the click of the mouse. And what about gambling (which includes playing the stock market) without anyone ever knowing or seeing you? Another significant change is the proliferation of credit cards and the death of the Mom and Pop store. While credit is still extended at many kosher grocery stores, one need not approach a store owner/manager for a personal loan when they don't have the funds, .

Unfortunately, many spouses are "none the wiser." I hate to bring up the subject of fraud again, but we have many, many, many frum men sitting in jail today (soon to be joined by other, r"l) because they were involved in shady business deals, schemes, and other "victimless" crimes. While I'm convinced some of the wives were perfectly aware that their husband's were engaged in illegal acts and knew that their household could face disaster should the crimes be discovered, I am equally convinced that some wives were sideswiped when their husbands were arrested and convicted. Being "none the wiser" while their husband "provided" certainly doesn't lend credence to the saying "ignorance is bliss."

But, I hate being alarmist. So, let's take a step away from high profile cases and talk about things that could be happening to a person in your neighborhood. I just completed reading a book called Green with Envy: Why Keeping up with the Jonses is Keeping us in Debt, by Shira Boss. The book practically jumped off the library shelf into my bag and it was a worthwhile quick read. In one story, a husband who married right out of high school, but managed to climb up the ladder despite his humble background and lack of higher education end up living "behind the gates," surrounded by Joneses. The family started spending more than they ever spent on country club memberships, Disneyworld annual passes, matching clothing for the kids, high end vacations, cars, home improvements, cleaning help (the neighbors 'convinced' them it was a necessity even though they never knew anyone before with such help), and more. The wife always took care of the finances, and the husband didn't concern himself too much, that was until they cashed out his last stock options. He knew things couldn't be good, but "everyone else was managing" and his wife couldn't seem to give him any hard numbers (a common problem I will hopefully get around to addressing in a post soon). The wife, herself, never actually ran tallies and didn't know the debt totals. In the end, he had to order their credit reports online and had to smell the coffee as they had $100,000 in credit card debt alone, this in addition to the HELOC. A long story short, this high income family ended up bankrupting and can no longer live the way they used to. Here you have an all too common problem of too much credit and too little information in the hands of too few.

I have another friend who was also "none the wiser" about their financial foundation, until her divorce that is. They didn't argue about money. She had seen her way out. She knew her husband had debts, but didn't get involved. . . . until she had no choice. He had borrowed every penny of equity in the house and lost most of it in the stock market. She had made, what would have been a very nice decision to stay home and raise her baby, but nearly ended up facing financial ruin when she found out there was no money in their home and she had no real finances of her own. Baruch Hashem her family came through in a pinch and she is establishing a future for herself now. Divorce or no divorce, she would have been thrown out to the working world eventually because at some point the husband wouldn't have been able to provide.

More to come iy"h, next time on a more positive note I hope.

47 comments:

Abbi said...

Wait, does this "daas Torah" approach also apply to kollel families? That makes absolutely no sense. The husband doesn't work, yet he's in charge of the finances and the woman should still stay in the dark?

It sounds like the yeshivish world really doesn't know what it wants- you can't have it both ways- a traditional marriage where the husband knows best but the woman supports the family.

FWIW, I think that Imamother response was really a defense mechanism. I think deep down, most women know that you really can't run away from reality and that when you do, it only ends in disaster.

JS said...

I suppose thank God I don't know the answer to this question, but how does one get $100,000 in credit card debt? Don't credit cards have a limit of a few thousand? Don't the credit card companies lower your limit or cut you off if your debt exceeds a certain amount? It just seems like bad business to keep lending out money when the liklihood of ever getting that money back decreases with every new dollar of debt a person takes on.

Tamiri said...

js, I have not lived in the States for nearly 5 years and we have not earned there in this time period either, but it took me just seconds to apply and be approved for a credit card with $20K on it. That, in addition to all the other cards with $20K we have lying around (I wanted THAT card). It's easy to get credit. Very easy. Too easy.
In order to rack up debt: Make sure that your income only covers the basic basics, sometimes mortgage, sometimes not even that. Put your grocery bills on the CC, then add dining, clothing, vacations, sundries, tuition etc. I bet you can add up to $100K debt in less than two years (family with a few kids). Oh, and I didn't even being with the new car etc.

Yoni said...

I never understood how quick people are to rely on credit.

much bettet to do things the same way.

I mean, if you make x amount of dollars now, and will make 1.4x amount in lets say ten years, then it really doesn't make sense to borrow money in the here and now, because you have to pay that money back sometime, its just a matter of when, and if you can't afford it now, what are the chances of you affording it in the future?

the only time borrowing makes sense is if you are temporarily on the short end (ie expecting your income to increase dramaticaly soon, such as when laid off and paying for necessities) or when buying something such as a house which is at some point a necessity but would require a really long time to save up for, and simce you're still paying roughly the same amount over time, you just have the house sooner, it makes more sense.

but borrowing money for pure luxuries? its insane!

Esther said...

SephardiLady you've heard this story before...when we were getting married and I questioned the economics of our "plan" (which was husband learn un-paid in kollel, myself work at fairly low-paying job as I was new to the job market) - our rabbi told us that "everyone" makes it work somehow. He named some odd jobs he had done while in yeshiva, none of them really paying much, but then said we'd have to check with his wife for how they made ends meet because he really wasn't sure. The answer from her - both sets of parents supported them and she never told her husband. So not only does this leave one person clueless, but then that person ends up passing on poor life advice to the next young couple. Or at least, other people look at them and "they're doing fine so there must be a way" but really they are getting some kind of support that you don't know about, or they are just as much in debt as you are. But as SL always says, each family needs to take personal responsibility. Just because other people make a decision to act in a stupid way, doesn't mean you have to be pressured to be just as stupid.

ProfK said...

To say that only one member of a marriage should know what is going on financially is so shortsighted as to be truly frightening. To have "Daas Torah" say this is to remove the "daas" from anything that is said by that person. Fiscal responsibility requires that both a husband and a wife know everything about the finances.

Going into debt for luxuries is bad policy when the government does it and even worse policy when a married couple does it. We pay our credit card bills in full every month, carrying no balance, because the rule in our house is that we don't buy anything with the credit card that we don't have the cash to cover. If we can't afford it, we don't buy it, period.

Fiscal responsibility is gender neutral and applies to men and women equally. In today's world, and that's the one we are living in, lack of knowledge is deadly, literally.

Anonymous said...

How to get $100k in debt:

Lose your medical insurance and start having to pay out of pocket for prescription drugs.

Lose your income part-way through the year while you are still paying full tuition.

Refuse to let your home go into foreclosure so you pay your mortgage on CC advance.

Forget luxuries. Monthly living expenses are so exhorbitant IMHO, it is quite easy to get into large amounts of CC Debt even without the luxuries.

B"H we are working down from $75k of CC debt and now that income has been restored (and thanks to CCCS) it's going pretty fast.

BTW -- I am the wife and I handle all the finances. 50 years ago when the "traditional" model was more in force, women couldn't even GET credit cards in their own names. I remember my mother railing about it.

A said...

Unfortunately, many people don't have the luxury of spending only when they have the means to do so. Most people go into serious credit card debt because they've been faced with medical costs, loss of wages, etc. and have no other way to pay for their basic needs.

twinsmommy said...

Oh and here's a fun one....rack up the credit cards starting with $10,000 in very necessary knee surgery that insurance wouldn't cover and $8000 in back taxes owed because your parents sold stock in your name but you never saw the money and they sold it after you were no longer a minor, making it a felony (but you couldn't afford to sue). starting with that $18,000 you can get to $100 K in no time, here's how.

Pay almost your entire income out to student loan and credit card payments, so your utilities and groceries have to go on credit cards. Get so far behind that to pay the car payments you have to take cash advances from the credit cards.

And we don't even pay tuition yet. We're going through some financial counseling now, but we didn't even QUALIFY for CCCS's help----- they said our debt to income ratio was too high for us to consolidate with them.

Luxuries??? We don't know what a vacation is and we're driving cars that are 99 (paid off) and 2001($2000 left to go)

grr. thanks for letting me vent. :)

Anonymous said...

Twins, you are driving new cars!!!!
Without getting into specifics, someone with as much debt as you are quoting should not be making car payments, but you may have a reason for them, not judging your... judgement. Someone with that debt load should be driving a couple of early 90s models, at best.

anonymous mom said...

I don't understand. Did I miss something? No one mentioned that the husband might up and die. That happens, you know. Even the biggest Gadol and the most wonderful man in the world may end up dying before his time and would then leave a wife with pressures that she would not have had otherwise. That is a really old story and it happens all the time.

SephardiLady said...

Anon Mom-I think you missed the first post of the "Our Finances" series where my first example was work I did to help a wife whose husband died.

But, I plan to revisit this in the future because women, on average, outlive there husbands and therefore, women need be prepared and have a plan of their own. More later. :)

Ahavah said...

I do think women need to be at least equally involved in the finances with their husbands - for women who do actually run the home full time, I would argue we are better equipped to see what priorities should be than someone who is not involved in the day-to-day process.

As a disclaimer, though, I should mention that I pay all the bills and do all the budgeting and make most of the financial decisions at our house, though I don't work outside the home - but it's because my husband simply refuses. He hates balancing the checkbook with a passion, hates budgeting - didn't even pay the bills that piled up on those occasions when I was unavailable (childbirth, surgery, family emergencies involving travel, etc.).

I'm sure there are women out there who absolutely despise financial paperwork as much as my husband does - trying to force them to get interested, even for their own good, is likely not going to be effective. If I died tomorrow I am 100% positive my oldest daughter or son would be put in charge of the finances for him and my two youngest - there's no way my husband would do it voluntarily unless every person over 18 but him was dead.

I don't suggest this is a good attitude at all. Out here in adult land, we often have to do things we don't like to do. But many people have this attitude (hate or fear, I don't know which) and will not act against it unless they are literally forced. All good advice to these people falls on deaf ears. We simply have to work around it.

Tamiri said...

Quote: "I don't understand. Did I miss something? No one mentioned that the husband might up and die. That happens, you know. Even the biggest Gadol and the most wonderful man in the world may end up dying before his time and would then leave a wife with pressures that she would not have had otherwise. That is a really old story and it happens all the time."

Um, doesn't that go under the LIFE INSURANCE part of the budget???

Miriam said...

Shalom,

did I miss a post which discusses finance when one is living in Israel and being helped by a mother in law?

thanks.

Abbi said...

tamiri- LI provides the money, hopefully, but unless it's such a massive policy that the surviving spouse could pay someone to sort out the family finances, that spouse will still have to figure out a budget to make the money last as long as possible.

In addition to the fact that the policy, if it exists, might not be all that big to begin with, in which case, the surviving spouse will still have to figure out how to support the family and deal with finances.

In either case, there's no escaping fiscal responsibility.

triLcat said...

I don't know all the details of our budget, but I know pretty much what we earn and what we spend. Moreover, I know what our long-range financial plans are and how we're doing on the way.

When we sat and discussed our monthly budget, I saw that if we did certain things I wanted, we would be a few hundred dollars short. Since then, I've willingly cut a few unnecessary expenses and started to work a few hours a week to close that gap, so that we can meet our financial goals and have the things that I want (such as a car - we don't have one right now).

This is a situation where finances are fine, everyone is living within budget, and we're not living in poverty - not knowing the numbers would make me very resentful of the situation.

twinsmommy said...

anon about our cars--- yeah, we weren't so deep in 99 and 01 when we started with these cars. But just getting them paid down and then keeping them for a good 15 years each (hopefully!) will be easier than going through the hassle of selling them and then trying to qualify for more credit to get something cheaper (the 99 is worth nothing now and the 01 we're probably upside down on, so we wouldn't make any money selling them).

So you'll approve in another 5 years when we're no longer making payments and we still have these cars. :)

anonymous mom said...

I see I did miss something, SL. Sorry. With regard to death of a spouse, I am referring to the challenges of sorting out and then managing finances that many widows who aren't involved in the finances before face. I know of more than a few cases like this and it adds to the pressures on the woman and the extended family in the months following the death. Personally, I think it fuels the drive to get remarried--at times to the wrong second spouse.

Anonymous said...

If you get a large life insurance policy paid out due to a death of a spouse, you'd BETTER get professional counsel. You can't afford not to. Times of grief are no time to learn money management. Additionally, even if you were handling the money before, you may not know what to do with a windfall to make it last the rest of your life. My life insurance policy is large enough that, wisely invested, will 100% replace my income for the rest of my wife's life, even without Socialist Security and money already saved.

It shocks me life insurance isn't regularly pushed in the frum world. When it is recommended, it is rip-off whole-life, sold as a way to save money. Maybe it's because the schools will let you save money in a rip-off whole-life policy, and not in an IRA? But all frum families need 8-10x their income in a term-policy of about 20 years (depending on the age of your kids). It's reckless not to have it.

Tamiri said...

We took out a $1M policy on my husband, when we lived in the States, which would have been enough to cover the mortgage and many years of tuition for the kids, while I would have had time to train for something. I would never have used that "windfall" for anything but living off the interest (I think 5% would have been realistic back then), but at least I was covered for a while. Then again, I do the spending and accounting here, so I know how little even 1M dollars is ultimately worth.
BTW, speaking about life insurance for the working husband... what about life insurance for the wife? Isn't her work, even in the home, worth something as well? What is her "replacement" cost?
As I said, I missed the "life insurance" line in the budget discussions. I think this is hopefully money thrown out, but a good "just in case". We read too many horror stories about families which did not even have enough money to bury the head-of-household, let alone survive without him.

frumhouse said...

First of all - amazing post!!!

Secondly - Someone recently asked me why I don't post on imamother anymore - your rehash of the imamother discussion and Motek's response is one of the main reasons I no longer post there.

The answer for every shalom bayis problem for some of the "frummer" women on the board who are constantly bringing in "daas torah" to support their positions -always entails the wife sucking it up and letting her husband have his way.

I constantly marvel at how kollel families and families where only the husband (with no college degree) works manage to live such comfortable lifestyles. I assume it is either supplied by support from wealthy parents or maxing out credit cards/home equity or some type of illegal activity.

I fail to see how any woman that brings in a paycheck can be left completely in the dark about funds.

Abbi said...

Right- the point is, though LI is critically relevant, if the wife has never looked at a bank balance in her life, she will still have issues- especially if the husband left her mountains of debt stashed away in dark places. And she'll still be at square one in terms of learning how to manage family finances.

Anonymous said...

Life insurance on the wife is important as well, but not as much as the husband. I wish I had it on my wife, but I'm not going to bug her about it. If G-d forbid, something happened to my wife, money would be tight, and I'd likely change around my budgeting, but I could afford what I needed to afford on my salary.

Without me, however, my wife could not earn enough income to pay the mortgage plus childcare. Maybe after working for 10 years, she could build up that kind of experience to be worth what I am in the marketplace, but she would need income replacement for life.

Ariella said...

SL-this is a bit on a tangent but related to finances -- specifically taxes. Someone in our neighborhood sought to demand a larger donation from us toward a shul than what my husband had offered. While saying there is no membership, he insisted that each family should pay at least $500. He said, further, that what he gives to the shul he does not consider a donation for it is owed for the services received. I answered by that reasoning he cannot count what he gives to the shul as tax deductible donation. As tuition is a fee for service, it is not tax deductible despite the fact that the school is a nonprofit organization. So, SL, if a shul starts to take such strong-arm tactics to force money out of attendees, can it then also sign off on a receipt saying no goods or services were offered for the donation? That seems rather two-faced to me.

Yoni said...

Isn't her work, even in the home, worth something as well? What is her "replacement" cost?

The talmud says that he whose wife his his youth dies, it is as if the temple was destroyed in his day.

Personaly if after I married my wife died I would burn any money that was ever given to me in the form of life insurance, so offended would I be at the mere concept of "replacing" her.

I don't know about anyone else, but in my eyes a wife is utterly irreplacable, nomatter what value.

SephardiLady said...

Yoni, You are a bit of a romantic. No one can replace a wonderful spouse. But, if the worst happens ch'v, you will need the policy to keep on truckin'.

Anonymous-Whole life insurance is a rip off. I don't know how to change the prevelant in the frum community, but perhaps all families applying for scholarship should have to show some level of term life insurance. Maybe the idea could be explored later.

Ahavah said...

"I constantly marvel at how kollel families and families where only the husband (with no college degree) works manage to live such comfortable lifestyles. I assume it is either supplied by support from wealthy parents or maxing out credit cards/home equity or some type of illegal activity."

Well guess what? Some of us just choose to live within our means. My father, my both of my husband's parents, and my gransparents who raised my sister and I are all dead. We don't do anything illegal, and we are able to make more than the minimum monthly payments on the debt we do have. It can be done.

Ahavah said...

"Isn't her work, even in the home, worth something as well? What is her "replacement" cost?"

I found an article sometime in the last year or so that tallied up all the "unpaid" stuff the average housewife does and the cost of buying all those services from outsiders was well over $100,000 a year. If the wife does accounting and budgeting too, it's more like $150,000.

That is something that you have to consider when sitting down to figure out if it is "worth it" for the wife to work - not to mention the higher taxes you'll be paying for a double-income family. When you sit down and do this, you will often find that except for a woman with a professional degree who can actually pull in a 6-figure salary, it ends up costing more than you bring in to work.

There's a book you can get used from Amazon.com for about $5 called "The Two Income Trap" that discusses this problem. Most people never sit down and do the math - they just figure if the wife works it means more income, without realizing that the added costs of working and having to pay for things like childcare, etc., which were formerly free adds up quickly.

Anonymous said...

I am a wife in the dark by choice. I know that we are sometimes flush, sometimes a little in debt, as my husband's business ventures start and grow. I used to be more involved, but the stress was too much for me. I figure he can be stressed for the both of us. Once in a while I ask him for a general report card on aour finances and that is enough for me. In the case of CV"S his death, I have already met with our accountant, and am comfortable that he will be able to teach me whatever I need to know at that point, as well as serving to structure the LI payout to provide a reasonable income for me.

Lion of Zion said...

ANON:

"Someone with that debt load should be driving a couple of early 90s models, at best."

i disagree. you can skimp on clothing, food, entertainment, heat without incurring further expenses.

owning an older car, on the other hand, is generally a good way to throw money out the window. an older car can easily cost you a few thousnd dollars a year in repairs. better to invest that money in a newer car (which will save you both $ and time)

Lion of Zion said...

SL:

"Unfortunately, many spouses are "none the wiser." I hate to bring up the subject of fraud again . . ."

i don't know. the more i think about it i wonder how many of these wives were really clueless. i mean, there is a point at which a semi-intelligent wife has to realize that they are not living the lifestyle of a [whatever].

Dave in DC said...

My wife grins and bears it when I drag her through a high level overview of our finances on a quarterly basis or so. When she looks around at our friends living large and asks the "they seem to be doing fine" question, I tell her there are only three possible explanations - stealing from the past, the present or the future. My parents worked (and still work) very hard and deserve what little luxury they can afford, I have no inclination to take from them. I don't suspect any of our friends of ethical misdealings in the present, but I'm certainly not going to resort to that. And while I may be overly conservative in putting away for the future, I know for a fact that others in our community aren't putting away nearly enough.
My question is: what's the proper channel for educating our communities on these issues. They don't all read orthonomics :-)

tdr said...

"perhaps all families applying for scholarship should have to show some level of term life insurance. Maybe the idea could be explored later."

I love this idea. However, to what extent can tuition committees require proof of financial responsibility before doling out the cash? Obviously they would have to draw the line somewhere.

Re life insurance for husband or wife: we have enough life insurance so that if G-d forbid one of us passed away, the other would be able to stop working full-time.

It's hard enough to work full-time OR be a single parent, but to have to do both by yourself?! Good-bye sanity!

And if you have kids at home, I don't think there is much choice here. You have to outsource the whole job of housekeeping (and good luck finding someone competent/reliable/loving not to mention Jewish) OR cut back your work hours to a reasonable level so that you can be in your home taking care of many of these tasks. Both of these require cold hard dollars to keep your head above water financially.

By this reckoning, life insurance for both spouses is equally important. And IMHO, not optional.

Anonymous said...

Lion of Zion---check your math. For some reason, people are able to hide bigger costs than smaller one. People like to buy brand new cars for the "warranty". Amazing, because a 3 year old car with no warranty costs almost half as much. Yes, you might need to pay for repairs out of pocket, but it is small compared to the amount you save.

I'll grant there is sort of a Laffer curve of cars (they get too old to maintain, or so new they are pricey). I'll grant that mid-90's cars might be where the laffer curve starts to peak back up, but late-90's to early 2000's. You can get a steal on a car that works great.

An example of this monetary confusion--hybrids. People get all excited about saving money on gas. But when you actually add up how often you fill up and how much you save, you find it often doesn't pay for the price difference of the car.

anonymous mom said...

My husband just updated my and his policy. I was wondering aloud if he really needed to get a better plan for me and he went over the costs and the payout. He explained that he really wanted to be able to spend more time with our kids in case of a tragedy, that he would want to be there to pick them up from school and eat dinner with them. How could he do that if he didn't cut back drastically on his workload? Yoni, I'm not insulted. I'm proud of him and--although the conversation is a bit awkward--I was happy to have this talk. When you have kids, their needs are way more important than a couple of awkward conversations and monthly payments.

On the subject of cars, I'd like an entry about that alone. I think this new approach of leasing that is almost universal--is a waste of money and an exercise in denial. We have never owned a new car separately or alone, never leased. In recent years, we made two purchases that were later models as opposed to the clunkers we drove when we first met. But that was our only concession to minimize the costs of repairs. And this strategy has worked fine so far. Not enough people consider this choice in their budgeting decisions.

Anonymous said...

Dave Ramsey calls it "fleecing a car", as it's the most expensive way to operate an automobile. By 2-3 year old cars with cash. In 2004, we bought my wife a 2001 Saturn L300 Sedan off eBay. It had every feature possible (leather, moonroof, heated seats, etc), along with a V6 engine. Had only 20k miles. Cost us $7000. That car likely cost more than 3 times as much only 3 years before. In the last 4 years, it's needed the occasional repair, but nothing close to buying a new car. And though we're keeping it, were we to sell it, it would still sell for a few thousand dollars.

JS said...

ahava said "That is something that you have to consider when sitting down to figure out if it is "worth it" for the wife to work - not to mention the higher taxes you'll be paying for a double-income family. When you sit down and do this, you will often find that except for a woman with a professional degree who can actually pull in a 6-figure salary, it ends up costing more than you bring in to work."

I hear this same sentiment over and over again. It is simply not true. I would say if a woman is earning only say $30K or less you might be right - but this depends on what additional expenses are incurred when a woman works outside the home. For example, how many children are there, do you need to use day care, do you need a cleaning woman, do you need a live-in person, etc?

I think it's very cavalier to go around saying women shouldn't work if they can't bring in $100K or more. For the very same reasons everyone is talking about life insurance, it's important for women to learn job skills and be able to support themselves and their families.

Also, by your logic, why should a man work if he can't earn 6 figures?

Lastly, the entire thought process is wrong since it assumes one's salary should start high and not that it could ever rise over time. For the vast majority of people who do earn 6 figures, they didn't start out at that salary, they worked for many years at lower salary and climbed their way up the corporate ladder, earning job skills, and trading in those skills for better paying jobs.

Your advice tells women to not better themselves and to just give up if you're not immediately in the earning elite. This is short-sighted and indicative of a culture that demands instant graitification.

Esther said...

Yesterday everyone in our company sat through a detailed meeting with our new head boss, going over this year's budget in a lot of detail. Yes, a lot of the info was over our heads and, for some of us, boring. But it was put in the open, and our boss is encouraging all employees (even those not in sales) to care about knowing where our company stands.

I think this is a perfect example for this discussion. Everyone has different tolerance for "the numbers" and both spouses don't need to know every single detail at every moment (as long as at least one of them does!) But, both spouses should CARE that they have enough to support their families, and should have some basic idea of how that is happening (income and expenses). More importantly, this is never something that should be hidden by one spouse from the other. And one spouse shouldn't be afraid to ask questions about how much income was made this month or where money is being spent.

SephardiLady said...

JS-You could apply the equation to the lower income earner too. The second income earner is taxed at the marginal rate and you loose the services that can be provided in the home (daycare, "camp," cleaning, etc). In addition, coordinating two schedules around children can be taxing on the family and can make it harder for one earner to climb up the ladder because they always have one foot out the door to run to pick up the kids at daycare, aftercare, etc.

I haven't read the Two Income Trap, but checked it out at the library this week since I've seen it quoted.

Also, I don't consider passing up small short term gains to be a sign of immediate gratification because being there for my young children is a high priority. And there are days where being at home is anything but gratifying. . . .

Keep the great comments coming.

JS said...

SL,

I see what you're saying, I'm simply pointing out that saying "If I can't earn 6 figures, I might as well not work" is a dangerous attitude. The decision to work or not work is a complicated one, and it shouldn't be muddied by such a statement.

In fact, I think a woman should consider how much harder it will be to enter the workforce as an "older" woman competing with young college grads. Companies want young people they can initially pay less and train. By not working now a woman may close off many opportunities down the road. Also, I can't even imagine how hard it must be to find a job when one's resume has a several year gap - even if that gap is to raise children.

This must be weighed against any short-term issues when children are very young and can't help out and need greater supervision and assistance.

If one thinks the woman's place is at home with the children then fine, just say so. But to say a woman shouldn't work unless she can earn 6 figures is insulting and just plain bad advice.

Lion of Zion said...

ANON:

"check your math . . ."

i'm not your explanation is relevant to my specific comment, as i specifically wrote the it makes sense to get a "newer" car rather an early 90s model. i did not write "new" car.

Abbi said...

"Your advice tells women to not better themselves and to just give up if you're not immediately in the earning elite. This is short-sighted and indicative of a culture that demands instant gratification."

JS: You forgot the most important long term benefit of all: retirement savings, 401(k) or IRAs. How many stay at home moms are putting away the money they would have spent on housekeeping expenses had they been working? (I actually have one friend who does do this- she used to have home help and let that go and is now putting away the money she would have spent into retirement savings. She also pays herself a salary).

Excellent comment. I think many women forget that the early years of childraising last a very short time. And if Gd forbid something happens to their husbands and they're left without adequate insurance, they're really in hot water if they didn't keep up their job skills. (getting into my flameproof suit now)

ora said...

Abbi--
"I think many women forget that the early years of childraising last a very short time."

It depends on the size of your family. Even if a woman has a relatively small family for the religious world, say three kids, one every two years for four years, and even if you say the "early years" end as early as three years old, the woman would still miss seven years in the workplace. If there are more kids, or they are spaced further apart, the time grows.

It's a complicated subject, IMO. On the one hand, it's true that as time goes by it can be harder to reenter the workforce, and whatever parent has been spending more time at home (not always the mom) will probably enter with a lower salary than s/he otherwise would have. On the other hand, it strikes me as unfair to the kids to have both parents working to climb the career ladder if there's any alternative. It's one thing to work, but to actively work at getting promotions, better jobs and salaries, etc, usually involves a fairly long period of demanding hours and exhaustion. In my family, and in all other families I've seen with a "career" parent and a parent who either stayed home or worked a less demanding job (w/o plans for a promotion) the "career" parent generally got home at least 3-4 hours after school ended, was out of town for days at a time for meetings, came home tired, etc.

Fortunately, "climb the career ladder" or "drop out of the workforce completely" aren't the only two options. Personally I'm hoping to work part-time for the next several years, thus keeping up my skills (although not getting any serious promotions) while not missing my kids' baby years because I'm working 50-60 hour weeks (which is what it would take, in my profession, to get the promotions).

Yoni said...

I don't exactly have a right to an oppinion but I think I'll side with Ora.

and I don't think that having a career and earning a lot of money through it is the be-all-end-all of life.

if you make a little less money, so? Its not like you're planning on getting a divorce.

and certainly there is an option of part time work. Doctors can work part time. They may not get much of a pay raise but have you seen the kind of money they can make in an hour, with less demands on it? My mother did emergancy pediatric care in a hospital for a while after her practice went bottom up and she made like half her previous salery for maybe a fifth the hours (or less)!

And that way you would still be majorly contributing, and still be able to stay home with the kids the vast majority of the time. (or even hire a baby sitter or two to look after them or something)

not to mention if you put in some good work early on and continued your CME credits, you could probably get back in to a part time job when your kids were old enough no problem, especialy if you built up something of a reputation.

I mean, unless you aren't making enough money, who cares if you get a promotion? Status isn't everything.

Abbi said...

Ora
I'm doing the part time route and it's really worked out for me.

I work five hours a day from home, in my field (editing), so my resume is up to date, I make a really great part time salary, but I'm home for my kids, I don't travel (even to work!)and my younger one even comes home at 1 to take her afternoon nap ( my older one prefers to stay in gan till 4).

Also, mornings are generally relaxed, no rushing out at 7 am to get to gan early enough so I can get to work (actually, they're a little too relaxed, but that's more my fault).

Most importantly, I love having the security that, if God forbid it's really necessary, I could fully support my family financially if need be.

I think that there are a lot more WAH/flexible work options then most women assume. It just takes some creative thought and a little effort.

Zach Kessin said...

I actually drive a leased car, but its a company car so I don't pay for it (OK at some level I do but I digress)

I will admit that we don't have life insurance but we soon will.

Am I the only one who thinks that half the frum community is 1 paycheck away from total collapse.