Got Orthonomics in your Email Box?

Sunday, November 30, 2008

Guest Post: Financial Sense for Chareidim: Mesila Gives The Tools

Thank you to Aaron Katsman, a Mesila volunteer, who outlines the nature of the work of Mesila, an organization that helps Chareidim to get out of debt, live within a budget, and become financially stable. Certainly the highest level of tzedakah. The great news is that Mesila is coming to the United States, first to Lakewood. Highlights are mind. Guest post below:

Being in the midst of a global economic crisis has brought home the point that individuals must take a more responsible approach to their finances. Unfortunately many households are already on the brink of financial collapse and lack the necessary tools to get their financial situation in order. I'm not only talking about economic collapse, but in many cases the strain this causes on their marriage is unbearable. Broken finances=broken families. What makes matters worse is A- the need for people to 'keep up with the Joneses' and B- the unbelievable ease with with anyone can access money. Both of these factors, as well as many others, have contributed to economic hardship and a culture of debt among many in today's society. While organizations like Debtors Anonymous have done a great job, many feel that due to special circumstances, Orthodox Jews need their own organizations to work with their own constituents. Mother In Israel had a great post, that appeared on Orthonomics, about Paamonim. I'd like to mention another group that does a lot of work in the Chareidi population.

Mesila works with families to provide them with the tools necessary to live within their means. It's not just another Gemach(Kindness organization.) Mesila tries to convey responsible, Torah-based attitudes towards finances. It's obvious that Chareidi society has different needs than other groups, ( feeding large families, Bar Mitzva's, marrying off lots of children..) and many people end up loaded down with staggering amounts of debt and spend their entire day running from Gemach to Gemach, rolling their debt.

As a volunteer for the organization,I have worked with tens of cases and can attest to the fact that their methods work. I'd like to share an example:

About two years ago I started to work with a young couple with 3 children under the age of 5. The husband was learning and the wife was a teacher earning a teachers salary. Wanting the same type of lifestyle that their parents currently enjoy, they bought a car, an apartment, and of course they could only furnish the apartment with the very best furnishings. Needless to say that their total income was about $1,000 a month, had expenses of $2,500 a month and had run up debt of $50,000. They were late on mortgage payments, municipal taxes etc.. You name it and they hadn't paid it. They were constantly under threat of being cut off from all utilities. ( Believe it or not this is actually one of the easier cases I have worked on!)

Well, we got to work. The first thing they needed to do was understand their expenses, both monthly and annually. Mesila believes that you need to separate your monthly and annual expenses from your debt. If everything s mixed up then you can't get a good understanding of the problem. Once the couple actually saw their income and expense line, they actually realized that they had a big problem. The husband immediately got a job as a security guard, and the wife started to supplement her income by tutoring. Then we worked on a budget. They would have to live within their means, and have money left over to start paying down debt.

A big issue for these couples is that they have no room to breathe. What do I mean? That even though they are making more and saving more they are constantly being chased down from people wanting to be paid back. So the couple made a list of all the individuals, and companies that they owed money to, and we starting calling them to re-work the payment plans. We also arranged for about $5,000 from a Gemach to pay back the most urgent loans; those of the local grocer, butcher and fruit store. The firms we called to re-work payments were so accommodating to the couple. I see it over and over again when it comes to charity. If people think that they are giving and they feel like the money is going into a black hole, they are less inclined to give. But if a family actually has a budget and they are doing their best to live within that framework, people are much more willing to donate. The same thing holds true for these firms. Once they heard that the couple is working with Mesila, they delayed repayment for a few months, and then made terms that the couple could handle.

I don't want to go on and on with this story but needless to say, the family is doing well. They have managed to cut their debt down to about $20,000, and are living within a monthly budget. The husband still works nights as a security guard but is in school studying to be a social worker.

Many of you will say that Chareidim should get out of the Yeshiva and get a job. First of all, Mesila believes in not judging anyone. You can do whatever you want to do with your life, just make sure that your expenses are no more than your income. Also, what you need to know is that in many families the husband works and may even work multiple jobs. The wife also brings in some extra money. They are very resourceful. It's just that if you have 10 kids, even if you net $5,000 a month you are going to be in trouble.

The need is great and they are inundated with requests to help. There aren't a lot of English speaking volunteers. There are hundreds of Israeli volunteers and they have branches all over Israel and are even trying to start a branch in Lakewood.

We could use more organizations like Mesila and Paamonim to enable people to get back on their feet economically. Any of you who think you could use your experience to help others are urged to call and volunteer.

Aaron, expect an email from me.

15 comments:

rosie said...

It took an entire generation, maybe 2 or 3 before frum people are finally beginning to realize that nobody owes them the best of everything. I don't know why there is no branch in Boro Park and Crown Heights. It bothers me that when a yid gets caught doing illegal shtick, everyone yells "anti-semitism". I see it as an emergency to get the word out that neither the government, nor other frum people, owe frum Jews "the best of everything." I remember once the bakery lady telling me about a guy who couldn't settle up his bill but still expected the best that she had in the store. When she offered him day old bread and cake, he was angry. Such a person as himself and his family should eat bargain food? Certainly a person of his great stature and his family was entitled to only the best. Maybe he was entitled but she could not afford to give it to him, basically because she didn't want lines and lines of similarly "entitled" people coming to put her out of business.

Anonymous said...

IIUC both Paamonim and Lmaan achai both take a similar approach of teaching how to fish rather then just giving fish.
KT
Joel Rich

tdr said...

These sound like wonderful organizations. I would definitely be interested in helping get something started here in Baltimore.

Is there anyone out there doing prevention? Teaching to the newly married, and not-yet-married population how to prevent getting into financial trouble?

Aaron Katsman said...

TDR- In israel Mesila has started to run seminars for the newly and about to get married to teach them thse basic home ec. principles

Lion of Zion said...

TDR:

"Is there anyone out there doing prevention? Teaching to the newly married, and not-yet-married population how to prevent getting into financial trouble?"

the problem is that in a lot of situations the only way "to prevent getting into financial trouble" is not to get married to begin with. the expectations of the larger jewish community set up many new couples for financial failure and these organizations can be seen as (important) band-aid solutions to larger underlying problems.

tdr said...

I don't agree at all LOZ! Getting married doesn't automatically spell financial trouble unless you let it.

I agree about expectations setting people up, but that's what the education is for. To enlighten people and teach them that not only do things not have to be done a certain way, but that doing them that way will get you into hot water.

In some cases people really do need to learn by their own errors, but there are probably many people out there who simply never learned how to live responsibly. Or who have seen friends or family suffer from mistakes, but have no clue how NOT to fall into those same holes.

ProfK said...

tdr,
I'm going to presume to speak for Lion as well as myself re couples not getting married. I don't think Lion was "assuring" marriage altogether. But yes, there are some couples who should not be getting married at certain points in their lives because all the financial planning help in the world won't help unless their finances are adequate before they get married. If a couple is willing to say we don't have enough money to live on but here is how we can EARN more, and they actually undertake to do so, then okay. Why isn't adequate parnoseh at marriage considered a vital requirement for a shidduch? It's more than past time to stop romanticizing poverty and certainly past the time of encouraging poverty as a basis for starting a marriage.

anonymousmom said...

Mesila sounds great. I hope it works out in Lakewood and other places in the U.S. High time. Especially the pre-marital counseling that I see being offered. That will help and it will give parents the practical suggestion or requirement to present to the children who are about to get married. "I'll pay for part of this wedding, if you attend x number of Mesila workshops."

Commenter Abbi said...

profk: So non-Jewish grad students never get married? The issue is not whether at the date of marriage, both members of the couple are financially ready to make a go of it. The issue is more familial and communal expectations. If the community sets up certain consumer expectations- owning a beautifully furnished new apartment/house the day after you get married- that's what sets couples and families up for failure.

Halevai that poverty was romanticized. It's not- I haven't heard of hordes of frum Jews breaking down the doors of Goodwill to buy used clothes. People don't want to make a living but expect to continue to live an upper middle class existence.

Hopefully, by sitting down and actually looking at the numbers, groups like Mesila can slowly try to change mistaken communal attitudes at a grass roots level.

Anonymous said...

I don't think Lion was "assuring" marriage altogether.

No, no, no! Marriage is to be encouraged. But a few things should be "assured" -

1) Kollel attendance for more than the top 1 or 2% of the students. Kollel admission should be more competitive than Harvard admission (it should be like Harvard admission with a full scholarship). Imagine the great Rabbonim we would end up with if only the best and brightest students were admitted!

2) No children (or perhaps even no marriage) until at least one spouse has a proper profession or business that can provide an adequate family parnassah.

Mark

Anonymous said...

Mark,

What you are more or less saying is that only a minority of people are allowed to have children (or perhaps even get married). Most professions do not provide an adequate family parnassah--that is why both parents will work to support the family and that is why both spouses should have life insurance, so that if either person dies there will be enough money to take care of the family. You are also saying that doctors should not have children (or possibily get married) until they finish their residency (which may be when they are well into their thirties). The issue is not whether the person HAS a profession or a business now but whether they have a realistic plan for the future.

Dave said...

It doesn't look to me like Mark is saying that at all.

It does mean that families will make hard choices (including education costs, where in the world they live, and how large a family they have).

And no, Doctors do get paid during their residency; not as much as they do after they complete it, but they certainly get paid.

"Having a plan" isn't sufficient. The money has to come from somewhere.

SephardiLady said...

I don't see following #2 was saying no to marriage in the least. Adding children to the mix is another ballgame. But many a frugal person has made ends meet through frugal choices.

SephardiLady said...

And, btw, doctors make about $45,000 as residents and many have survived residency and even saved and/or paid down student loans.

Anonymous said...

TDR.

There is such a program in the works for Baltimore. You can email mesilamaryland@gmail.com for more information.