The following was just published in Mishpacha in response to another letter. It is written by a Mesilsa counselor, an organization that I admire. I'm always thrilled to see well written pieces that help disseminate ideas that are key in helping build financially stable families. This is an excellent response. Rarely is solid financial advice groundbreaking as it is rooted in sechel and a mesorah.
CREDITS CARDS ARE NOT THE ANSWER
[Inbox / Issue 309]
In response to your article entitled “The Newlywed Spending Bubble,” Y.B. from Lakewood writes the following: “For some of us, credit cards are a lifesaver. Shabbos comes every week, no matter what your financial status is, as do the Yamim Tovim, bar mitzvahs, weddings, and the like. Even if you don’t buy the fanciest roast, you still need the basics, which can be burdensome for large families. And when your son’s toe is at the end of his shoe or already popping through, you can’t always wait until the funds are there.”
As a Mesila counselor, I have to respectfully disagree with that statement. For a family that is struggling to pay for its basic needs, creditcards are not a lifesaver, but a dangerous trap. Putting purchases on a credit card is an easy way to pay for immediate needs, but it creates a much worse problem in its wake.
If a family is already having a hard time making ends meet, paying an extra 15–30 percent in interest above and beyond the purchase price of everything on their credit card will surely make things harder.
Even if credit cards are a lifesaver in certain situations, a lifesaver is by definition something that should be necessary only in an emergency. Shabbos is not an emergency; nor are Yamim Tovim or simchahs. And kids don’t outgrow their shoes in a day or two. If a family is feeling the pinch from any of these normal, predictable expenses, credit cards are not the answer.
Y.B. goes on to write: “Some of us must have bitachon that, although we don’t know how we will pay off our credit cards, if we are doing ratzon Hashem, we are confident that He will provide for us in some way or form.”
This is a gross misapplication of the concept of bitachon, for bitachon does not justify acting in a way that is financially irresponsible. Charging things to your credit card and then waiting for money to miraculously appear is a highly dangerous habit, and one that the Ultimate Provider
will not necessarily underwrite.
So what is a struggling family to do when there are bills that need to be paid, but no money to pay them with?
For one thing, they can seek creative, low-cost alternatives to ensure that the family is adequately fed and attired. They can also build a spending budget that maximizes every dollar and allows them to meet their basic needs while avoiding unnecessary expenditures. And a prime example of an unnecessary expenditure is money paid to the bank in the form of
interest on credit card debt!
It is also critical for every family — even a family that is having a hard time making ends meet — to put aside cash on a regular basis. Even if all you can manage to put aside is $10 a week, the money will build up steadily, giving you your own little fund to turn to in a pinch — instead of having to look to greedy credit card companies for illusory salvation.
[Meslia Counselor]
Baltimore
Good advice. Over on a blog which deals with Bergen County yeshiva tuition, the blogger posted some sample expenses of a $200k earner paying tuition for 4 children (a $60k expense). He then pointed out that no money was left and certain expenses such as food and clothing weren't even yet factored in. When commenters asked what these $200k earning families do when they can't meet expenses, the response from all who responded was credit cards.
ReplyDeleteThis is a problem that hits all income levels. Living beyond your means at any income level is dangerous. Yeshiva tuition isn't an excuse, imo.
And Shabbat is DEFINITELY not an emergency, it comes up every week. It's not a surprise. I have some sympathy for bad planners when "Pesach comes up on you," and I'll admit that in some years, Pesach goes on credit cards and dealt with afterwords, but Shabbat...
ReplyDeleteCome on, how newly observant do you have to be to be shocked that Shabbat rolled around. You throw a chicken leg, a potato, and onion in a pot and have soup, it sucks, you can be fancier the next week, but if you don't have money, oh well, there is always next week.
And if you want a slightly nicer dinner, mix 2 pounds of whole cut up chicken (on sale at my local kosher market for 1.99 a pound) with barbeque sauce (on sale for $1.25 a bottle), bake for 1-2 hours at 350, serve over 4 cups cooked rice (Approx $1 worth) with a frozen brussel sprout package which is microwaved and mixed with a tablespoon of olive oil ($1.50).
ReplyDeleteAdd in some homemade Challot for $2.00 or so and a little grape juice or wine, and you have shabbos for about $10.
(If you purchased bulk rice, etc. at a large chain store like COSTCO or Sam's Club, you could probably save even more).
Conservative Sci Fi,
ReplyDeleteThat was our Shabbat dinner EVERY week when we got ahead of the game enough to stop eating hot dogs for Shabbat, with me getting home a little early to fire up the grill in the summer.
How much does a good pair of children's shoes cost, $30? 1 or 2 meatless Shabbosim will cover that. As for Shabbos in general, MiamiAl is right, how can that constitute an emergency? It comes every week! We are still in the scrimping stage ourselves. We have meat on Shabbos at the cost of no meat for the rest of the week. So you can't even use the excuse that Shabbos is special, requires meat etc, because there is definitely no rule that says you must have meat at any other time. You want your roast on Shabbos? Then you're eating beans on Tuesday!
ReplyDeleteSo true!
ReplyDeleteShabbat? Not an emergency. Comes on a schedule that is VERY reliable.
Chagim? Not an emergency. Same deal. Check a calendar.
A simcha? Not an emergency. This is especially true of things like a bar mitzvah or brit milah. In one case, you have months to prepare for the possibility. In the other care, you have years.
I'm all for spending extra on chag, shabbat or smachot. But you've got to budget for it. These are all predictable events.
dvorak613,
ReplyDeleteWe went through a rough patch, cut out all meat except Shabbat, then cut back on the cheeses... found a farmers market for cheap produce, and... a funny thing happened, I lost 20 lbs, my wife 10, we feel YEARS younger, and the kids LOVE eating fresh produce.
Things got better, we still RARELY have meat during the week, and at least 1-2 meals/week are vegan (no animal products in them).
Like I said, I'm somewhat sympathic about Chagim if "something happens" but that shouldn't be EVERY Chag. However, it is inexcusable to borrow money for Shabbat.
Miami Al- unfortunately, we don't have access to affordable quality produce. Our pocketbook does take a hit for that. When I started weight watchers after the baby, our food bills definitely went up. It's kind of ironic that the fattest people in this country also tend to be the poorest, but not all that surprising, given how much cheaper it is to buy junk.
ReplyDeleteAs for cheese, I am somewhat addicted to it so we buy, but obviously not the fancy kind. Do I miss my goat cheese? Definitely, but shredded pizza cheese will do until such time as I can have all the goat cheese I want :-)
Y.B. goes on to write: “Some of us must have bitachon that, although we don’t know how we will pay off our credit cards, if we are doing ratzon Hashem, we are confident that He will provide for us in some way or form.”
ReplyDeleteThats not Bitachon, thats denial.
dvorak613,
ReplyDeleteI eat way LESS cheese, but more expensive cheeses. I go through the gourmet cheese section looking for the 1-2 that have a good kosher symbol and try them. The joke is, the "heimish" cheeses are so damned expensive that usually for slightly less money, I can have a really nice gourmet cheese.
The cheese is REALLY fattening, it's worse than most cuts of meat.
Don't get me wrong, fresh produce is more expensive than "junk," but less expensive than fancy roasts. We almost NEVER eat red meat, now when I eat it, I don't feel good for a while, my body isn't used to it.
The best way to save on cheese is to buy a 5 pound block. It's something like $4.49 per pound where I live. The pre-shredded cheese is sometimes twice as expensive and I always had trouble with it spoiling. The big block doesn't spoil and the cheese tastes great when it's freshly grated. Even the cheapest kosher sliced cheese is about $3.00 for six ounces. You do the math!
ReplyDeleteI like the advice of the post, but I take exception at calling a credit card company greedy. They are not greedy. This is business, which provides income for many people. Yes, they profit of the stupidity, but so what?
ReplyDeleteRabbi Aviner in EY has dealt with this 'bitachon' issue in his email exchanges. Bitachon is trusting HASHEM when he has promised something. But as HE has not promised that he will give you money to pay off whatever credit card bills you have rung up for whatever it is you are buying, it is not bitachon at all.
ReplyDeleteOf course one might argue that Shabbat spending will be repaid (see the story of Yossi Mokir Shabbos in Meschta Shbbos page 119).
Mlevin-I agree with your commentary.
ReplyDeleteIf you're spending $30 on boy's shoes, you're overspending. You can get them cheaper than that at Penney's, not to mention Children's Place, Payless, Target...
ReplyDeleteIMO, it's much easier to buy a little smarter than to change your diet...
Bitachon means that Hashem has a plan, but it does not mean that His plan is everything will work out the way you want. In other words, if you really wish for a windfall, pray for it, and declare you have absolute bitachon you're going to get it, that doesn't mean you will. Yosef Mokir Shabbos spent all he had, but he didn't rack up credit card debt to buy the fish. And, more importantly, he did so without any expectation of being repaid with wealth.
ReplyDeleteBut for those who truly don't have enough for Shabbos, Tomchei Shabbos puts together packages with the basics -- chicken, potatoes, challah, grape juice, etc.
ReplyDelete