Halloween: A bit insulting, no?

Update: A commentor suggested a very nice text for a Halloween letter to trick-or-treaters that will be adopted. Just wanted to make sure that hit the text of this post.

Seems the J-blogs are all discussing what to do about Halloween. For the past decade and a half, I can't recall seeing any trick-or-treaters. Maybe neighborhood trick-or-treating is reclaiming popularity. Honestly, I wouldn't know. I get the feeling that the non-Jewish children in my heavily Orthodox neighborhood head to the mall for a more sanitized version of trick-or-treating.

Amongst the suggestions of how to deal with Halloween is this one which appeared on Hirhurim/Torah Musings. I have to say, it floored me. Here is the posted letter and my response, which I hope I kept respectful because clearly the Rav who employs this method is a far more refined and learned than I will ever be:
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ATTENTION
ALL TRICK OR TREATERS!!!!
Instead of taking money to buy candy and treats to give to all of you, our family takes that money and gives it to an organization which takes care of poor and sick children.

We do this because we want to help other wonderful kids who are not as lucky as you because they don’t have enough money to buy fun things (like Halloween costumes), because they are sick, or because their parents don’t live with them anymore.

For each kid that signs below, we will give $3 to help poor and sick children. The more kids who sign, the more money we give, so please sign!
THE [Name deleted] FAMILY
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With all due deference, I find the letter to be rather patronizing, to say nothing of insulting. Unless I am mistaken, those who live amongst us see our children dressed in their costumes on Purim and delivering massive quantities of nosh in fancy baskets. They might see our children hopping from Sukkah to Sukkah where they are plied with sweets. Perhaps they see our kids collecting from the shul candy man weekly. Certainly they see us celebrating our holidays and Sabbath in style, from bringing home treats to dressing up in pricey clothing, shoes, and accessories. They may well work for kosher caterers, kosher groceries, or in kosher bakeries, which would make them well aware of our consumption habits. . . habits they likely could never emulate.

To write a letter informing the children/parents that you have no interest in giving them a measly Hershey's Kiss or two because they are lucky enough to have been able to afford a costume and there are children starving in Africa doesn't strike me as an effective way to educate others about the importance of tzedakah. (And, who is to say that the trick-or-treating children come from intact families? Who is to say that they have enough food on their tables just because they are wearing a costume? (L'havdil) On Purim, when a person asks for tzedakah, do we tell them they must not be in need because their child has a costume on which must have cost money? I think a touch of dan l'chaf zechut might be helpful here.)

Many charities use Halloween as a time to promote their charity. I can't imagine any of them saying, don't spend $5-$20 on candy because there are children starving in Africa.

Perhaps I'm just in a bad mood, but so long as my children get to enjoy the ridiculous amounts of candy and junk, guilt-free, at Shabbat kiddushes, Sukkah Hops, and Purim parties, I have a hard time viewing such a notice as anything but insulting. I'd say that if one is so inclined to acknowledge Halloween, why not let the cute clowns, babies, princesses, ballerinas, Buzz Lightyears, and Superheros have their lolly pops, mini-candy bars, and kisses without a big show. If you have a cause close to your heart, do as some of my non-Jewish friends do, and attach a note to the candy that support military vets, medical research, or cancer patients. If you are not inclined to acknowledge Halloween, turn off the lights and refrain from any participation.

Look Before You Leap: Debt Settlement

(Any reader who is an imamother commentor, feel free to post my advice on any of the recent threads discussing debt settlement. . . . Disclaimer: This post is informational only and does not constitute personalized tax advice, just a summary of potential issues to be aware of).

There have, sadly, been numerous recent posts on imamother from families in untenable financial situations, often accompanied by plenty of debt, usually credit card debt. The "solution" offered by others is to settle the debt. You don't even need a company. . . you can do it yourself! is the advice. Some offer their success stories of negotiating debt down to pennies on the dollar. And, it it worked well for them, it should be something you should try too, right?

Well, maybe not. The decision whether to settle debt isn't just another solution for the amateur to test drive, like asking a credit card company to lower your rate or engaging in juggling debt from one credit card with a promotion to the next. . . . . nor is it particularly advisable to the leave it to the "professionals", i.e. those debt settlement/consolidation companies that have sprung up like weeds with all sorts of incredible claims that could work for you too. (I've noted many companies advertise heavily in the frum world).

Take my advice: before pursuing this route, consult a tax advisor/CPA who is familiar with the issues at hand. Just like in any other profession, the initials alone do not an expert make.

In short, debt settlement, unlike bankruptcy, can be a taxable event. In bankruptcy, unsecured debt is forgiven, although student loans and taxes owed still remain. In a debt settlement, there may well be a taxable event that one needs to prepare for. In such a case, the debt needs paid off as negotiated, and come tax time, an unfamiliar tax document called the 1099-C (Cancellation of Debt) will arrive in the mail and a new debt may be incurred, this one to good ol' Uncle Sam, as well as the State and Locality of residence. The taxable amount will, of course, be taxed at the marginal rate and could eliminate valuable tax credits. This could make the settlement not quite the bargain assumed.

The short of the long is that the amount shown on the 1099-C is taxable up to the net worth of the taxpayer. And, there is the rub. While some professionals in the debt settlement business will tell you ". . . relax about paying taxes on canceled debt balances. That should be the least of your concerns if you're upside down financially. Don't let the misguided criticisms of financial writers (who haven't done their homework) discourage you from looking into one of the most popular and flexible options for achieving debt-freedom," you might define insolvency from a different standard than the legal standard.

(See Pub. 4681) When a taxpayer is deemed insolvent, there is no tax incurred. Where a taxpayer is solvent, tax is incurred on the amount of the debt settlement up to the amount of solvency. The insolvency worksheet (p. 6) assists the taxpayer in determining their Net Worth. Assets include just about everything, from the home to jewelry. Liabilities include all debts owed, from the house to the babysitter.

I can easily envision situations where a debtor may see no way out from their mountain of debt, see settlement as a great option, and end up in a pickle come tax time. This especially could be true where equity exists in a home or business. So, tread carefully. And feel free to point to this very, very incomplete synopsis when others recommend debt settlement. For some, it might smell like roses; For others, like rotten eggs.

This Goes to the Heart of Things Marriage and Family

Marty Bluke at the Jewish Worker summarizes an article from the Hebrew Mishpacha. I have to wonder what sort of new social experiment, which goes beyond all things marriage and family, will result next should economic change not be accepted and approached with sechel:

This weeks Hebrew Mishpacha magazine had a very depressing article that because of the economic downturn and the rising apartment prices the shidduch market has slowed down dramatically in Israel. The reason is very simple fewer and fewer parents of girls can afford to buy an apartment for the couple. Many/most of the boys are still holding out for an apartment and there are very
few parents of girls who can afford it.

The article says that the dormitories in the Yeshivas are full because the older boys who should be getting married aren't. One Rosh Yeshiva said that usually around 30 boys a year get married, this year only 10 got married. The head of a post high school seminary said that in the past half the girls were engaged or married by the end of the year, last year it was only 10%. The reason is very simple, the boys are holding out for an apartment and the girl's parents simply can't afford it.

The bottom line is that the average Charedi family size has gone up to over 6 kids per family and the income sources have gone down. In previous generations people had war/holocaust reparations from Germany, people actually worked, the cost of living in Israel was much lower, people had money from grandparents, and people lived much simpler life styles. All of these things have gone away. We now have the second or third generation of kollel only parents marrying off their daughters and the money is simply not there. There is simply no way that people can afford to pay $150,000+ to marry off their daughter.

The big question is what is going to happen? IMHO this is a much bigger issue then concerts, internet, etc. This goes to the heart of things marriage and family. It is disappointing that more hasn't been done by the Charedi leadership on this issue.

Interesting read about what a glut of Arab single men, unable to marry because they lack funds to marry "properly", is doing to Egyptian society. Two concepts: destabilization and growth of extremism. Many would predict that amongst the Orthodox, the opposite would set in.

Guest Post: Predicted Symptoms of Middle-Income Overspending

Dear Orthonomics,

I attended a big actuarial conference this week and one slide at one of the presentations caught my attention.

The topic was marketing insurance to the middle market (defined as household income of $35,000-$125,000).

The speaker commented several times on the differences between the older baby boomers (born in the first 10 years of the boom) compared to the younger boomers and Generation X. The older boomers saved, took financial responsibility, and basically lived within their means. The younger boomers and those who follow them are debt-ridden spenders. It's very hard to sell insurance to this market because they have so many other needs, due to their profligacy.

He said - and this is where I thought of the Orthodox community - that things will not change for this group until they suffer a lot of PAIN. He predicts:

1) multigenerational housing - people moving in with their adult kids.

2) family interdependence [you had a post about this recently].

3) people working longer, putting off retirement - although he does not see jobs being available for this group when it ages.

4) an increase in poverty.

This was a good example of how the problems we see in the Orthodox community are not necessarily unique to our community. Many of the problems in the Orthodox community mirror problems in the rest of society (although frum people like to think that they're insulated and special). Maybe the frum world has the financial pressure of paying tuition - but if it weren't tuition, there's likely be something else to squander money on.

The generation before mine somehow managed to pay tuition and not go broke. Different generation, I guess.

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Thank you to the guest poster for sharing comments in industry re: the spending habits of the young. The Orthodox community shares that same plight, often coupled with our own meshugas and sociology, for lack of a better term. I think the Orthodox community as a whole is already knee deep in all four symptoms mentioned:
1. While I haven't seen too many parents moving in with children, I know of many married, adult children (often with children) who have found they cannot afford to maintain their own living quarters and have moved back in with parents. This must be a challenge in the shalom bayit arena.
2. Family interdependence is extremely high, and often unrecognized. I might be mistaken, but I have referred to many families that claim they receive no financial support, but they receive many, many hours of unpaid babysitting. Even where money is not being exchanged, there is interdependence.
3. I know empty nesters with higher mortgages than I have. 'Nuff said. Retirement is out of the picture for so many families.
4. Signs point to an increase in poverty.

Unable to Hold a Job

Hat Tip: Thank you rosie for sending this over. Rosie noted that the commentor advice in the piece I am about to link to, for the most part, leaned towards the practical. Such is a note that I don't want to ignore, although I am going to take this in a completely different direction that I'm sure is expected.

There is a letter from a wife on the COLLive.com website regarding her husband, and so many like her husband, that are unemployed, perpetually. The letter is a sad read on so many levels. Particularly sad is the wife's desire to medicate the anxiety that she feels after so many years. The anxiety is naturally increased by the family living above their means, even if they lack the many things mentioned in the article from pricier food to cleaning help (prime example of living above their means: tuition and upcoming weddings mentioned). Probably what is most depressing about the letter is that we all know (good) people who have a terrible job history.

In fact, I spoke to one gentlemen during my dating years who showed the same symptoms, but I ran the other way when I asked about his job history (flame away if you may!). In his 10 years of employment, he had never stayed at a single job for more than a year plus a month or two max! I could see that there was an underlying disease, manifested by the symptom of continually quitting jobs before others in the office would even know he existed. Since he was still single going on 30, the issue was a red flag for me. But at 21, 22, or even 23 years of age, I'm not quit certain how such an issue could be easily noted. The letter writer does not see the disease clearly, but I have highlighted her closest guess, amongst many, as to what the issue is in the excerpt below:

By the time the year [of kollel] was over, we had our beautiful first born. And so with the expenses of a child already and childcare (because I was working), he took whatever dumb job came his way. A job where he did not really learn any skills, did not really make any contacts – the job just paid the bills, and we couldn’t spend on anything beyond the basics. And then he quit that one, got another dumb job, again without skills and contacts. And so our life progressed through the years. B"H more children, other dumb jobs, never being able to spend on anything extra. He never went to school or took courses because he was always so overworked from his job and helping at home with the kids.

[skipping further down] He’s a good man. He is willing to work. But he doesn’t seem to be able to get decent paying jobs. He doesn’t really seem to have the know-how (or the resources) to start a business on his own. I don’t know if it is that he doesn’t present well at job interviews. Or he doesn’t have skills that the decent paying jobs require. Or he doesn’t have the initiative or ambition to really pull off a decent salary. Or he doesn’t look in the right places. Or he doesn’t network with the right people. Bottom line is he doesn’t bring in enough money for even our simple lifestyle. And so now recently, he lost his job again. And we are trying to live from my check and his unemployment check. And with this economy, and his lack of marketable skills, our high expenses, and at this point, his low confidence in himself, he isn’t finding
anything.

While many of the commentators mention the need for education and marketable skills (two important components of developing a career), I don't believe that the main issue for those who suffer from perpetual unemployment (mostly caused by QUITTING one job after another, no matter how "dumb" the job is) lies in the lack of education, networking, or marketable skills. I know janitors who have been with the same employer for decades, and I know PhDs who have left their jobs and flounder about aimlessly.

What I see is an underlying dissatisfaction with life in general, perhaps caused by depression. Sometimes I see a streak of entitlement. I see a hint of this above in calling the jobs "dumb". What could possibly be dumb about working and providing a service for an employer and others? The largest issue I see is the inability to cope: The inability to cope with one's own emotions, the inability to cope with other people, and the inability to cope with frustration, disappointment, and adversity.

Where a person has a clear history of quitting one job after another, I'm fairly certain that the solution is NOT education (either vocational or graduate), starting one's own business (doing what I'm not sure), or networking/job assistance (let's not forget that taking on a new employee is an investment that a business makes and that no investor wants a negative ROI). In fact, college itself can be used as a means of avoiding problems. Suggesting education for a person with such a job history may very possibly fall under the category of a "throw money at it solution".

Beyond any possible medical intervention that might be recommended (I'm no doctor, so I won't discuss such), I believe the first step for a person with a such a job history is to find and hold a job for an extended period of time, ideally within the 3-5 years period. It would be nice to find a job where the husband can develop some skills, but skilled or unskilled, I think the real flaw here is that a resume that shows job after job screams, I am unable to adapt to the workplace!

Employers do not "give" away jobs (and the sooner the frum world realizes this, the better off we will be). Employers "invest" in employees. The key to being able to get that next job after a less than stellar job history (whether you have no skills or a hold a PhD in Aeronautics) is to demonstrate commitment, the ability to function in the workplace, and some initiative and ambition. I believe that the solution to changing this problem is to get one's foot in the door and stick it out through thick and thin in an attempt to make the resume tell a better, or at least neutral, story.

KYA Update: The Moving Ball

As you may recall, a Guest Post by an actuary titled "AREIVIM and Why I Don’t Like It" seemed to have set off an internet storm, which I attempted to follow. The last thing I knew, before the storm settled was that in addition to a few endorsements being pulled from the websites, the KYA director, whom I was very interested in hearing from directly, was a no show on Zev Brenner's Talkline. Since then, I hadn't seen anything on the program until I started getting my Rosh Hashana mail.

Seems the program has changed. Originally, the plan advertised a $100,000 fund to be set up for each orphan that meets certain qualifications. The $100K principal was advertised to remain in tact, and the interest can be used to defray day-to-day expenses. Those who join the plan were to be charged $6/7 (Vaad HaRabbonim, Kupat Hair) per qualifying orphan up to a maximum. The math is clearly problematic. While there are claims of professional review, none have been produced.

Currently, the Vaad HaRabbonim Rosh Hashana brochure advertised:

"Each member family contributes $2.30 through a one-time credit card charge or standing bank order, in the event that the child of a member family is orphaned. The immediately produces a $50,000 fun for the child. The interest helps to defray day-to-day expenses, while the principal serves for wedding expenses."

So, the fund is now being advertised in the brochure as half the size with a payment (per orphan?) of nearly on-third for a half-sized fund, while the website continues to advertise a $100,000 with a $6 per orphan charge.

Clearly, the ball is in constant motion. My readers know how I feel: buy term life insurance from a reputable company. You will know what you are getting. Clearly the directors of Vaad Rabbanim aren't quite clear on what they are even selling.

Signing off.

Guest Post: Some Info on a Locale and a Guessing Game

The following post was sent to me from a reader who plans to self-identify. It is about a city the reader believes would be of interest to some of the Orthodox population. To keep it fun, the city is not being identified for now so readers can make their best guesses. Post follows (no edits, no commentary). Add your comments as the writer has asked a series of questions.

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Dear Orthonomics,

I am a young Balabos in a small outlying Jewish community struggling to overcome stability issues related to its small size -- I like to say we have 'barely one of everything' (1 each of Orthodox, Reform, Conservative and Chabad shuls, one Orthodox dayschool, 1 community Hebrew dayschool, 1 butcher, 1 baker, 1 Mikva, a small outreach Kollel, etc...)

Our community (and another similar one relatively nearby) is situated in a unique economic, political and institutional environment that should enable it to attract young Orthodox families facing all the major challenges ('crises') highlighted by your blog, namely the high cost of tuition, the high cost of living in Jewish areas, the poor economy, and the high cost of healthcare and college for large families.

Tuition:
*We are in one of the few jurisdictions where the local government pays a large portion (~$4000/year 'voucher') of the costs of (secular) education for private schools.
We are in one of the few jurisdictions where tuition at non-profit private schools is fully tax-deductible as a charitable contribution.
*Therefore, full Jewish daychool tuition is ~$7000/student/year (pre-deduction) and even lower on an after-tax basis.
*Additionally, tuition subsidies are made at the local Jewish Community Council level (schools actually get the money when families are granted subsidies). Guidelines suggest that families grossing under $100,000/year should pay under $12,000/year in total tuition.

Cost of Living and related issues:
*Reasonable (not low) cost of living and excellent social programs and policies for large families:
4-bedroom housing within walking distance of a synagogue (and ~30 minutes commute from downtown) starting at $350,000
*Reasonable (not-low) total tax burden for a middle class family.
*Very, very cheap decent healthcare (not tied to employer).
1-year child leave benefits (shareable between parents) including having your job held for you and receiving unemployment benefits during your time off.
*Very cheap, high-quality local colleges; decent public schools (if that matters).

Additionally non-Jewish factors:
*Extremely safe, clean and family-friendly city of about a million people, close to beautiful national parks.
*Local economy is pretty good given global situation; decent job market for white collar professionals and skilled trades.
*Family-friendly corporate environment (i.e. shorter/earlier working days than most places, typically high number of vacation days, etc...)

Additional Jewish factors:
*As a matter of reference, our OU-affiliated Orthodox synagogue is led by a seasoned an well-respected Rabbi of impressive scholarship and lineage. The Judaic Head of the Torah u'Mesorah-affiliated daychool is a Chofetz Chaim graduate. The outreach Kollel Rabbis are Lakewood/Gateshead educated.
*Good cooperation across spectrum of Jewish institutions; Orthodox-friendly community politics (aside from tuition subsidies, the mikva and kashrut certification is community-funded but Orthodox-administered).
*A small community allows for enormous lay participation -- lots of opportunities to take on leadership positions, Daven from the Ammud, Lein, teach your own class, etc...

Of course living in a small community has its downsides:
*No Eiruv.
*No kosher restaurants beyond the JCC cafeteria.
*The school is mixed-gender. Our community does not have a high school, although that could easily change if there were sufficient students (the close similar community mentioned above has one). Nearest boys-only Yeshiva (high school) is a 13-hour drive/$200 return flight away.
*Kosher meat, cheese and specialty products are expensive at local institutions (improving); you may need to bulk order from elsewhere.
*You are a multi-day drive/4-hour $500 return flight from any of the large Jewish centers.
The biggest issue is the stability issue related to the sustainability of small community size. The Orthodox dayschool currently has 43 children and survives on elbow grease, miracles and a few large donors. The synagogue has 100 member families (of which only 20 or so are observant). Twenty years ago (when I was growing up) the school had twice as many students and the synagogue at least 50% more families (although I would still have classified the city as having 'barely one of everything').

I think that the declining community size has been related to the general trend often-discussed on Orthonomics: the flight to large communities with many top-notch institutions over the recent boom years. We have always been a transient city with young families moving in, staying a while, and then leaving for larger Jewish centers as the kids grew older and they outgrew available institutions. The difference is that over the last few years families have been leaving earlier and have been less likely to consider a city like ours in the first place.

Now that the boom is over, and the sustainability of affordable top-notch institutions in major Jewish centers is seriously in question, there is a hope that we are in a unique position to attract a significant number of families looking for relief from the various Jewish crises. There has been discussion of a concentrated effort to actively recruit Jews to our city based on these factors.

I'm curious to hear Orthonomics readers' opinions:
*Would consider moving to such a city?
*If not, what's the sticking point?
*Given the current amenities, how long do you you think you would stay?
*What demographic do you think would consider moving here?

Any advice on how to structure a recruitment campaign.
*What are our chances of success?

I would appreciate it if you could post this to your blog.
Please feel free to email me if you have any questions you would like answered before you post.

"We Come to this Gift in a Position of Financial Strength"

Note: I just edited the posts as I didn't convey the content of the article correctly. Note to self, don't blog under the influence of lack of sleep.

Thank you to my reader (feel free to self-identify) who pointed out an article to me on a $15 million gift and added some point to ponder. The Solomon Schechter School of Essex and Union, New Jersey has received this gift from a alumni (a portion of the gift is dependent on bringing in matching funds, as is common with large gifts), the son of a founder of the school. The endowment funds are intended to ease tuition costs for middle-income families, enhance academic excellence, and improve the “bricks and mortar” facilities, school officials said. The fund (grant + matching funds) is eventually expected to spin off 1.25 million yearly for tuition assistance for 230 students.

Some interesting notes: The school has no debt! Their buildings are paid for. Hence the comment, "so we come to this gift in a position of financial strength." There has been a lot of talk of Endowment Funds in the Orthodox community, but (sorry for the gloom and doom), when we have mortgaged schools, Endowment Funds simply can't make a sizable dent in operating costs and tuition fees because the debt load is eating us alive. On a more micro level, imagine a scenario of two children each receiving a very large gift or inheritance from a parent, say in the $100K range. At the end of the year, the financial situation of the two siblings looks quite different. Why? Because one sibling used the funds to keep their family afloat, while the other didn't "need" the funds, but has now created additional income to enhance investments, education, and more.

Another interesting note is the tuition assistance method:

The school currently offers two kinds of tuition assistance — flat dollar amounts for middle-class grants (i.e., $5,000 for all middle-school students), which do not require full financial disclosure, and tuition assistance for those families requiring more significant aid. That process is more detailed and requires more disclosure.

Like the commentor who wrote me, I too have never heard a two-tiered method of dealing with tuition assistance. Certainly a method like this requires a great deal of trust in the parent body, but it is certainly a "kinder and gentler" way of providing more minimal levels of assistance. Interesting.

[Just a note to readers: I pulled yesterday's post off my blog, not because I had second thoughts about the discussion of Jewish philosophy as prompted by comments on VIN and a contrasting news story and an article on Cross-Currents, but because I received a comment for which I realized that the post and some of the underlying details would not being fully comprehended. As such, because of the emotional subject, I decided to pull the post down. I have so many interesting posts I'd like to make on financial issues, as well as a back log of guest posts, that I figured I'd just poll the post].

A Legitimate Need Too

The admininstrator of Beyond BT is seeking advice for a BT friend for which the son is marrying an FFB girl. One of the items up for discussion is how to deal with the (expected) "gashmius factor" of frum weddings. The couple has "no family support" and is looking for cost cutting tips and figuring out what is truly "indispensable."

I've written my own cost cutting wedding posts and featured guest posts from others here. But, what I would like to turn your attention too is advice that is commonly given when there are expectation differences when planning a wedding.

That advice basically reads as such: spend the money for the sake of peace, so that the chatan/kallah will not feel uncomfortable around her friends and feel *deprived*, or so that the in-laws with greater needs will not be embarrassed in front of their friends. Such advice was given by a BeyondBT commentor who writes the following:

[Those] with the benefit of a mature point of view, it is fine to say that the gift-giving is out of hand, trite, etc. And you are correct. But, please realize that often the Kallah is in the 18-22 year old range and lacks that maturity. It is important not to make her uncomfortable with her friends by depriving her of at least some of the jewelry she may be expecting. It can, however, be on the lower priced end of the spectrum (You might want to look into a treated diamond for the ring). But you don’t want to create a feeling of resentment that can last many, many
years.

And I don’t want to hear comments about how, if she is mature enough to get married, etc. etc. There are different levels of maturity, and sometimes we just need life experience to teach us about what is not important in long run.

While I certainly do believe that wedding planning between the couple (novel, I know to involve them) and their respective parents should be undertaken in the spirit of shalom and reasonable and prudent generosity, I want to present an idea that I have yet to see mentioned in discussions of how to approach the "gashmius factor." In nearly every discussion I've been privy too regarding wedding negotiations, there is recognition of the legitimacy of the needs of the parties that expects more. But, I have never seen recognition of the needs of the parties that would like less.

Certainly there is some recognition that money is limited and that a family might only have so much to give. But, I'm looking beyond that. I'm addressing the deep seeded values regarding consumption, ostentation, and modesty. Simply put, there are some families that just aren't comfortable throwing that type of affair. And, that holds true even if they do have the financial means to make such an affair.

Orthodox culture is not, by any means, the only culture that deals with the "gashmius factor." In fact there are populations that put on far more ostentation in their affairs. Try, if you can, to imagine that your own son or daughter was marrying in a ceremony for which the future mechutanim were high income, or even average income Indian family (average cost of an Indian wedding significantly exceeds the income range for a middle income family, sometimes many times over, not including valuables or cash given as part of the dowry), expecting to spend a minimum of mid-five figures and in all likelihood well into the six figures for a grand affair.

My guess is that even families who walk in lock step with what is expected re: Orthodox/Chassidish/Yeshivish weddings, would feel highly uncomfortable engaging in the over-the-top wedding spending patterns prevalent in certain Asian and Eastern cultures.

As such, I think it is important that when families sit down to plan a simcha, that they respect the limitations of the parties who don't care to walk in lock step with whatever is the latest and greatest for young Orthodox couples. For some, the gift expectations alone might be akin to asking them to procure an elephant for the wedding processional.

Reposted By Request: Flexible Spending Accounts

Below is an educational post I wrote in 2006 about Flexible Spending Accounts. Is it really almost that time again? I received a request to address the subject, so I am re-posting. Just a note that the new health care legislation will slash the health care FSA to $2,500 from amount employers normally allow, $5,000 although there is federal technically no limit.

Flexible Spending Accounts

The end of the calendar year is quickly approaching, and many employees are currently being asked if they want to fund a "Flexible Spending Account" (FSA). While the subject is relevant, I wanted to write a brief overview of these accounts, in addition to discussing their advantages and disadvantages.

In brief, the advantage of an FSA is the tax savings. The program allows an employee to put aside "pre-tax" money from earnings each pay period to help pay for two types of expenses:
1) Qualified Out-of-Pocket Health Care expenses and/or
2) Qualified Dependent Care expenses, i.e. childcare or adult dependent care expenses for qualified dependents that are necessary to allow you or your spouse to work, look for work (so long as you find a job and earn income), or attend school full-time.

An employee can put aside funds for one or both of these purposes, but funds must be designated separately for the entire calendar year. Both spouses can contribute the maximum amount allowed to their own Health Care FSA (HCFSA), however the amount allowed for the Dependent Care FSA (DCFSA) is limited per household.

Question: Just how much tax can you expect to save on your designated funds?
Answer: No less than 7.65% (FICA withholding that all employees are subject to) to upwards of 50%, although most will fall somewhere between 20 and 40%. To estimate your tax savings, add together your respective federal marginal tax bracket (ranges between zero and 35%), your respective state marginal tax (can range up to approx. 10%), and the 7.65% FICA withholdings.

Question: What Out-of-Pocket Health Care Costs qualify for coverage?
Answer: Basically all expenses except insurance premiums (e.g. dental and vision insurance) and items like over-the-counter vitamins. Of course, the list of allowable and unallowable expenses is a long and tedious read. But, before you go about designating your earnings, you should become familiar with it. [As of 2011, non-prescription, over-the-counter medicine and items like band aids will no longer qualify for reimbursement].

Question: What are the disadvantages?
Answer: The prime disadvantages are the following:
1) "Use it or Lose it" Whatever money is left in your account at the end of the Benefit Period (usually March of the following year, I believe) you forfeit for good. There are no refunds. This is a requirement of federal law.
2) If you are laid-off or leave your job without spending your account, it is gone forever.
3) The paperwork and record keeping. Proper documentation (receipts, bar codes on over the counter medications, etc) will need to be submitted with claims. Organization is key and those who lack time [or organizational skills] will suffer.
Update: Many companies do have paperless reimbursement for certain expenses like co-pays.

Question: Can I still receive a tax credit for my childcare on my 1040 Tax Return if I am using a DCFSA?
Answer: No and Yes. You cannot receive the tax credit for the amount you designated in your DCFSA, but the incremental excess amount that you spent beyond your DCFSA designation can be claimed. (It is a bit complicated, but here is an example: A household with two children can claim a credit on a percentage of $6000 in childcare costs or $3000 per child. If the family only designates $4000 to their DCFSA, they can claim a credit on the excess $2000.)
Note: The same goes for trying to deduct health care expenses above 7.5% of your adjusted from income on your Schedule A (Itemized tax deductions).

Question: Is it better to use the tax credit or the DCFSA?
Answer: It depends. Because a greater dependent care tax credit is offered to those with lower household incomes, some will benefit more from using the tax credit.

Question: Does my childcare provider need to be paid "over the table?"
Answer: Yes, yes, yes. Don't make your designation unless you know your provider is filing their taxes. You will need the Tax ID or Social Security number for your daycare provider or babysitter. Without this vital information, you will not be reimbursed. You also might want to make sure that your provider understands why you are asking for this information(!). [Regardless of your decision of whether or not you should use an FSA, your childcare provider should be paid legally].

Question: Is camp a qualified DCFSA expense? What about yeshiva tuition?
Answer: Day camp for a child 13 and under is a qualified expense. But, overnight camp is not, unless there is itemized billing for day services only! And, no tuition for an elementary school child does not qualify either. But, before and after-care services do if they are separately itemized.

Question: How much should I designate to my FSA?
Answer: Review your prior years expenses and estimate upcoming and new expenses [to come to a reasonable prediction of] future expenses, but be careful not to overestimate what you will spend because of the "Use it or Lose it" clause. Also, be very careful you only include qualifying expenses. You don't want to end up buying ridiculous amounts of over-the-counter drugs because you stand to lose a significant amount of money otherwise. [As of 2011, even if you are using 2010 funds within the grace period, you will no longer be able to buy over-the-counter drugs or a lifetime supply of band aids].

Disclaimer: Please do your more research if you have questions and read your enrollment forms carefully. This is a primer on the subject and is in no way a complete overview. FSAs are an excellent and legal way to make your income stretch further.

The Price of Smoking (and Tuition)

There is a popular tuition blog on which a poster proposed a "point system" for tuition assistance. It read as the form of a magazine quiz and if a parent exceeded the allotted points, they would be uneligible for reduction. I can't say that I was in agreement with the point value of each triggering item.

But, there is one thing I can think of that is such a tremendous waste of money (to say nothing of the negative health impact), that if schools were to withhold assistance, you wouldn't find me shedding any tears.

A 24 year old woman smoker will spend an average of $86,000 over a lifetime on cigs; a 24 yr old male smoker will spend $183,000. (link) Hat Tip: today's Dave Ramsey update

Time to smoke out this expensive habit.

Other Ways to Say "I Can't Afford It"

Sometimes we adults use the phrase "I can't afford it" to try to convey the message that we aren't spending on something. We might say it because we cannot objectively purchase such a thing. We might say it because it just isn't prudent to purchase such a thing. We might say it because we simply aren't spending that type of money. We might say it to fill in for the word "no" for whatever reason.

Some believe that using this phrase can induce anxiety in children, and where there are larger money issues I imagine that this can be the case. My own mother used the phrase often enough that when my teachers started talking about college, I was worried that (going away to) college--a near given since there were no Universities within commuting distance--would be far out of my parents reach. I never had any anxiety about my parents ability to afford food, utilities, a home, or many other things from needed shoes to some extracurriculars. But, I was convinced that college was simply out of reach. After all, they said no to so many other things that "everyone" else had.

In my parents defense, had they known that the 8th grade math teacher would try to scare us into higher academic performance by creating fears that if we were not straight A students with a boatload of honors classes and high SAT scores that we would never get into a top public University (we weren't exactly the wealthiest crowd of honor students), I'm certain my parents would have addressed the myths and facts of college admission and affordability sooner than later. Truly they were blind sighted. Being from blue collar backgrounds, they also didn't know that in more middle income segments of society, that the college frenzy begins as early as middle school.

For the most part, we try not to use this phrase in our home. I'm not worried so much about potential anxiety attacks if we were to use the phrase, but the phrase doesn't really work well for us, a middle class family, surrounded by more of the same. I believe that for families like us, the phrase is fairly meaningless to financially dependent children of all ages, if not somewhat deceptive.

We don't live in a time where money (or the equivalent) is visible and understandable. I can't point to the dollars underneath the mattress and explain that the $100 underneath the mattress need to last until the end of the month. Nor can I point to the cow in the backyard and explain that it only gives so much milk and therefore we only have so much milk to barter with/drink. Money is a rather vague concept when day-to-day transactions are mostly electronic. (This is a good argument for using cash as much as possible). Additionally, when credit is added to the picture, it is even more difficult to understand what "afford it" actually means.

Not only is money hard to visualize, there is a good chance that whatever the littler set asks for is actually affordable (so long as we simply define "afford it" in terms of the (electronic) cash being available to us). On top of that, most of us spend plenty and our kids see us spending plenty, and it makes little sense to tell them we can't "afford" whatever ridiculous thing they are asking for when we just dropped three times as much for something else. Where our children do understand that we have the money, I don't want them to think we are holding out, being cheap, what have you, on their accounting, or anyone else's accounting (a related subject is what to say to the myriads of organizations and individuals that call/knock on the door at all hours of the day and evening).

Since I'd rather not throw meaningless and/or slightly deceptive phrases around, here are some other ways to say "I Can't Afford It":

• "Just Say No." (E.g., NO I will not spend $600 on a pair of glasses frames. Period. End of sentence). Watch for an upcoming post for which this very subject.
• Say no while explaining why you don't want the item in the home period. (E.g., No I will not buy you a [fill in desirable toy or fashion] because we don't want this item in our home. . . ).
• Say no and explain that the price charged is beyond its value and invite the child defer their gratification and to search for a better value. (E.g., $60 is a lot to pay for a pair of tennis shoes. But they are nice, and I bet that if you watch the sales, that you can find the same shoes for $30).
• Point out that they can get much more for their money if they go somewhere else, (E.g., I see how much you like board games/craft sets. I bet you could get four games at the thrift store/consignment shop for the price of a single game at the department store).
• Just state the rules: "When we go to the grocery store, we are only going to buy what is on the list." "You are welcome to pick out whatever produce you would like for your lunch this week, but remember that we only buy produce that is $x per pound or less." "That is not in the budget for this month." Of course, if you state the rules, you should be prepared to stick to them too.
• When you do make a large purchase, say a newer car, mention that the car was purchase because everyone passed up things they wanted, leaving money available for such a big purchase.

Readers, what things have you said in place of "I can't afford it"? What things have resonated with your children? What other things have you said that you won't try to say again.