Owning Your Problem

I have to point my readers to a totally unexpected personal finance reflection, 10 Ways to Stay Poor Forever, featured on Budgets are Sexy by Ms. Adams. Ms. Adams, in the comments section, writes that social programs turned her into a government assistance junkie and calls her own life repugnant. What I like about this post is that the author has owned her problem. That is empowering.

I like this post because the author is taking ownership of her issue. Because it was so blunt, I originally thought it was a satire piece, but apparently not. In the 10 Ways to Stay Poor Forever, she manages to summarize months worth of blog material here at Orthonomics.

Since I can't cut and paste the post here, I will just summarize and you can head on over to the post yourself!

How to "Stay Poor Forever", the kitzur.

• Don't pay your bills.
• Rely on windfalls.
• Avoid manual labor, babysitting, and extra jobs.
• Spend your time chasing government assistance.
• Congratulate yourself on lack of a mortgage.
• Waste time finding yourself and your next career.
• Spend time on "work at home opportunities" and multi-level marketing schemes.
• Spend too much time shopping and finding deals, even though you don't have money to spend and a budget.
• Don't make realistic plans.
• Throw tantrums when you run out of money and celebrate a paycheck by spending money.
• And #11, a latte habit.

Some People Will Use Anything as an Argument for Vouchers

Priority 7, ACS, OST, alphabet and number soup. Once again the Brooklyn frum community is campaigning to have funding restored to child care programs that are heavily used by the Brooklyn frum community.

Yet in the fight to restore this welfare program, VIN readers of this Press Release and this Press Releases, readers who are fighting for restored welfare funding make the case for private school vouchers!

Here are two gems:

If you realy want to save money and get a better education, just give 1/3 of the money used for public schools as a voucher directly to the parents to use for school. Each public school child cost about $15,000 per year! Our budget problems would be solved!

--AND--

I haven't seen any comments putting this issue into the following perspective:

Religious families are denied equal access to public funding. Why are we being denied a free and appropriate education?

We have no choice but the foot the bill and pay school taxes and then tuitions for all our wonderful children (which we should never be criticized for having!).

Our children become productive citizens and assets to society!

Why are we being inhibited from
our right to give our children a religious education?!

This is unconstitutional--and we should be fighting with this cause!

This is assistance we as a community deserve and have earned!

Please contact me to promote this cause.

Earth to the commentators! You are beneficiaries of private (yeshiva) education. Government dependency among such beneficiaries is ridiculously high. This is not a convincing argument for school vouchers! If anything, it is an argument against private education. But I guess when you are fighting the good fight, anything can and will be used as an argument for vouchers. . . even the threat of cuts to welfare programs. Goodness gracious. There are no words for such ridiculousness.

Reply »

Like Drugs to an Addict are Loans to a Debtor

As sent to me by a reader from a listserve in a major NY community. . . . .

An amazing opportunity, I think not. How about an opportunity that could leave someone else holding the bag? I don't think it is a chessed in the slightest to help people live beyond their means, even if it masquerades as hachnasat kallah. Here you have a family holding 3 jobs between them and they still need loans to make weddings. This, my friends, is a good sign that the last thing you need is another loan. Clearly debt has become a way of life.

Giving interest free loans is a hallmark of Jewish society, but (in my opinion) using gemach loans as such is a perversion of a mitzvah and only serves to denigrate the mitzvah. Interest-free loans are not supposed to promote dependency, but promote prosperity. If they are creating dependency and working against prosperity, then something is wrong.

But, you have to love the CAPS and the exclamation points!!!!!!!!!!

We are A"H making a wedding for our daughter on June 12th .

we have an opportunity to take out a gemach loan for $5000 for only $100 a month ! this is very rare- usually they want $300 a month or more!

we just finished paying off a $1000 loan for $100 a month and we are almost done with another loan for $50 a month.

we are already used to paying $150 a month and we have 3 jobs between my husband and myself. we are very very confident that we can cover this loan !

It would be such a HUGE CHESSED if someone would be willing to co sign this loan for us? we have one co signer right now but we still need ONE MORE .........

we need to get the application in by this sunday?

Thanks so very much for your consideration !

If you want to speak to me email me and i will give you my ph# or you can give me YOUR ph#?

Maddening Dependency

Look like the New York Priority 7 after school voucher plan is finally going to be cut as of December 31, 2010. The representatives of select Brooklyn neigborhoods haven't let this welfare program for which the majority of the receipients are Orthodox haven't let it go down without a fight.

The latest press release is maddening. From the press release: " In fact, by ACS’s own admission, over 70% of children in Orthodox neighborhoods like Boro Park and Williamsburg are eligible for free childcare; however, only a fraction of those needy children actually receive it."

We know that the level of dependency is ridiculously high, but 70% eligibility for free childcare? I have no idea how ACS came to this figure, and I really hope it is highly, highly exaggerated. But even if it is exaggerated, it doesn't point to anything positive. I also find the reference to Chanukah in the article nauseating: "“On the last day of Hanukkah, we were hoping for better.” Gelt in exchange for continued and fiercely protected dependency, not quite the Maccabees of old or Yosef ensuring that the Egypt plan for the days of famine? With such references, I guess we can be glad that the wasn't slated for closure on the last day of Pesach.

They're Back

Mumps, that is, this time in the Talmudical Academy of Philadelphia (Hat Tip: VIN)

[11 months ago]

and the elimination of Priority 7 Vouchers.

Letters when out this week saying the program is on the cutting block. By all accounts, it looks like the Priority 7 vouchers are supporting more than after school programming in Brooklyn's Frum Schools, but providing a "voucher" of sorts.

Oy! Second 11th Hour School Closing

Lakewood's school year isn't getting off to a great start. Last week, Yeshiva Bais HaTorah (350-400 students) announced it would not be opening the day before school. Today, shortly before school opening, Yeshivah Keter HaTorah (150 students) has announced it too will not be opening. It has been reported (see Matzav and TLS and VIN) that both schools had not paid their Rabbonim in months. I believe that the administration approached Rav Matisyahu Solomon for a psak on what to do regarding the budget. Shortly after, the Yeshivah Keter HaTorah Rebbes approached the same Rav and received the same psak.

There are some (ridiculous) comments I feel compelled to address. One commentator at Matzav asks:

I don’t understand: Is it better to have hundreds of kids without a school than to have rabbeim not paid? The rabbeim are either way not being paid bec. now they are out of a job. But we have hundreds of kids without school!

I've been covering non-payment since the inception of this blog and one thing I have noted is that Rabbonim feel as though they cannot walk, which is something I believe every single one of us in private industry would do should our employer fail to pay us. Some, like the commentor above, dismisses the opportunity that Rebbes would have if they were not working for free! I don't dismiss opportunity and I am a firm believer that Hashem puts opportunities in our paths. For a myriad of reasons, Rebbes as a whole seem to be held "hostage" by non-paying schools and acting as a group, or unorganized union, gives them much more power to do what should have been done months ago.

it's broken writes:
when are we going to real;ize that our system is broken
people are floundering
no money for food
no money for shcool
no money to marry off their kids
no money period
even people with job
seven p[eople who both wife and husband are working
we need a new system
we need housing
we need aubsidized food
we need help to support frum families
most frum families are struggling
moist people are not making ends meet
how long will it take till people realize
how many more mosdos will have to close


After declaring the "system" broken, the commentor calls for more of the same---welfare. Certain segments of the Orthodox community are highly dependent: dependent on parents, dependent on government programs, dependent on tzedakah. If such communities want to start solving their economic woes, independence is the answer, not (more!) subsidized food. I'd start paving the road to independence with a remediation campaign. Clearly, there are too many who lack basic skills, from basic English and vocational skills such as typing, to a lack of analytical thinking.

I think all the schools should enroll their children in the PS. What would happen is that the PS would have no room, and be forced to contract out for third party vendors. At that point the recently emptied private schools can become the third party vendor and receive generous compensation much like TT does. This would help fund the english dept costs, and tuition can be brought down to pay for the hebrew studies alone. This would help everyone, as the State would have to give more state aid since there are more children enrolled. In worst case, this should be done with the girl schools if not with the boys.

More predictable stupidity! To the residents of Lakewood and other heavily populated communities, public schools can handle some influx and they will do what they have always done when there are population shifts, use resources as efficiently as possible (and government isn't where I turn to for lessons in efficiency!).

In the last city I lived in, the elementary school down the stree from me ran two kindergarten schedules. The first session of the day started at 7AM, the second session started at 1PM. At one time my (public) high school had a far larger population than when I attended. The school was opened right as the baby boom generation started to enter high school. The school did not build its campus to accommodate the incoming class. They build the high school to accommodate the predicated future high school population, not the huge amount of students that they needed to accomodate in the first 10 years after opening, and the school squeezed classes into non-classroom areas until the school populations returned to normal levels. Other public schools have concurrent year round schedules to accommodate students. Sometimes, high schools in the same district, only offer certain electives, extracurriculars, or vocational classes, in one location, although all qualified students can attend such a course if they provide their own transportation.

Perhaps if schools in heavily populated Orthodox Jewish areas would form their own "school districts" to increase efficiency, some of these problems wouldn't be hitting with such vigor.

HOW COME THE PUBLIC SCHOOLS ARE NOT CLOSING
OUR TAXES ARE FUNDING THEM!WE HAVE TO FUND OUR SCHOOLS, NO EXCUSES

The most intelligent comments are always in caps, right? I dare the commentor to leave his/her tax bill unpaid and see what happens. (A hint: the taxing entity can and will foreclose on your home).

UPDATED:

A comment from "Normal"
Yungerleit are paid 80 dollars per week only after being in Kollel for a few years [waiting list].
Women that teach are paid minimally.
For a family of eight children the tuition without camp is at least 28,000.00.
How are they expected to live?
Kollelim that pay higher wages should be welcomed into our town!

And pray tell, where in the world does this commentor think money for Kollel comes from? Clearly part of the massive remediation process needed must include an understanding of free market economics, wealth creation, and basic personal finance.

from destro613
maybe more tuition is needed

Maybe if we charge more for the same product that the average parent couldn't pay for to begin with, money will start to grow on trees? I think part of the remediation process must include the younger set running a joint lemonade stand with the older set. Any 5, 6, 7, or 8 year old who has ever thrown up a sign and a table in the front yard understands that charging more doesn't magically produce more. They don't need Algebra I to understand that functions don't always follow a straight line.

Guest Post: Debt is Harmful to All Those Around Them

With thank to my Guest Poster who would like to remain anonymous.

When my wife and I first started dating, we marveled over how similar our families are. Every time we spoke about our families and compared notes, it seemed they were more and more alike.

Looking back, it's amazing that it took several years before we discussed one key issue in which our families are as different as can be: finances. I come from a family where discussions about money, how much things cost, why certain purchases were or weren't being made, and budgeting and saving were the norm. We knew that money was tight, that yeshiva cost a whole lot of money, and therefore we had to sacrifice and spend money intelligently. We weren't poor and we weren't deprived, but we knew there were monetary limits and we had to live within them.

My wife's family is the polar opposite. Money is never, ever spoken about. And if it is mentioned, it is likely to cause a major scene leading one to learn very quickly not to bring it up again. It's not important how much something costs as long as it makes the purchaser happy. If you want something, don't wait, just go and buy it. Planning and forethought are unnecessary. If you're not sure which dress you want, buy all 3 and sort it out later. Suddenly want to visit family in another state? Buy a ticket and go.

This difference in attitudes has had dramatic effects on our respective families. My parents both work in good, but not great, paying jobs. But, because of their financial approach, they have managed to save a lot of money for retirement, have almost finished paying off their house, and are finally enjoying the financial freedom to travel. While my MIL does not work, my FIL works in the type of career where people immediately think they must be well off. Nothing could be further from the truth. They are drowning in tens of thousands of dollars in debt, have no equity and no savings (not even retirement), and spend their days and nights stressed out over whether the bank balance is high enough to cover the $100 payment just made to the credit card company over the phone after they threatened to close off credit or impose another fee.

It's been hard to get a complete sense of what my in-laws finances look like. As I mentioned above, they refuse to discuss it. But, you pick up bits and pieces despite their attempts to keep things secret. What's amazing is that while there were large financial mistakes that were made, the biggest contributor to their debt has been the many small, seemingly insignificant decisions they made along the way: spending too much for holidays, staying in nicer hotels, giving larger than necessary gifts for simchas, refusing to accept second best when purchases are made, and the like. When paid for on credit, those little purchases add up.

The problem with my in-law's situation is that their fierce desire to protect their family from their financial woes, is actually causing financial misery that they don't even see and that extends far beyond their personal issues. My wife is an apple that fell far from the tree. She is naturally frugal and saw the mistakes her parents made and didn't want to repeat them. Her siblings, though, are another story. Without having learned even basic financial responsibility they have fallen into the same patterns as their parents: no budgets, no planning, spend on what makes you feel good, don't seek out advice, and don't talk about money at all. Even when my wife asks them simple questions like, "Did you lock in the rate of your federal loans?" she is brushed off. They say she is stressing them out talking like that.

But, in the end, it's me and my wife who are really stressed out. Like when we hear something that leads us to think her brother is overspending and isn't paying off his credit cards in full every month. Or when her father jokes that it's good we have extra bedrooms in our house so they can move in when they're older. We worry how her parents will possibly retire, whether they really will have to move in with us, or what will happen if her father gets sick and they have no income. We worry that her siblings are following in the same path.

I'm not writing this looking for solutions. I just want to share our experiences and show how harmful debt is not just for those in debt but for everyone around them as well. Here, it doesn't just affect my in-laws, and it doesn't just affect my wife and I who may have to pick up the pieces down the line and possibly upend our lives to do so, but it affects their other children who never learned the skills necessary to make intelligent financial decisions.

More Economic Terrorism

I find the economic terrorism coming out of the Chareidi community to be particularly infuriating, especially in light of recent reports regarding the employment and state of poverty in this community. The Chareidi entrepreneur and business owner does not just have to deal with the usual headaches of red tape and tax. The Chareidi entrepreneur has to deal with self-appointed Vaadim that look to enforce standards of tzniut through duress. I believe this would be a bigger headache than dealing with just about any other red tape. Even if the business owner has secured permits, completed legal paper, and paid their taxes, the businessman always has to watch their back as idle and unstable men with plenty of time on their hands look to "enforce tznius standards."

Since I've started this blog, I've seen so many stories of businesses attacked by these self-appointed Vaadim. Anything relating to women seems particularly susceptible. In Israel, we've seen stories of clothing boutiques being threatened and even set on fire. A popular vocation for kollel wives in Israel is cosmetician services. But don't dare advertise your business in Modiin Ilit! The kehilla committee, has told publications that they are not to publish advertisements for eyebrow shaping, even if the ad is text only. Pharmacy and grocery stores in Israel face special challenges regarding kashrut demands and specific opening hours. Under normal circumstances the market would dictate things like opening hours or even having separate shopping hours or areas for which feminine products are to be secluded. But the Chareidi business man or the business man looking to establish a store in a Charieidi area knows that demands must be met even if the market might dictate a different policy. American pharmacy owners in areas like Boro Park or Lakewood also face similar challenges.

Even in America, a boycott was announcement when the owner of sheitel shop on the same street as Yeshiva Chaim Berlin refused the demand of some man to remove framed pictures (I guess this is better than requesting the removal of real live women walking around in the same sheitels).

So what is the newest report of economic terrorism? It regards an ice cream store (!)-- not a sheitel shop, not a women's education program, not a call center manned by Chareidi women, a cosmetician advertising eyebrow shaping services, a women looking to sell clothing, a woman looking to teach the arts to other women and girls, or a pharmacy being told to keep the pads out of public view or remove/cover a picture of a teen star (in a sheitel of her own no less).

As per this report published today, a new ice cream and candy store, Zisalek of Geulah, has found itself in the middle of a hashgacha battle and has faced protests regarding tznius, hashkafa, and ruchniyus. The store owner met with protesters and agree to institute the following to appease them:

1. The store won’t sell on Erev Shabbos after 1 p.m. ice cream that can be eaten immediately, such as ice cream cones, and will only sell at that point packaged ice cream that can be bought for families for Shabbos.
2. The store will not open on Motzoei Shabbos.
3. The store will close at 10:30 p.m. each night.

The store owner wouldn't agree to have female employees only sell to females and male employees only sell to males. (The quick way to bankruptcy!)

Running a business and making a profit is very difficult work! Profit margins in nearly every industry are normally very slim and adding demands that increase the most costly area of business (payroll) is sure to topple a business. To place demand upon demand upon Chareidi entrepreneurs looking to support their families in dignity is nothing but Economic Terrorism. The market will decide if it is in the best interest of a store to close at 10:30pm! The market will decide if it is in the best of the store to have an employee scooping ice cream after 1pm on Erev Shabbat!

I think it is obvious that self-appointed tzniut vaadim aren't the least bit interested in the financial health of their communities. (I'd argue that being self-supporting is integral to tzniut/dignity. "Hustling" certainly lacks dignity). Leaders, both lay and Gedolim, who are interested in the financial health of the community MUST tackle this issue with courage and allow businesses to function and prosper.

Required Reading: A Smorg of Economic Stats

The Jerusalem Post has a very interesting editorial titled Downhill, by the numbers. This report looks at numerous economic indicators in Israel, only one of which is particularly positive. I'm always amazed how new articles on my radar seem to continue a subject from a different post. This post provides more background on the outrageous statements made by Gafni which I posted about on Friday, In Other Words. . . It's the Man's Fault.

The article examines a number of economic indicators shared by the researcher Prof. Ben-David of the Taub Center for Social Policy Study who believes that the "findings show an unsustainable burden is being placed on the fewer and fewer Israelis who can contribute effectively. Reform is urgent, and it must begin with education."

Here are some of the economic indicators of note from the article:
*GDP: Israel had caught up with the G-7's rising rate by the 1970s, but has been slipping steadily behind over the past 30 years or so.
*Brain Drain: For every 100 British academic scholars at work in Britain, 2.1 British scholars had moved to the US. For France, the number was 2.9. For Italy, 4.2. For Canada, 12.2. And for Israel, 24.9.
*He gave me worrying figures on labor productivity – Israel had caught up with the G-7’s rising rate by the 1970s, but has been slipping steadily behind over the past 30 years or so. And then he described the related fall-off in GDP – the data that essentially governs our living standards: *Welfare: In 1979, 26 percent of Israeli families lived below the poverty line before tax and welfare adjustments. By 2008, that figure was 32.3% – a vast increase compared to the OECD countries that are his barometer, leaving Israel second only to the US in terms of the numbers reliant on the overburdened state system.
*Employment: Re able bodied men aged 35-54, non employment in the OECD averages 11.9%. Spain the worst afflicted at 14.5%. In Israel, the rate is 18.9%. In that age group, 27% of Israeli Arab males and 65.1% of haredim are unemployed.
*Growth of the Arab and Hareidi Sector: 1960, 15% of kids going into primary school came from the Arab and haredi sectors. By the 1980s, 26%. In 2000, 40%. In 2008, 48%. (The 2040 projection is 78%, but I prefer sticking to the known, not the unknown).
*Employment for those who don't complete high school: In th 29-54 age range, fewer than 10% of Arab women in that demographic have work while 70% of their counterparts with a degree have work. 90% of Arab men and non-hareidi Jewish men and women with degrees have work.


Ben-David points out that these stats are worrying in terms of sovereignty as a nation. Ben-David had a chance to meet with Porush to present his findings and address his concerns regarding education. According to Ben-David: "Porush responded that if only the haredim were exempted from IDF service, more would join the labor force – which is not born out by the data – and he disagreed on the haredi sector’s educational needs. His response was unacceptable. It won’t work."

The positive indicator is one that the religious community and the hareidi community can claim a great deal of credit for: "The average woman aged 15-49 in the OECD countries has 1.7 kids, he noted, with New Zealand topping the league at 2.2. The average Israeli woman in that age-range has three kids."

Read the entire article for Prof. Ben-David's commentary. Also, if you want, see Haaretz which also is covering some of the data.

Tzedakah Marketing Gone Terribly Wrong

For once I am nearly speechless. I've written about tzedakah marketing campaigns centered around promises of miracles. I've written of tzedakah marketing that is simply obscene given the target audience. But this method of marketing will now top my list as the most tasteless and irresponsible of them all.

To promote tzedakah by guilting people about saving for retirement and creating mass panic about investments? Wow! I'm not quite sure what to say except that this is really low.

How can anyone possibly say with a straight face that the amount that Klal Yisrael (read: the frum community) places into retirement is "staggering" unless we are referring to staggeringly low? [Quote: "Let’s consider the net sum placed by Klal Yisroel in IRAs annually. It’s staggering.] You could say that a staggering amount is spent on tuition as well as debt servicing interest, cleaning help, camps, dating, weddings, sheitels, manicures, clothing, and even food. But retirement savings? No way, no how. I know highly paid professional couples that don't pay cash for their cars/minivans. Let's just say staggering[ly high] isn't the way I would describe the savings rate of the frum community!

A GUARANTEED INVESTMENT
Dear Editor,
I would like to suggest an excellent and fully guaranteed investment vehicle for this year’s IRA contribution. It’s called Klal Yisroel. It’s the oni who knocks at your door, it’s the local yeshiva that can’t pay their rabbeim, it’s the neighbors who can’t afford to make a wedding for their daughter, it’s the people in your community who have had their electricity shut off, it’s the many people facing eviction from their homes.

Let’s consider the net sum placed by Klal Yisroel in IRAs annually. It’s staggering. Can we collectively really afford to place that money in an investment that either will make or lose money, in an investment house that may or not be in existence when we retire? Is this prudent at a time like this? Can we find a better investment for our IRA? Permit me to present my suggestion:

Safety & Return: Hakadosh Boruch Hu Himself guarantees both the security of the
principal of our tzedakah investments, and a substantial return as well. To cite just one of numerous sources for this, the Torah tells us, “Aser te’aser es kol tevuas zarecha” (Devorim 14:22). Rashi tells us, “Aser bishvil shetisasher - Give tzedakah so that you become wealthy.” Rashi, with his ruach hakodesh, reveals for us the path to financial wealth. There are far more sources that can be cited to bring home the same point, but permit this one source to speak for them all.

Limits: We are free to invest as much as a chomesh, one fifth of our income, toward this guaranteed investment. “Beshuv Hashem” (Tehillim 126), once we have returned to seeing things with clarity, only then will we realize that “hoyinu kecholmim,” we were like dreamers. We were so wrapped up in our faith in the US banking system, which is weak, and the investment houses, many of whom failed and the rest of whom are weak, and had so much faith in the strength of America (uninvited guests dropping in on the President of the United States in the White House), that we completely lost sight of reality. Our faith was misplaced.

My friends, we’ve all been fooled. There is no stronger guarantee than the Torah, and no stronger Guarantor than Hakadosh Boruch Hu. Let’s begin by taking any
money we were going to place in IRAs this year and invest those dollars in alleviating the tzaar of Klal Yisroel. May I suggest we call the local yeshiva rather than waiting for them to call us? Let’s inquire whether the rabbeim and other staff members are up to date in their pay. Let’s take a deeper interest in the plight of the aniyim of our
community. Is there a local tzedakah fund that we can contact? Our rov probably knows which situations require the most immediate assistance. Let’s take a
deeper interest in aniyei Eretz Yisroel. The next time an oni knocks at our door, let’s try a little harder to focus on his plight.

Now, I’m not advocating a reckless abandonment of the US banking system. Rather, I’m suggesting that we place our IRA investments in a far better and more secure long-term investment, shoring up our more pressing needs right here in ouro wn Torah community.

These concepts are not new. Rather, they are the oldest and most proven concepts
in existence. Let’s be mechazeikeach other to reevaluate our priorities.
[Director of] Tomche Shabbos of Rockland County

Perhaps in response to the verses quoted I will quote birchat hamazon, "Please, Hashem, our G-d, make us not needful of the gifts of human hands nor of their loans -- but only of Your Hand that is full, open, holy, and generous, that we not feel inner shame or be humiliated for ever and ever." Yes, we have a lot of very pressing needs in our communities. And one of those pressing needs is financial stability.

Where will these families turn when they are no longer able to work? That's right! Us. And a note on the 20% rate we are allowed to give. There are many different opinions as to what ma'aser can be used for. Those that count tzedakah and tuition or partial tuition as ma'aser likely need not worry about hitting that 20%.

Trying to guilt people out of putting a little something away for their own future needs: Tasteless and irresponsible.

And with that note, a friendly reminder that you have until tax day 2010 to fund your IRA or ROTH IRA. In a recent post, the letter writer looking for solutions stated: "At this point, we need a lot of money just to get by, no matter how simply we live. We have children to feed and our expenses are only growing." If she only knew just how expensive older age can be she'd plotz. Having some hands-on knowledge about such things I will state unequivocally that we NEED community members to be saving for their future. Aging isn't inexpensive.

First Response to the Young Couples: Just Downright Mean

I have to say I am a bit disappointed that this letter below is the first to be published by the Yated in response to the young couple that wrote in recognizing that the "help" they received from their parents turns out to be of little help at all. I think I might have to edit and send in my own response for publication in hopes that some advice be published that is not only practical but sympathetic.

Clearly the newest letter writer does not understand that the parents did more harm than good by helping. Had the parents NOT lavished them with financial support and a monthly check that I think is one of the most terrible ideas out there, these young couples would have likely been able to see that their situation was headed out of control far earlier and they would have been able to take steps that are far more difficult to take at a later stage in life. It is far easier to correct financial missteps before having 2 or 3 children.

Now a handful of kids and a large mortgage later, their hands are essentially tied. It is very difficult to go out and rent a basement apartment or even a small apartment because of limitations on the number of occupants. If they had been renting that apartment before the children were born the children would be "afterborn." If they do default on their mortgage and leases or car loans, the default might not just cost them their good credit, home, and/or car, but the possibility of future employment opportunities and advancement as employers today are more and more likely to run credit checks for employment, security clearances, and advancements in jobs where the employee is responsible for handling money.

This isn't about managing without a bugaboo, which the smart couple will sell or consign. This is about finding out that the entire lifestyle that served up on a silver platter was an illusion and picking up the pieces. Personally, I find it far easier to put together the pieces going forward than to pick up the pieces going backwards.

I'd rather be the couple in the rented apartment without support than the couple with the far too large mortgage who just found out the well has run dry. The letter writer didn't come with a " 'tude," just questions about where to go a handful of kids later when no one ever bothered to fulfill the mitzvah of teaching the son a trade? Giving mussar to these couples about their obligation to be supportive of their parents trials and tribulations and saying other people have worse problems is rather cruel in my opinion. If anyone should be getting mussar, I think it best to direct that mussar at those who perpetuated this mess.

Recommended reading: The Millionaire Next Door which takes a look at the spending habits of the truly affluent (i.e. those who don't overleverage themselves and their children) and the differences in income an spending between those who were given "economic outpatient care" and those who were not.

SPOILED
Dear Editor,

Thank you for your amazing newspaper. I greatly look forward to it each week.

I’m responding to the letter which discussed certain young couples who aren’t sure what to do now that their parents are in a financial crisis. For some reason, I’m not too sympathetic. Welcome to the real world in which not everybody has money. Appreciate that your parents were generous all these years when they supported you lavishly. Lots of couples start off their married lives with almost nothing and don’t have rich parents to support them. They could be your neighbors, coworkers or friends. They don’t have fancy houses at the outset of their marriage, they live in rented apartments.

Now that your parents are going through some hard times, be sympathetic and supportive instead of complaining. Believe me, you can manage without your Bugaboo stroller and designer clothes.

Now, I really don’t know your individual circumstance and situation, but please. These should be the worst kinds of problems that anyone ever experiences. Frankly, I’m a little disgusted by the whole thing.
Sincerely,
L. Y.

What Now? Unpopular Advice for Young Families that Will No Longer be Receiving Support

This letter appears in the Yated and I'm hoping that somehow the advice I am going to try to offer will make its way into the circles wondering "what now?" I want to make it clear from the outset that I realize that the advice I offer isn't going to be popular, nor are the solution I offer going to be easy. And the advice might even appear to be insulting. But, I'm trying to deal with the numbers for those who see no solution while their life seemingly crumbles around them.


THE FINANCIAL CRISIS: HOW IT AFFECTS THE YOUNGER GENERATION

Dear Editor,

As we are all well aware, the world is falling apart financially. Yesterday’s millionaires are poverty stricken today. The lists of tzedakah organizations are endless, and there aren’t any more donors. I can’t imagine anyone possibly saying they haven’t yet been affected by this crisis, because we all have.

I am writing this letter on behalf of the younger generation. For those of us who are married for about five years (give or take) and have around three children, our lives are really “just starting” in a way, whether our husbands are in kollel or not. At this point, we need a lot of money just to get by, no matter how simply we live. We have children to feed and our expenses are only growing.

When many of us got married, our parents and/or in-laws were wealthy. They bought us whatever we needed. They told us “Yes” to whatever we asked for, they agreed to buy us a more expensive house, and they leased us the nicer cars. It was all working perfectly. There were no problems.

Now, however, things are different. Our parents’ finances have changed drastically over the past two years. They can’t give us what they used to, and we now have huge mortgage payments, car payments and child care expenses with no way to pay for them. Although the women may have degrees, the husbands have nothing. They have no way to make a decent living now. No one ever thought about the future, and we didn’t have to, because we were rolling in dough! The husbands don’t have the time or money to start a business or go to school at this point. They need the money now, and the wives can’t work so hard anymore, as they have large families to take care of.

This letter is not coming to blame anyone or to sound ungrateful. Parents, we are so thankful for what you’ve done for us and we have no taanos that you can’t give us anymore. We’re just
asking, what should we do? What is the answer? How are we supposed to manage?

There is probably no answer to this question, but one thing I can say is that when my children get married, I’ll probably do things a lot differently. Maybe the way we’ve done things until now didn’t make as much sense as we thought they did…

Sincerely,
A Grateful Child
Strapped for Cash


A few comments before the advice comes:

*I've written before about my thoughts on better and worse ways to help adult children, and I believe a monthly check is possibly one of the worst ways to help adult children. I think this letter further reinforces the pitfalls of monthly support (especially where the money was not actually available indefinitely). I believe that monthly support feeds into an inflated lifestyle due to its normally fluid arrangement, often I comes with strings of dependence, and it hides many of the warning signs that a financial situation is headed in an unsustainable direction. Hence, where support is offered, I think it is best to either make a lump sum gift(s) or fund a specific purpose such as college, funds to start a business, etc.

*Note the language regarding these wealthy parents, "Yesterday's millionaires are poverty stricken." I believe that what the writer is referring to is Hashem's hashgacha over our financial lives, a concept I firmly believe in and a concept that is pivotal in a relationship with a personal G-d. That said, I continue to hear and read about wealthy people who are no longer able to put food on the table and make their mortgage payments. I certainly don't intend to rub salt in wounds, but I hope we take a lesson from the current status quo and start to understand that an over leveraged lifestyle that indicates "wealth" is possibly an illusion.

*Re: "The lists of tzedakah organizations are endless, and there aren’t any more donors." This I believe and I hope this letter helps those who administer tzedakah agencies that it is critical to shorten the lists by funding first things first. I am still amazed that I am receiving solicitations where apparel, sheteils, and pricey sheva brachot for a kallah is mixed in with basic food for families that have no bread on their table! Incredible. But more on that later.

Now, let's talk about solutions. The writer seems to think there are no real answers. And, I'm almost certain that these answers would be laughed at and dismissed out of hand. But, I'm just going to present them anyways. I'm always thrilled when I receive emails from readers of this blog who have taken some of my advice and reported a positive change!

From the outset I think it is important to emphasize three things: 1) Some solutions I might suggest to piece together the puzzle are short-term. Short-term solutions may be unpleasant, perhaps very unpleasant. But, sometimes you have to plug the holes up before draining the boat. 2) I am not going to suggest taking on more debt or any "juggling act" to deal with the problem. Others are free to suggest such solutions in the comments. It isn't my style. My apologies. 3) It is an obligation for a father to teach his son a trade, so I don't think it is beyond the scope of this post to suggest that the parents who provided their children with all sorts of luxuries before fulfilling a most basic Torah obligation now help pick up the pieces.

So here we go in no particular order:

1. Complete the Role Reversal. I'm starting with the most offensive solution first! As the writer mentions, the husbands are ill trained and ill prepared for working, the wives are overworked by their growing families [and careers], and the expenses (including childcare) are out of control. The kollel lifestyle is extremely inefficient when it comes to preserving income. While many a kollel wife/husband has argued that stay-at-home-mothers also are part of a single income arrangement, the situations can rarely be compared. Normally the stay-at-home-parent does not have massive childcare expenses as their job is to take care of the children (!) and maximize the earnings of the income earner through frugality and availability so that the income earner can advance in his/her career by being able to work late into the night or travel where necessary.

Where the wife is already established in a career, a family may be well served to teach convert the kollel husband (or underemployed husband) to a "stay-at-home-dad." Short-term solutions are going to be about maximizing every dollar and putting away cash so that the long-term can be tackled.

I don't think many men have envisioned themselves as a homemaker (Mr. Mom) and I am fully aware that many men lack the skills, and desire for that matter, to run Daddy's pre-school, Camp Daddy, clean the home, cut the coupons, bargain shop, and engage in frugal cooking. But, minimizing large expenses is key. And, no matter how you cut it, day-care, preschool, and camp are large expenses that likely have to be cut out of the budget.

So there you have a possible short-solution to (significantly) increase cash, which I am labeling as "completing the role reversal." Of course, in a full role reversal world, the bargain-shopping, frugal cooking, Super-Dad would be able to roll into the hospital, birth the baby, and be back to running Camp Daddy within 2 weeks of giving birth. But at the very least, wives like the one who wrote this letter, should get a bit of relief.

Like I said before. . . . short-term, short-term, short-term. I believe Hashem designed the world with different roles in mind for men and women. On a long-term basis, this solution would likely be detrimental to the these familyfamilies. But, going broke can do that too.

2. Start from Scratch. The writer mentions leased cars and mortgages that are too large to handle. An important concept in business is to know when to stop throwing good money after bad. The leased cars can clearly go. In some cases they will have to be replaced by a "clunker." Just remember that many a tuition paying parent has driven a clunker to get from point a to point b to make their own ends meet.

It is difficult to imagine selling a home, but sometimes this is a worthwhile solution to investigate, especially where the mortgage payment can be traded in for a far lesser rent payment (although that will likely mean bunking up for quite a while).

The writer mentions cars and homes. She does not mention other assets. But chances are good that the parents who said "yes" to everything spent a tremendous amount of money funding the laundry list of engagement items from jewelry to silver, to say nothing of "push presents," fancy strollers, designer clothing, and sheitels. I try to listen to the Dave Ramsey Friday Show online while I cook for Shabbat (Friday is the day where people call in to scream that they are debt free), and have learned just what an impact a garage sale can have in getting the dominoes to fall while trying to get out of a sticky financial situation.

I certainly think that where expensive items can be converted to cash to change the financial footing, it should be considered. I understand that some of these items are sentimental and that I am stepping into sensitive territory. But if you need to rid yourself of the expensive lease and have something to pay for the clunker, or get rid of credit card debt, or actually come up with cash to start a business and/or fund a college/vocational education, it shouldn't be dismissed out of hand. Cold hard cash is helpful.

3. Different shifts. Back to eliminating those pesky daycare expenses, working different shifts can be tough on a marriage, but can be another good short-term solution for increasing cash in the short-term. I know of families that have arranged for long-term telecommute positions and other families that juggled children and graveyard shifts, all while keeping day care costs minimal. Those of us whose parents and/or grandparents owned small businesses likely spent a good deal of time being cared for on-sight. Once again, this is far from a desirable situation. But, in the short-term it can make a large dent. Of course, the long term solution is not just about cutting expenses, but increasing income.

4. Sharing resources within the family. I hate to place more work and responsibility on grandparents, but it seems to me that where the grandparents created a dependency situation, that playing a role on reserving the situation might just be the right thing to do. I do know of a number of kids with kids that have moved back in with the parents. Normally both the parents and grandparents are thrilled when such a situation ends!

I do know a number of grandmothers who provide unpaid daycare. Creating cooperative arrangements between siblings from the same families is another way to work together. Any such arrangements should be as formal as possible. Open ended arrangements are partially what got many of the families in these situations into trouble. So many grandparents look worn out as they care for little ones. And I know it isn't easy for these grandparents. I wouldn't make such a suggestion where an education and opportunity was provided. But where it was not, it might be worthy of consideration.

Siblings can also enter into agreements of their own. I recently met a mother who was out and about with her kids and her sister's kids. Turns out that the sisters share a purchased home (perhaps a duplex?) and everyone shares the childcare arrangements while the husband's complete their schooling and residencies. I believe that the wives each work part time. She told me that the arrangement is tough at times, but it is the best solution for them at this point.

Read about cooperative camps here. Such arrangements can be tremendously helpful in minimizing large expenses.

5. Don't lay down and play dead! The writer states: "The husbands don’t have the time or money to start a business or go to school at this point." Please, for your sake, stop making excuses because it is holding you back! You are young. You are healthy. You can make a dent in your situation. Don't convince yourself that you can't do anything at this point because plenty of people have changed course in life. But I do suggest getting out there and asking questions, listening to people, cooperating other families. The solutions aren't going to come from people who are in lock step with the thinking that has brought a good number of people to the place they are in now.

I'm going to conclude now before touching on any other sensitive subjects. We can deal with those in a future post. I'm also not detailing long term solutions as I think that it is fairly obvious. Also obvious is that tuition is a HUGE problem for these families and everyone else for that matter. Part of alleviating that problem will be to lessen the tzedakah roles and move people from dependency to work.

Commentors: offer up your own solutions and experiences in turning around a touchy situation. I have no monopoly on solutions and there is plenty more to talk about.

Social Ills and Dependency

I have some posts in my lineup on tuition, but I'd prefer a diversion of sorts. (Sorry, it isn't a big diversion).

Rabbi Wein has published a most fantastic article titled No Free Lunch. The economics of human behavior is inescapable and for a long time I've been saying that you can't create a dependency class without experiencing the ill social consequences that come along with dependency. This is why, even if we had unlimited resources, I wouldn't fund my children's every desire, whether that desire be some gedolim card collection or the avoidance of making a living because I simply don't believe it is good for their development. Certainly our sages recognized the dangers of dependency, idleness, over consumption, entitlement, and reversing gender roles.

If I was an Orthodox economist living 30 + years ago when the community embarked upon some of the current practices that permeate the scenery today, I hope that I would have tried to sound the alarm because regardless of the economic climate, many of the practices that are commonplace, certainly aren't commonsense.

Rabbi Wein brings his own touch to the message that you can't have "a free lunch is always present and eatable without later consequences." He touches upon dependency, governmental arm twisting, fraud, dependency, kollel, (lack of) employment, begging, and dysfunction. . . basically all of the Orthonomic subjects we talk about here.

And this story is just so illustrative. Here is what happens when the only "trade" you teach your children is begging:

I am aware of a case where a man who traveled often to collect money solely on his own behalf, when he passed away, the asset that his sons fought about and actually contested in a rabbinic court was his list of donors. A generation brought up to believe that there is no
necessity for it to work in order to make a living for one’s family is doomed to a spiritual and social disaster - and eventual self-destruction. There is no free lunch for anyone in this world.

Classic!

Heed these words and try to spread the wisdom. You can't escape the ills of dependency anymore than you can escape the laws of physics. Of course, there are those in the klal who think frum Jews can escape all of the above.

And, while I'm at it, I can't help but point out another article that relates directly to the subject at hand. The JPost has an article titled "Most haredim want secular higher education, survey finds." The study quoted basically shows that haredim are interested in higher education under certain conditions. Fine and well.

But the interesting part of the article to me is the disparity in desire between men and women: "63% of female respondents said they would, while only 41% of males were interested. "
Hassidim were more open to secular learning, with 59% answering in the affirmative, while only 42% of the Lithuanian respondents said yes.

Note the 22 point difference between men and women answering in the affirmative. I imagine I can't make any scientific declarations as the study did not concentrate on the disparity, but I can't help but think that the men have become far too comfortable with the gender role reversal and dependency. I believe it is a very natural, masculine quality to want to work and support a family. But it seems that normal inclinations have been broken and many men have been emasculated. I can't help but think about the commentary on what the slavery in Mitzrayim entailed. One commentary, as I recall, states that the slavery consisted on having the men do women's work and having the women do men's work.

Also note the difference between Hassidim (male and female inclusive) and so called Lithuanian respondents, a 17 point difference. Here too I believe we are seeing the effects of dependency.

Comment away.