Copyright timesofisrael
Stacey Zrihen is a Certified Financial Planner and motivational speaker. She is the Senior Director of Coaching for the Orthodox Union’s Living Smarter Jewish and Achiezer’s Westwood Management Program and has helped thousands of Orthodox families manage their finances. I had an opportunity to speak with Stacey about some of the challenges many young families are facing, despite earning a high income. Below is a transcript of the interview: Many Orthodox Jewish families earning what would be considered high incomes elsewhere still feel financially stretched. From your experience, what are the main factors driving this phenomenon? Simply put, Orthodox Jewish families have a lot of non-optional expenses that mainstream Americans do not have … private school tuition, kosher food, living in neighborhoods that specifically have Jewish communities. Additionally, we tend to have larger families. Where the average American family has two children, the average Orthodox Jewish family has three, four or even more children. We also pay for private camps. We also make costly weddings and bar mitzvah celebrations, and each of these things in part adds to the extreme financial burden for Orthodox Jewish families. Day school tuition is often cited as the single biggest strain on Orthodox family budgets. What strategies do you recommend to parents who want to provide their kids with a Jewish education but feel overwhelmed by the costs? I think we sometimes forget that sending our kids to a day school, while it is a necessity for us, is also a luxury … and we need to accept the fact that we may not be able to have as much available income for other luxury items. That being said, I have to say that I have never seen a yeshiva or Jewish day school turn away a family because they could legitimately not afford enough tuition for their children. Almost all the schools have tuition committees which are careful to make sure that all local families can send their kids to a day school. Thank God, we live in a very generous Jewish community, so even though there are families who struggle, I think the day schools are aware of that — and they are working with those families. How do you help families distinguish between genuine communal or religious necessities — like kosher food and Shabbat expenses — and lifestyle choices that might be adjusted without compromising Jewish values? I think that managing the bare minimum expenses is not what’s getting us into trouble. The biggest challenge that we are facing is the fact that we almost always live in communities that are socioeconomically integrated. In the broader United States population, most communities and most schools are divided by economic background and economic status. In the Jewish community, it is common to have 20 children in a classroom where five are from families that are earning lots of money ten are more middle class, and five are struggling terribly. And while it’s a beautiful diversity, it can also cause difficulty for families to have a very clear vision of what exactly they need to be spending. It is very hard, especially for children, to try and balance that with their peers. The cost of weddings, bar and bat mitzvahs, and other celebrations can add up quickly. What advice do you give families to plan for these lifecycle events responsibly, without feeling like they’re shortchanging their children or community expectations? My first piece of advice on this is a quote from Rabbi Moshe Hauer, z”l, who said that a bar mitzvah is not a surprise party. One of the biggest mistakes that Orthodox Jewish families make is that they start thinking about these events when they’re right around the corner. If you can be diligent and put away small amounts of money over the years, you will often have enough to pay for a simcha. Planning ahead is critical. That being said, I think if you don’t have enough to spend a lot of money on these different events, you can compensate very often with creativity. Some of the nicest simchas I’ve attended have been ones that cost a fraction of what some of the more lavish events cost. They require a high confidence level and comfort level on the part of the parents and the children to really feel good about what they’re doing and in the decisions they’re making. Many families are so focused on paying current expenses that they neglect retirement savings. How do you help Orthodox families balance present obligations with long-term financial security? This is one of my favorite topics. I cannot emphasize more the importance of a written budget. In my opinion, the written budget should be started as early in life as possible. And by this, I mean simply keeping an Excel spreadsheet with your expenses and your income each month, written down prior to the month starting. I find that couples and individuals who do that have the best outcomes, regardless of their economic status. I think that if you can get into a habit of really understanding what you need to be earning and spending, you will gain the ability to control that spending and saving. It really puts you in the driver’s seat to be able to make good decisions, whether it means needing to earn more or whether it means needing to spend less. I think that a written budget is irreplaceable in terms of people being able to make conscious decisions about future expenses and their goals for their family. One of the things that I hear often when I get a call from a couple is that the family makes very good money, but at the end of the month there’s nothing left and they are not sure why. If you have a written budget, the one thing I can promise you is that you will know why — you’ll be able to see what’s coming in and what’s going out … where the discrepancies are and where, if possible, any changes could be made. There’s often social pressure in Orthodox communities to “keep up” — whether it’s with schools, neighborhoods, or lifestyle. How can families navigate these pressures and set realistic goals? Being able to spend only what you can afford requires a lot of confidence. I get the question a lot about children who are asking their parents why they can’t have things that their neighbors have or their friends have. Why are they going on vacation? Why do they have a new kitchen? Why did they have a huge bar or bat mitzvah? I’m not a parenting expert, but the one piece of advice I always give to parents is whatever you give over to your children must be done with confidence. What do I mean by that? I mean that if you look at your child who has just asked you such a question, and you make a face and you say, “Well, we don’t have so much money, and they only do because their grandparents are taking them.” If you have a negative view and you’re a bit sour about it, your child will absorb that right away. However, if you look your child squarely in the eye and say you’re right, there are things that your friends were neighbors can do that we can’t do, but you should be so proud of us, because the decisions that we make are in line with what we are able to afford, and we want to make sure that our family is financially healthy for many years to come. So, the decisions that we make are in line with what we can afford, and as a result, we are proud of ourselves … and you should feel confident that you know mom and dad are moving in a good direction. When a child hears that from a parent, and sees that attitude, and sees that the parent is super comfortable with where they are in the world, then suddenly this child feels that the parent is in control and that they’re in a good place and they don’t have to be anxious or worried. And the fact that they can’t go away on this trip is not indicative of a terrible situation. It means that this is where we stand and this is what we’re able to afford. In some Orthodox communities, there are traditional expectations about gender and work. How do these norms impact financial planning, and what trends are you seeing in terms of more women taking on income-generating roles? I’ve actually seen huge changes and advancements in this area. When my children were small, I was one of the only women working at that time. That’s not what I’m seeing at all now. I think it’s understood that the women are going to be working, and in many cases earning more than their husbands. I think for most families, it’s just become too expensive for one spouse to be home, so I think we’re really seeing mostly two-income families. The old gender role that I remember of dad going to work and mom being home with the kids is not the norm right now. Many Orthodox families rely on scholarships, gemachs, and community tzedakah funds. How should families in need manage these resources responsibly, and what role do you think communal institutions should play in addressing affordability? This takes me back to my good old written budget. As those on scholarship committees can attest, if somebody is showing you that they have responsibly looked at their numbers as to what’s coming in and what’s going out, and if they are honest with themselves about what they’re able to earn and what they’re able to cut or not, it becomes clear for everybody as to what the true need may be. Once those numbers can be looked at it, it becomes much clearer to both sides where the right sweet spot is for that family, whether it’s tuition or assistance from the community or anything else that might be needed. In addition, I think all the institutions that are giving out money should require a meeting with a financial coach so that the client can submit the actual figures that they’re looking at. Also, if there are parents who are giving money to adult children, it should be done in conjunction with a written budget where everybody knows where everyone stands. That way, when funding or such support is no longer being provided, the family really understands what they’ll need to earn to make up the difference. How can parents teach their children — especially in large families — healthy financial habits and realistic expectations about money, when so many of the expenses are community-driven and non-negotiable? It’s important to distinguish being open with your children about what things cost and telling them what you earn. I think it is very important for parents to have privacy regarding how much money they earn and how much money they have. I don’t think that is a child’s business, even at older age. However, I do think that talking to them about finances and what things cost should not carry a stigma. You can discuss little things with your children, such as what dinner costs each night or how much homes cost in an area or other things that you see. I think giving a child an allowance from a young age is a wonderful helping tool. If young children know that they can buy something because they’ve saved money, it becomes a tremendous boost for them. I think the young people who are in the most trouble are the ones who have been swiping a credit card that belongs to their parents for years and years, and the moment that that support ends, they just sort of look around and have no idea what’s going on. If families can encourage children to take responsibility for their own savings and expenses, even if it’s in the form of an allowance where parents are giving money to children, and those children are then asked to manage that money, that’s how you want them to learn. I would rather learn that my 10-year-old doesn’t have a clue how to spend money when he takes all $25 out of his bank account and buys some stupid toy then I would to have my 30-year-old make a silly purchase of a much bigger magnitude. I certainly love the open discussion about finances and what things cost, again drawing the line at specific information about earnings that I don’t think parents need to share with children. If you could make one systemic change — in schools, community norms, or government policy — to alleviate the financial burden on Orthodox families, what would it be? One of the things that I am generally in favor of is a school uniform. I think that removes a lot of pressure for parents of school children. I also think vouchers could be a game changer and is a fabulous idea. I’ve never been a fan of requiring everyone to spend the same. I don’t think that’s realistic, and I don’t think that we need to teach people to be comfortable with what they have and what they can spend by punishing people who have more and want to spend more, which is their prerogative.
