Making the Ends Meet the Means

Alexandra Fleksher’s recent Perspectives column titled “Fuzzy Math” highlights a longstanding yet intensifying issue in our community. Large families, large mortgages in large cities, large simchahs, and of course tuition, taken together, are putting the frum lifestyle increasingly out of reach. The question she appropriately ends with is, “What changes and improvements can be made to our communal infrastructure?”

At the risk of being simplistic: Income must match expenses for the math to work. Thus, the solution to the frum family’s financial dilemma must involve either increasing income or reducing expenses. What that specifically entails is the key question.

For the standard North American frum family today, the five largest items in the budget are: taxes; housing; food; transportation; and, particular to us as a middle-class community, tuition. A multipronged approach that incorporates both communal and individual measures could provide a panacea to our pocketbook problems. Here are eight steps we can take to build wealth, spend smart, minimize taxes, and plan ahead for life’s larger expenses.

1. Strengthen high school general studies. It is no secret that many yeshivah high schools treat general studies with a minimalist attitude and a degree of neglect. But virtually every frum high school graduate will benefit from a more intensive “core curriculum” of English and math, as well as an introduction to computer science and information technology. Whenever a graduate joins the workforce, whether in klei kodesh, business, or in a profession, mathematical and technological literacy and the ability to communicate effectively will stand him or her in good stead.
2. Personal finance education. As Mrs. Fleksher notes, organizations such as Mesila and others are doing yeoman work in empowering people with knowledge. Creating and promoting high-quality classes for young couples, as well as a personal finance curriculum for yeshivah high schools and Bais Yaakovs, will pay dividends for a lifetime. Teaching core concepts —behavioral finance, compound interest, the time value of money, insurance, price differences between store and name brands, the difference between speculation and investing, among others — as well as standard budgeting for a Torah household, and earning levels for jobs in various fields, are all imperative for the frum community’s financial future.
3. Government advocacy for school funding. One area where our community has made progress in recent years is advocacy. The Agudah and the Orthodox Union, under the guidance of A.D. Motzen and Maury Litwack respectively, are working in state capitals to ensure that private schools receive an equitable share of public funding for, at the very least, general studies. At the risk of sounding trite, each person who gets involved in such efforts can make a difference for our schools and for our families, who bear the double burden of tuition and the property taxes that pay for public education.
4. Post-high-school professional studies. Thankfully, today we have many kosher options for young men seeking professional training, when they and their mentors deem it advisable. Programs such as Touro, PCS, and FDU offer schedules that are compatible for a kollel yungerman or yeshivah bochur, and the opportunity to earn a college degree, under appropriate circumstances. Without minimizing the challenges to one’s ruchniyus in some environments, a professional degree has proven to be an excellent option for countless frum families.
5. The tax code. Many people think their biggest expense is their mortgage or tuition. But between federal and state income taxes, sales, payroll and property taxes, and endless fees, it is virtually certain that your biggest outlay goes to Uncle Sam. Lowering one’s tax burden, with the various legal means available, can go a long way to making the numbers add up. Additionally, certain tax breaks are congruent with life events that are often part of a frum lifestyle (e.g., seminary). Here are three such avenues.

A 529 plan is a state-sponsored account in which you deposit after-tax money; it will grow tax-free, and withdrawals from the account are tax-free, if spent on legitimate higher education expenses, including yeshivah. This assistance was even further enhanced in 2017, when 529 accounts were expanded to up to $10,000 a year, including private K-12 education. Additionally, most states grant a state tax break for such contributions, contributions that in 2021 could be up to $15,000 a year per child.