I feel like many of your articles focus on frum families who have extra cash flow. What about someone like me who has no extra money left every month? I’m stretched thin financially and literally have no wiggle room. What types of financial planning strategies would you recommend to the many families in my situation? Any help or advice is appreciated.
– Husband and father of five
This is a good question, and one I have alluded to in previous articles. However, in this article, I will outline ten practical strategies that can immediately improve the financial situation for those who are struggling.
It’s important to point out that good financial planning primarily focuses on smart lifestyle planning. There is no savvy investment or tax strategy that will magically solve financial stress. Rather, reassessing and modifying lifestyle choices can have a meaningful impact and provide much-needed financial breathing room. Below are ideas you can implement today to change your financial life for the better:
- Strict budgeting: A budget is the foundation of financial planning. Understanding how much money comes in and how much goes out is essential. Equally important is reviewing where your money is being spent on a monthly basis. This ongoing monitoring will often uncover unnecessary or redundant expenses, such as unused memberships and subscription services.
Smart budgeting can also reveal areas where you are overpaying. A common example is food, whether through frequent takeout or overspending on Shabbos or Yom Tov meals. Reducing food costs by even $100 per week through more intentional spending can be a game-changer.
Finally, conducting an annual review of fixed expenses such as internet, insurance, and your mortgage is worthwhile. This year alone, I saved a meaningful amount of money on auto insurance, which had been increasing annually, by switching carriers. Savings in these areas, when available, are often significant.
- Build an emergency buffer: The old saying goes, “Cash is king,” and to an extent this is true. Before doing any investing, it is imperative to have a cash cushion in your checking account, so you do not need to stress about an unexpected bill, like an emergency car repair or a leaking basement. I generally advocate having several months’ worth of expenses in cash. Three to six months is a good rule of thumb for working families, while retirees should aim for one to two years’ worth.
- Avoid debt: Except for a low, fixed-rate mortgage obtained after putting down at least 20% on a home purchase, debt is not the solution to financial problems. In fact, it often deepens them. As Mishlei teaches, “The borrower is a servant to the lender.” Families in the strongest financial position, regardless of income level, are those who owe no one.
- Staycation vs. vacation: Going away is not a G-d-given right; it is a luxury that significantly increases annual expenses. Travel, food, and activities all add up quickly and are far more costly than staying local and enjoying nearby family outings. Unless a generous friend or relative is covering the entire cost, leisure travel should be avoided when you are struggling to make ends meet.
- Rethink education expenses: With five children, tuition undoubtedly represents a major annual expense. Thankfully, there are many yeshiva options available. While I don’t know where your children attend school or what you pay, some high schools cost upwards of $30,000 per year. Choosing a more affordable school, even if it requires an additional 45-minute commute, can save tens of thousands of dollars annually that can be redirected toward other priorities.
- Avoid lavish simchas: Over the past few decades, spending on simchas has grown out of control. My advice is to ignore social pressure and embrace simpler celebrations, such as a shul kiddush for a bar or bat mitzvah, or a takanah hall wedding. Setting yourself back financially for years to celebrate a lavish simcha is not in the spirit of the occasion.
- Downsize: A larger home brings higher expenses. Maintenance costs and property taxes can often be significantly reduced by moving into a smaller home. If you are struggling financially, downsizing can save tens of thousands of dollars per year.
- Consider relocating: Some areas of the country are far more expensive than others. Cities such as New York, Los Angeles, and Boston are among the costliest, while places like Detroit, Memphis, and Houston are far more affordable. Many of these areas also offer vibrant Jewish communities. While relocating is never easy, it can substantially reduce financial stress.
- Develop a side hustle: When finances are tight, no honest job should be beneath you. In many cases, working longer hours or developing a side business may be necessary. In today’s world, there is no shortage of opportunities to earn additional income. Consulting, freelancing, tutoring, selling items online, driving Uber, and more are all easily accessible. I have a friend who is an engineer who also works as a mashgiach at local simchas to create additional flexibility. A frum lifestyle is expensive, even an extra $100 to $300 per month can help stabilize a stretched budget.
- Prioritize goals: Clearly defining your family’s goals is essential to long-term financial success, especially on a tight budget. It helps you focus on what truly matters, avoid unnecessary expenses, and stay disciplined over time.
While I can’t determine what is most important to your family, many Orthodox families prioritize Torah, family, and community. In contrast, saving for college, leasing luxury cars, or paying for weekly housecleaning may not align with those core values. Luxuries can be enjoyable, but they often distract from what truly matters. I suggest writing down your top three priorities and placing them somewhere visible (e.g. on a bathroom mirror or office wall) so you see them daily and remain focused. This clarity makes necessary sacrifices far more manageable.
One final suggestion is to have open and honest family discussions about finances. Much of the financial pressure in the frum community stems from social expectations. When your spouse and children understand your financial limits and values, it fosters unity and turns your family into a team aligned around shared goals. This alignment reduces conflict, emotional strain, and the temptation to spend in ways that contradict your values.
At the end of the day, making tough choices and implementing some or all of these strategies can help you afford a frum lifestyle, provide for your family, and secure your financial future.