My question is: how to get out of this financial rat race. By any objective measure, I make a good living. The problem is that the spending never seems to end. I spend well into the six figures for yeshiva tuition, 30k in property taxes, 40k on vacations, more than 25k a year on car leases, 40k on sleepaway camps, new clothes for yom tov every year, and more. We could cut out some items, but we don’t want to be the one family in our social circle cutting back. The tipping point for me, and the catalyst for my reaching out, was a shalom zachor I attended this past summer. This event had a variety of meat boards, sushi, and waitstaff in the rented shul social hall. The baal simcha told me he spent $25,000 on it! I remember when a shalom zachor included chickpeas, herring, and some mediocre beer. I’ve already taken a HELOC to pay for an upcoming simcha. I want to live a more toned-down lifestyle, but I fear it is social suicide. Any thoughts or suggestions?
Let me save you the suspense and tell you the crux of your issue: Your friends! I’ve been working with the frum community for nearly 20 years and one of the biggest financial mistakes that families make is getting caught up in the wrong crowd.
In high school, the wrong crowd consisted of kids who ditched class, smoked, and cut davening. As an adult, the wrong crowd consists of families in your community who try to “one up” each other in a never-ending cycle of fancy vacations, luxury cars, home construction, extravagant simchas, and so forth. This approach to life will only lead to headaches and heartache. Here are a few thoughts to keep in mind to avoid getting sucked into this lifestyle and one solution to consider:
Financial strain at every level of wealth: This “keeping up with the Joneses” mentality can occur at every wealth level. You will never be able to earn your way out of this approach to life. Furthermore, just because someone does well financially does not make them impervious to spending beyond their means. I know people that make millions of dollars a year who are living paycheck to paycheck. This is not a joke, or an exception to the rule. It happens often in the frum community.
A prominent example of this desire to keep up with one’s peers is in Hollywood. The entertainment industry epitomizes how not to live one’s life and there is no better example of that than how they handle their finances. Despite making many millions of dollars per film, many actors declare bankruptcy after overextending themselves with too many houses, cars, and other accessories. Maintaining a certain image is the essence of Hollywood culture and it only leads to depression and financial hardship. Avoid this mentality regardless of how much money you make. It only leads to bad things.
Lack of satisfaction: As folks make more money, I caution them to avoid “lifestyle creep,” which is the gradual increase in spending that often occurs when your income rises. Instead of using the extra money to save or invest, many families start spending more. Things that were once considered luxuries slowly become perceived necessities. The problem is most of these luxuries don’t actually lead to more satisfaction, and in fact, may cause you more stress.
One thing that causes a tremendous amount of joy in my life is the kiddush at shul on Shabbos. I’ll have herring with a few crackers, coffee with a rugelach, and catch up with friends. This really sparks immense joy in my life. When most people reflect on their lives, and strip out all the nonsense and distractions, they will realize that it’s the little things that lead to the most fulfilment. The $25,000 financial outlay for a shalom zachor, the half a million-dollar wedding, the $1,000 luxury car lease, are all distractions to what is actually meaningful in life.
Your current chevra: Now, a few words of perspective on the friends with whom you are trying to keep up. First, they may not actually be your friends. If your relationship is primarily based on who has what or who has more then you are surrounding yourself with shallow people who are not actually your friends. You probably have a nagging feeling that I’m right but feel it would be rude to admit it or say it out loud to your spouse. I’m happy to call things as I see them.
Second, you may be trying to keep up with a mirage, an illusion or something that is not really there. It’s very difficult for families to maintain the lifestyle you described. They are either in the 1% of earners in the country (which is still not a reason to spend so lavishly, but at least they can temporarily afford this lifestyle), or they are getting help from a generous family member like a parent or sibling, or, what is very common in our circles, they are borrowing money to finance this lifestyle. Neither having a rich shver who is willing to finance an extravagant lifestyle nor keeping a fantasy world alive by borrowing money are scenarios worth emulating.
The secret to financial success: I conclude every episode of my weekly podcast with the following line: “The secret to financial success is no secret at all. It’s to spend less than you make, invest the difference prudently, and ignore all the noise.” (Note: Feel free to subscribe to my podcast, called “Jonathan On Money” on Apple, Spotify, or YouTube.) It really is that simple, albeit hard to implement. The hardest part is ignoring the noise. It’s extremely difficult to be the outsider not following lockstep with everyone else in your social circle. However, the people who march to their own beat and don’t get veered off course by what others are doing, are typically the most successful financially. Which leads me to a final suggestion for the questioner and anyone in this predicament.
What should you do: The best way to get out of the financial rat race is simply by removing yourself from it. Your chevra, or the people with whom you decide to associate, can make all the difference in life. They can push you to be a better person, learn more Torah, be a better parent, and a better spouse. Alternatively, they may cause you to live a life that is focused on gashmius and superficiality.
While I started this article by blaming your friends, at the end of the day we all make our own decisions in life. We can choose with whom we spend our time. The onus is on each one of us to choose the right people.
In life, you are really only in a race with yourself. To borrow a phrase from the army: “Be all that YOU can be.” Don’t try to keep up with friends, colleagues, and contemporaries in shul who are focused on the wrong things. Surround yourself with substantive, kind, and genuine people. Your future self will be thankful for this decision.