Today, I’d like to START A NEW video series to discuss the important topic of How To Get Out Of The Financial Rat Race.
I’d like to start by sharing a question I received the other day which was as follows: “Hi! how can I 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 recently attended. 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 viewers the suspense and tell them what the crux of the questioners issue is this: It’s his 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 reefer, 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.
Over the course of this video series, I’m going to share a few thoughts to keep in mind to avoid getting sucked in this lifestyle and one solution to consider:
First, keep in mind that 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.
In the next video I will share challenges to be mindful with getting caught up in the financial rat race and how to get out of it.