What Does It Really Cost To Be Frum?

Building a "frum consumer price index" to understand the financial pressures facing our community

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In 2019, according to the US Bureau of Labor Statistics (BLS), the median income for households within the 08701 zipcode (Lakewood) was $54,618. As we’ll soon see, the basic annual cost involved in raising a family of six in Lakewood is around $82,000 (not including tuition, which can add at least $4,000 per child each year).

But that figure doesn’t include major life cycle expenses like weddings, bar mitzvas, seminar years, and supporting married children in kollel. Those costs - ignoring kollel - for a family that grows to include seven children will probably add up to at least $241,000.

I’m certainly not the first to notice this problem. But understanding the numbers a bit better is without question the first step towards finding solutions.

I should explain the reference to the consumer price index (CPI) in the subtitle of this article. The CPI is a measure of what the basic necessities of life cost the average consumer at a given point in time. Governments closely track various versions of the CPI because it’s an important indicator of the impact inflation is having on people’s lives.

We’re not all that interested in inflation for the purposes of this discussion. Although many of the numbers I’ve gathered will make it easier to explore related issues over the coming months and years. Instead, our focus is on looking for ways to narrow that terrifying gap between a normal family’s income and expenses.

So here’s what a frum CPI might look like.

What it costs to raise a family

Here’s a breakdown of the regular expenses a Lakewood couple with four young children might face. These are, of course, just estimates and averages. Your experience might well vary.

I put together a shopping basket of groceries using the online store site of the SuperStop on River Avenue in Lakewood. You can view a spreadsheet with the basket and current prices here. A year’s worth of shopping for that basket would cost you around $13,500.

The average Fair Market Rent price for a four-bedroom home in zipcode 08701 in 2022 is $2,374. Over a year, that’ll add up to $28,500. Note that I chose not to work with occupant-owned homes and mortgages because coming up with a down payment would have required outside help - something not available for every family.

Natural gas is likely to cost our family $1,524 each year, and electricity another $996. Water and sewer charges will probably add another $1,492/year.

According to the BLS, the average family of five or more members will spend around $2,500 on clothing (including shoes). Now I’m fully aware that our specific requirements mean that Walmart isn’t always going to be an option, so we’re often going to shop at smaller and more expensive clothing outlets. But since gemachim are also available, I’ll stick with the national average.

Health insurance is obviously a major expense for most families. Although I understand there’s a very wide range of experience here, I'll try to average it out by going with $12,000/year.

Many growing families need to run two cars. When you add up amortized purchase costs, insurance, repairs and maintenance, and gas, those two cars will probably cost you around $15,000 each year. (Trust me on this one: I’ve been tracking my own expenses for many years and it generally won’t matter what kind of car you buy. New cars cost more up front, old cars cost more in service every few months.)

Assuming one or both of the parents in our family work as employees, they’ll pay 7.65% of their income for Social Security's Old-Age, Survivors, and Disability Insurance (OASDI) and Medicare's Hospital Insurance (HI). That’ll come to around $4,000 out of their $54,618 median income.

Phones and internet will probably add on another $2,400 to that total, bringing us to total annual expenses of $81,742.16. Feel free to see the numbers for yourself on this spreadsheet.

Assuming that only two of our family’s four children are school-aged, tuition costs would probably raise that figure to at least $90,000. And, of course, that’ll rise hard and fast as more kids enter the system.

What large life cycle events will cost

Assuming that our family has been blessed with seven children, evenly split between boys and girls (i.e., 3.5 of each), they’ll be hit with some big one-time expenses. Paying their share of seven very simple weddings (including sheva berachos etc.) will, at around $12,000 each, come to $84,000.

3.5 bar mitzvas would add up to $17,500 in total. Assuming you can get scholarships and discounts, 3.5 seminary years should “only” set you back a total of $70,000. And sending 3.5 sons though their four pre-chasuna years of bais midrash will be another $70,000.

All that will come to $241,500 - just to cover the big life cycle events above and beyond regular expenses. And it all assumes you’ll be very conservative with your spending and willing to resist peer pressure.

Where will all that money come from?

I should first come clean: that $54,618 income figure I’m using is a statistical median. It means that 50% of households in the area earn more, and 50% earn less. The average (mean) household income for 08701 is actually a lot higher: $76,059.

The problem with both of those numbers is that they give us an imperfect sense of what’s really happening. The median value is artificially dragged down by the many very low-income families involved. But the average value is similarly skewed by the presence of a relatively small number of ultra-wealthy families at the other end of the scale.

Household income figures are also not the whole picture. Child tax credits could add $10,000 or more annually. A family could also be eligible for one or more of the many government support programs.

The fact that so many families rely on money from wealthy parents to fill in the worst gaps and keep things floating along adds more complexity to our big picture.

For many, though, the only answer to the problem is debt, often followed by bankruptcy. For a dangerous (and destructive) few, there’s off-the-books businesses and government program fraud. As I discussed in my “But It’ll Be Cheaper If You Pay Cash” article, that’s a huge mistake and will most likely not end well for anyone - least of all the Jewish people as a whole.

But whatever the sources of the income for most families, the odds are that it doesn’t come close to matching expenses. Spending $35,000 more than you earn each year means, by the end of this year, you’ll have $35,000 more debt. And more of the same next year. And that’s a problem.

This isn’t about whether or not people should spend their lives in kollel. Our median income father is more likely to be working for a living than learning.

So what can be done to improve things?

The changes that can make the biggest difference with the least upheaval all relate to life cycle events. As we discovered during COVID, there’s nothing wrong with having small, backyard chasunas with only a few dozen guests. In the course of the pandemic period, my own family made a dining room table (+Zoom) bar mitzva and a very small chasuna. No one suffered irreversible damage.

If our hypothetical Lakewood family should find the strength to accept variations of those options and can consider alternatives to seminary, that $241,500 price tag could easily drop by 80%.

But even if they can’t bring themselves to that level of independence, all may not be lost. If, for the first 17 years of their marriage, a couple could somehow find just $6,500 each year and invest it in, say, a Vanguard S&P 500 ETF (which historically averages returns of around 8% each year), they’ll find themselves with around $241,500 cash happily waiting for them.

But the hard truth is that that won’t address the core question: how can we bridge the gap between an annual income of $54,618 and annual household expenses of $81,742 or higher?

There are some obvious long term approaches that could, over time, make a difference in these areas. Some are, for both good and bad reasons, difficult to discuss. But others have already been addressed at great length.

Do the numbers you’ve seen in this article inspire any creative ideas in your mind? Why not share them?

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A big thank-you to Eli Fried of the GeltGuide for his input.