May 14, 2024
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May 14, 2024
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Financial Planning for the Orthodox Jewish Family: Diagnosing the Challenges

For many Orthodox Jewish families today, it is a challenge, if not an impossibility, to think about long-term financial planning. Without any hard data, one could venture a guess that the cost of living for the typical Orthodox Jewish family of four (let alone six or eight or 10, b”H, is significantly higher than the average American family of four. I would like to lay out some figures and statistics from reliable sources that clearly show the magnitude of the financial challenges facing the Orthodox Jewish community.

According to a 2019 CNBC report, the total required annual income before taxes for a family of four in the state of New Jersey was $75,884. The estimated annual housing cost was $17,409 and the estimated annual food cost was $10,245. While I am sure that you are now murmuring to yourself “halevai,” it is clear that these figures do not even begin to cover the costs of an Orthodox Jewish family in New Jersey. But it is worthwhile to understand why this disparity exists.

First, the model used was developed by a professor at MIT and made quite a number of assumptions. One assumption is that the wages only cover basic needs, with no discretionary expenses such as restaurant meals, leisure travel and entertainment. It also assumes that at this income level, there will be no savings for retirement or for other major purchases.

Elevated Costs of Living in an Orthodox Jewish Community

One of the reasons not to generalize these stated figures to the Orthodox Jewish community is that we tend to live in areas with some of the highest costs of living. We live in communities that are especially tailored to professionals and are in close proximity to services that cater to our unique lifestyle. According to Zillow, the median home value in Bergen County is $497,297 versus $342,527 for the state overall. Moreover, the fact that we have a more limited choice of homes within an eruv and/or near a shul results in elevated home prices in those select neighborhoods.

Total housing costs include property taxes. Bergen County property taxes are among the highest in the state, more than double the average of Cumberland County, the lowest in the state. This is another clear indication that housing costs in our communities are sharply higher than average. For our purposes, let us assume that the overall cost of housing for an Orthodox Jewish family of four is at least 50% higher than the average. This would imply an overall housing cost premium of about $8,500.

With regard to the cost of food, we are all aware that the price discrepancy between kosher food and non-kosher food can be outrageous, particularly when it comes to kosher meat. Some surveys have estimated that the cost of kosher food is 20-100% more expensive than non-kosher food. Now I am sure you can find examples of even higher disparities. And I do not have to convince you that the additional costs of making simple but elegant Shabbos or Yom Tov meals adds a lot more to the average food bill of an Orthodox Jewish family. So, let us assume that the figure for annual food costs is understated by about $5,000.

The Elephant in the Room

Now I am sure you are anxiously waiting for me to broach the subject that has graced these pages over the past few weeks, the challenge of affording yeshiva tuition. Aside from the high cost of most yeshiva day schools and high schools in the Metro New York area, one additional troubling aspect of private school tuition is that there are no related tax advantages in the state of New Jersey. If one considers a yeshiva education an important aspect of raising Jewish children (as many of us do), then this expense would go into the category of essential expenses. The estimated bare minimum pre-tax income for an Orthodox Jewish family of four in Bergen County skyrockets by another $30,000-$40,000.

We also need to address the subject of tzedaka. There are a number of halachic opinions regarding how we should calculate our tzedaka obligation. Nonetheless, many Orthodox Jewish adults deem their participation in shuls, schools and other Jewish institutions as non-discretionary expenses, whether or not it is full 10% (maaser) of their gross income. But, for the sake of argument, let us add another 5% to our essential income needs for tzedaka.

While we have not even covered every expense related to the Orthodox Jewish communal and social lifestyle, it is clear that we face daunting financial challenges versus the average New Jerseyan. Based on these estimated “basic” expenses, a young Bergen County Orthodox Jewish family’s required gross income is probably closer to a range of $130,000-$140,000, well above the $75,884 figure cited above.

Thus, we see that raising an Orthodox Jewish family is a formidable challenge. Moreover, the income requirements do not include room for discretionary expenses. No summer camp, no vacations, no restaurants etc. And that is not a reasonable expectation. Thus, the income needs could be even higher. Luckily, one of our most essential needs, our subscriptions to The Jewish Link, is free of charge! But if you are a young family making a reasonably good living, you will be forced to make some difficult decisions on how to manage a very tight budget.

Achieving Long-Term Financial Goals

Due to the fact that the financial challenges of the typical Orthodox Jewish family are manifold, there are key decisions that need careful consideration. In coming articles, I plan to discuss the importance of financial planning. I will also make specific recommendations that can be beneficial to your financial future.

Jonathan D. Caplan, a former Wall Street executive, is president and founder of wealth management firm Caplan Capital Management, Inc. with offices in Highland Park and Hackensack. He holds a BA from Yeshiva University and an MBA in Finance from New York University Stern School of Business. You can find other recent investment articles by Jonathan at

The views presented are those of the author and should not be construed as personal investment advice or a solicitation to purchase or sell securities referenced in this market commentary. The authors or clients may own stock or sectors discussed. All economic and performance information is historical and not indicative of future results. Any investment involves risk. You should not assume that any discussion or information provided here serves as the receipt of, or as a substitute for, personalized investment advice. All information is obtained from sources believed to be reliable. However, we do not guarantee the accuracy, adequacy or completeness of any information and are not responsible for any errors or omissions or from the results obtained from the use of such information.

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