Monday, October 15, 2007

Jewish Economics: Live Long & Prosper

Longtime readers of this blog know that one of my favorite subjects is economics, particularly within the frum community. One of the most important portions of that subject is the issue of debt - how to control it, how to stop accruing it, and how to bring it down. Orthonomics has two important posts on that very subject over this weekend, including this one with 5 tips of hers on how to control it before it spirals out of control; and this one which is a heartfelt letter to the Yated regarding how it affects people, some discussion of debt, and SL's comments within. Excerpt:
“Debts?” I asked. “What debts?”
My friend then proceeded to relate that he owed what to me was an astronomic sum to credit card companies. “I have no yishuv hadaas and I get depressed simply thinking about how I will ever repay my debts and leave behind this spiraling black hole of debt,” he said. “The second I awake, I think about my balances and how impossible it will be for me to earn enough to pay them off. It is terribly depressing to wake up with such heavy, unsolvable issues weighing on one’s heart, every morning. And you wonder why I have no emotional energy left to think about Rosh Hashana, Yom Hadin, Yemei harachamim v’haratzon and teshuva?!” [Many young people are told not to worry about money, Hashem helps, and when things get too tough, and switching gears is extremely difficult. I have heard plenty of Rabbonim talk about the challenge of wealth, yet little is said about the challenges of debt including the spiritual erosion that can happen when a family is overextended. In addition, I've attended shiurim on giving tzedakah, yet I have never seen a shiur advertised that addresses the halachic question and practical questions about who/what gets paid first when the cash just isn't there].
Please, read the whole thing. It's so incredibly important, particularly for young couples, who pick up debt which can affect them for years, if not their whole lives.

One side note... To the left, some may have noticed a link to something called Prosper. For those who have a small amount of debt, Prosper may be a good way of eliminating or consolidating that debt at a lower rate. A friend who reads this blog originally showed it to me a couple of months ago, I did my own research on it [do your own please!], and found it to be fascinating. It's basically individuals lending to individuals; you can become a borrower or - if you'd like to make money and/or help people - a lender on Prosper.

Ask your local rav what the halachos are regarding lending money with interest. My friend is a lender and politely asks the people looking to borrow if they are Jewish, but find out on your own what you should do. Feel free to e-mail me if you have questions regarding my own experience with Prosper; I joined fairly recently, and perhaps if my friend is willing, you'll be able to ask him questions as well. The best advice, as always, is to avoid accruing debt in the first place; my friend (and possibly another friend or two soon) is using Prosper to make money on lending other people money, so he is earning interest instead of paying it.

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