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The Jewish Ethicist: Overdraft

The Jewish Ethicist: Overdraft

Borrowing beyond current means should be only for the most vital necessities.

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Q. I notice many people living beyond their means, racking up credit card debt or overdrafts. Does Judaism have anything to say about this phenomenon?

A. The human tendency to live beyond our means is hardly a new one, and is discussed in many ancient Jewish sources. One of the most prominent is the following passage from Maimonides' Code. Maimonides begins with the prohibition to dun and harass a debtor when in any case he has no means to pay, but then in characteristic fashion he also discusses the opposite problem:

It is forbidden for the creditor to present himself before a debtor when he knows he has no way of paying. . . And just as it is forbidden to dun him, so it is forbidden for the debtor to withhold his fellow's money that was entrusted to him and to say, "Come back later", when in fact he has [the money]. . . It is likewise forbidden for a borrower to take a loan and to spend it unnecessarily, and to lose it until the creditor will not find any way to collect -- even if the lender is very wealthy. And any one who does so is called wicked, as it is written "the wicked borrow and don't pay." And the sages taught us, "Let your fellow's property be as dear to you as your own."1

Maimonides' main focus is on the interpersonal. A person who borrows to finance frivolous expenses ("to spend it unnecessarily") is likely to end up leaving the lender in the lurch. This was particularly abhorrent in previous times, when loans were almost solely interest-free and lenders were motivated solely by a desire to help the needy. However even today, when most lenders are motivated by a desire for gain, a person should take his monetary obligations seriously. Whenever you borrow you give your word that you will pay back, and a person should always stand by his word.

However, this same admonition also teaches us something about budget management. As the Prisha commentary points out, when Maimonides says "until the creditor will not find any way to collect," he doesn't mean that the person intends to evade payment. Rather, this is an inevitable risk of borrowing money for expenses beyond basic necessities.

But in the Jewish worldview, monetary matters are not just a matter of budget constraints; they are also matters of Divine providence. The Torah tells us that the land of Israel is "a land constantly under God your Lord's scrutiny; the eyes of God your Lord are on it at all times, from the beginning of the year until the end of the year" (Deuteronomy 11:12, Living Torah translation). As Rashi explains, God is always scrutinizing the needs of the inhabitants of the land of Israel, and beyond that the inhabitants of the whole world, assessing and providing for their needs.

Based on this, when God sees that we have extra needs, He may provide us with extra means. So great is our faith in this aspect of providence that our sages encourage us to rely on it. But the sages had a very particular concept of what our true needs are – one that doesn't correspond to the spending patterns of many heavy borrowers:

Rabbi Yochanan said in the name of Rebbe Eliezer the son of Rebbe Shimon: The Holy One, blessed be He said to Israel: "My sons, borrow on my account and sanctify the [Sabbath] day; trust Me and I will pay. . . .All of a person's sustenance is budgeted from Rosh HaShana to Rosh HaShana, except for expenses for Sabbath and holidays and expenses for Torah education for his children. In this case, if he scrimps his budget is cut, and if he adds his budget is increased.

Having bread, wine and a bit of meat for holy days (not weekdays) and providing adequate Torah education for children are not luxuries; they are necessities. Therefore, a person is allowed to borrow for these outlays. Of course even in this case a person may not borrow recklessly, but there is definitely a belief in providence that allows us to extend ourselves in these cases a little more than we normally would. But we can just as easily see from this that for non-essential expenses, if we don't have enough money for them now and we can't see how we will obtain enough soon, that is evidently an indication that they are not part of our providential budget for this year.

SOURCES: (1) Maimonides' Code, laws of loans 1:3. (2) Prisha commentary, Choshen Mishpat 97:7. (3) Babylonian Talmud Beitza 15b, 16a

Published: November 28, 2009


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Visitor Comments: 5

(5) Anonymous, December 4, 2009 6:48 AM

Two Questions

Despite living on Social Security, I have more money left over each month than some of my friends who still work and pull in a great salary. There are a couple of reasons for that. First, instead of living alone, my sister, her daughter and I share our home and split the expenses three ways. In the old days families lived together and took care of each other; both my sister and I are retired and disabled. I bought the house when I was still working but had to retire after a massive stroke, so when the interest rates fell like a rock my niece, who still is working, had a better credit rating than me, so I sold the house to her and we all live better because of it. If more famlies could do that they could save a small fortune. Then when I see something I like I ask myself two questions: Do I really NEED this or do I just WANT it. If the answer is want but don't really need, I don't buy whatever it was that I was looking at. The result? I not only have money left over at the end of the month, but I have a savings account because I'm saving up for a new van. I have to use a van to carry my wheelchair and a car just doesn't cut it. It takes absolute trust in your family to do this, but family is family and if you can't trust each other...well, I feel sorry for that family. I send this with the hopes that maybe someone will profit from what our family does. Part of what we are called to do is repair the world and spread the light. I wish everyone a wonderful Hanukkah. The light has to start with each of us.

(4) Pleasant, December 4, 2009 3:07 AM

To live within your means, you must first have some means.

I don't think the questioner realizes that what they are commenting on is the beginning of a major problem on the rise. In the video on "kick a jew day" I was not shocked. Why? Because that kind of thing has been happening to me in 2005-2006 in Cathedral City, CA in a lower middle-class neighborhood. But I'm not a big important Jew, so who cares, it must not be a big deal. (We're talking many separate incidents.) Rampant anti-semitism and open religious suppresion in Mobile, AL where clergy with white collars visit and actually cause the flavor of the services to change noticibly while they are in attendance, visitors assaulting members with christian missionary type conversations, etc. 2006-2007. Coming back to California to the same area my children and I have been subjected to these same things. I have been let go from several jobs in a row for no good reason, right after being subjected to hefty rashes of anti-semitic behavior delivered on my person. I have tried to seek restitution with the EEOC many times and find them stringing up LOTS of red tape, have tried to get a lawyer, who is very little help at all and either get no sympathy from fellow jews or get all kinds of advice about Jewish Family Services (who will "only help each family once" and doesn't help much anymore), ACLU, EEOC, getting a lawyer, etc. But no one cares to listen when I say I've tried all those things. In fact, it is at this point I get snapped at. Maybe I don't want to be Jewish anymore. It was only one of twelve tribes anyway. Maybe I'll start being B'Nai El Chai.

(3) thomas eby, December 2, 2009 12:00 AM

never beyond my means

Rabbi Meir, I cannot presume to offer advice greater than that of so great a sage as Maimonides but I will offer this. As a child, I and my six siblings were very poor. Only the support of a loving and kind mother kept us body and soul together. There were times we had nothing to eat and very poor apparell. My mom would accept with great humility and thanks any offer of help but she would never extend herself to owe others no matter what. I still hold that belief to this day and I and my siblings are now in our 70's and 80's.

(2) Rachel, December 1, 2009 9:16 PM

and...

...when we had a catastrophic illness in our family, we took a 2nd mortgage to afford our child's day school tuition. The following year, when our finances still had not improved, that was the end of the day school education (no financial aid). If people don't know a family's full situation, they shouldn't judge.

(1) sara, November 30, 2009 11:02 PM

but....

Our problem is in what we consider our "needs" to be.

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