Comparing cost of living in US and Israel

>>We are a frum (Jewish Orthodox) homeschooling family from New York working towards making aliyah within the next year and we were told by NBN that properties in the North, specifically “villas,” “cottages,” and “plots,” are extremely affordable and available compared to the rest of the country and here in the US as is the cost of living expenses; reduced tuition (not applicable in our case), reduced health insurance, reduced food expenses, use of solar panel/power energy systems to reduce bills, etc… – your post however, suggests the opposite! May I ask if you can please slightly elaborate on what would be considered an “expensive house” vs an “affordable apartment” in Karmiel or Maalot, for example, and what that same house and apartment would cost in a place like Bet Shemesh, or Maaleh Adumim, for example? It would really assist us in putting things into perspective…<<

Housing – What you consider expensive or affordable is relative to where you’re moving from and where you’re moving to. Since you’re coming from NY,  it’s likely that everything will seem fairly reasonable to you.

When you buy in Israel, it’s generally accepted that you put down between 30 – 50% of the purchase price.  This obviously affects how you perceive affordability so keep it in mind!  We initially were told we would only need a 10% downpayment and thought we’d be able to buy a private home, but in the end the mortgage broker told us we’d need to put 30% down.  If you have someone co-sign your mortgage, you can have a much smaller downpayment, but we didn’t have that and we didn’t want that.

I can’t give you accurate prices for other parts of the country, but I can tell you fairly accurately what local prices are.  (You mentioned Maalot, and their prices are lower than Karmiel.)

Karmiel prices for the Dromit neighborhood (this is the central neighborhood where most of the recent Anglo olim have moved to) – prices range between about 500,00 shekels for a smaller apartment (2 bedrooms) on a higher floor, going up to about 950,000 for a larger ground floor apartment (4 or 5 bedrooms) with a garden.  Obviously it depends on location, condition, etc.  But that’s a pretty accurate range, though you can find apartments that go outside of that.

Private houses – the prices range from 1,290,000 shekels for a smaller house (120 meters and up) to 2 million shekels for a very large home (250 + meters) in excellent condition.

These prices are drastically cheaper than in the Jerusalem area.  Someone told me they sold their small Jerusalem apartment and are now buying two apartments for cash, one to live in and the other as an investment property.  Another person told me she has plans to do the same thing.  Someone else told me she sold her small apartment on a high floor in a less expensive Jerusalem neighborhood and was able to buy a large apartment here with two gardens, and buy a car to boot – she went from feeling like a pauper to someone living in style!  So it’s true that housing is much cheaper in the north.  But I still wouldn’t call it cheap – real estate in Israel is high, and constantly rising.

Tuition – much, much cheaper than the US.  And my Shabbos guests this week told me that tuition in this area is much cheaper than in the center of the country.  How inexpensive it is depends on how heavily funded the school is by the government, as well as the age of your child.  I’ll share our local costs but remember that this can drastically differ from school to school, and area to area.

Ds5 has no tuition costs this year, since he’s in gan chova (mandatory kindergarten) and this is free for all children at this age throughout the country.  He has a 60 shekel a month materials fee.  If you want private reading tutoring for your child (15 minutes, 4 times a week during school hours), it’s an additional 900 shekels a year.

Ds4 – his tuition for gan is something like 160 a month plus 60 shekels a month materials fee.  (This is less than I remember paying for ds18 when he was this age!)

Ds9 – the cheapest due to the school he attends (highly government subsidized) and being the second child in our family to attend, so the 10% discount was applied to his tuition.  70 shekels a month.

Dd11 – 110 shekels a month; same school system as ds9.

Ds12 – 380 shekels a month (less extensive government support).

Dd15, dd17 – 140 shekels a month each.

High schools for boys are much, much more expensive.  We’ll cross that bridge when we get to it! :)

This doesn’t include trips, books, transportation, or hot lunch (currently only applicable to ds12).  But it’s clearly hugely less expensive than private school in the US.  Since we were homeschooling, this is actually a few hundred dollars a month that we weren’t paying before we moved here but it would be an incredible area of savings for most people.

Health insurance – we aren’t yet covered by the national insurance and have to pay for private insurance until our waiting period ends.  If you’re an oleh, you get free insurance for a year right away, so this wouldn’t be an issue.  Only the basic coverage is free, and then there are costs for different levels of supplemental insurance. We had insurance through my husband’s employer so this is another cost we didn’t have before.  The coverage I had was much better than the standard level, so I wasn’t used to paying for the things that I had to pay for here.  But this will depend on what kind of insurance you’re used to.

Food – I’ll write a separate post about this with details.  In short, the only thing that has been notably less expensive has been produce, and even that isn’t always a big price difference.  If I wasn’t used to shopping the way that I am, and implementing frugal strategies toward food buying, there would definitely be an increase in this area.

Utilities – I was previously paying a combined bill for gas and electric, and don’t remember how the costs broke down.  It averaged about $200 a month (ie 700 shekels).   The bills arrive every two months here, and I was shocked at how high my gas bill was, since the only thing we use gas for is cooking on our stove top – 728 shekels for two months, electric was 523 shekels for two months.  These prices are for our initial months here, so there were no a/c costs or heating costs, though it was during the holidays so there were a few days that the gas was on for 25 hours at a time.  So about 1250 shekels for two months versus 1400 for two months – a bit cheaper here, but not a significant area of savings.  Take into account that in the US I regularly used my dryer, my hot water was heated by gas, we used a/c window units in the summer and heat in the winter…if I did the same thing here, the costs would definitely be much higher.

The one thing that surprised me was that our water costs were lower here.  Water is much more expensive here, but our two month bill was only 126 shekels, compared to about $160 for a three month bill in the US.  I don’t know how to account for that, since I have teenagers who shower daily so you can’t say we’re minimalists when it comes to water usage.  I was very grateful, though!  (Edited to add: we just got a bill for a full two months – apparently our first bill was only for part of a billing period.  The new bill was 387.02.  So it looks like this is comparable to what we were paying in the US.)

I dislike when people make the case to move to Israel because life is so much cheaper.  It’s definitely something to consider, and if you’re paying private school tuition and private health insurance you can save big, but life isn’t cheap here.  Not at all.  And there aren’t cheap stores like Walmart to buy at, or amazing thrift stores.  Everything costs a lot more here.

And salaries aren’t generally commesurate with US salaries.  So the equation generally is, higher expenses, lower income.  I would caution you to be careful who you get your information about aliyah from.  NBN is a great organization but they do have a goal, and that is to get people to make aliyah.  I think overall they give good advice, but financially their advice isn’t always on target.  My mother is planning to make aliyah soon, and the advice they’re giving her will compromise her long term financial stability.  But even though I’ve explained to her why I think it’s such bad advice, she keeps going back to”but that’s what NBN recommends”.

About specific communities, check with those who live there for what the costs are.  I attended an NBN webinar about Karmiel before I left the US, and when I saw their quotes on real estate, I sent them a private message in the middle of the presentation – I told them they were way too low, not reflective of the actual real estate market, and would lead people to mistakenly conclude they’d be able to afford much more than they actually could and then be very disappointed.

Now when it comes to quality of life, the US can’t even come close.  But that’s not a dollars and cents issue!

Avivah

12 thoughts on “Comparing cost of living in US and Israel

  1. I’m very surprised about your high gas cost if it’s only used for cooking. Granted, we are a smaller family than you (3 kids- but one is a baby), but I only need to buy a new “balon gas” every 4 months or so, and it’s a small one- 160 nis (which IS expensive). I’m assuming your gas comes in though the building and isn’t directly connected to your stove like mine, but still it seems like you’re paying way to much. I’d check i out if I were you.

    1. I also think I need to check out the gas bill, since it seems exorbitant to me, but I’m not sure how to check it! (Yes, you’re right that it comes in through the building.)

      Maybe I need to ask my neighbors in the building about if it’s in line with their bills, and ask them for suggestions on how to further investigate this.

  2. As a large family who lived both in Israel (Kiryat Arba) and in the US (Baltimore) for many years, I would like to answer your question.
    Life in Israel is definitely way more expensive than in the US.
    To complete Avivah’s answer, there are other costs such as annual income TAX which is way higher than in the US. In our case (I am self-employed) we had to pay tax both in the US as well as in Israel. In Israel the amount to pay was five times higher than the amount requested by IRS.I know that as Oleh Chaddash you are not worried about this yet, but it does come into the equation. Many do not know, but the Israeli system, when it comes to retirement, is molded on the communist way, where each retired person receives the exact same mensual amount no matter how much tax they paid over the years. This amount is incredibly low and unfortunately not enough to pay bills.( It is around $300 for the best of my knowledge), wether you have been paying tax as a doctor or as a clerk. That causes a situation where older citizens are in poverty.My sister who volunteered for Magen David Adom for 3 years was often shaken to rescue Jerusalem’s older citizens suffering injuries due to the cold. And many of them visit daily soup kitchen for lack of food money (I volunteered there). It was particularly poignant to serve holocaust survivors who do not have enough means…
    Also, for rent, there are more utilities that Avivah did not mention: it is callled Arnonah. In certain areas you have additionnal amount to pay for Shmirah (guard duty) and also cleaning for the stairways..Arnonah will be much higher in good neighborhoods and is appropriate to the surface of your home. If you rent, you have to pay Arnonah, not the landlord.

    About school and medical. Like Avivah said the school who have allotment from the governement are cheaper. But they do not compare to private schools in the US, in quality of education for secular studies. Also, kids come home at 1:30 or 2:30 not 5:30 or even 6:30 like American Yeshivas.

    Medical is way cheaper in Israel when comparing $$. But the comparaison is between “welfare-clinic” level of medical and personal care and private doctors and private medical groups in the US. Can you compare the two only by the price??

    Unfortunately, Israel’s hospitals are on the very very low side. I can assure you as someone who had multiple incidents with my kids, long terms illness of both my parents, as well as happy events such as giving birth to 8 children in Israel. The level of professionalism of American hospitals is outstanding by comparaison. Let alone the level of politness, care and overall -humanity.

    Of course there are things in Israel which are priceless, such as your children conversing in Hebrew, the feeling of living amoung your brothers and the atmosphere of Shabbat when you live in a religeous neighborhood.

    But thinking that life in Israel is cheaper….No, it is not.

  3. And by the way, do not believe A WORD from NBN or Sochnut who have their very own inner agenda. I know dozens of people who have been mislead with fictious facts. Like Avivah said:check everything they tell you and do not take anything for granted. Remember if it sounds too good to be true it probably isn’t.
    Sorry to burst your bubble but I offered a reality check. If you have any question – please do not hesitate. I lived in Israel for almost 20 years.

    1. Shalom U’Vracha positivenergy11 and how are you?

      Thank you for your honest and straight-fact-forward response and for taking out from your time; it is greatly appreciated… Life in Boro Park and Flatbush is very different from Baltimore, but not that different from Israel due to the high concentration of frum Jews that live here. Therefore a typical Friday brings the smells, tastes, and sights of another beautiful Shabbos about to begin with a plethora of shiurim, oneg shabbosim, and butahs to attend galore (until 2:am mind you!) Prices in Brooklyn are exorbitant for just about everything, and there are no discount stores of any type- I don’t even know what a walmart is… Most Jews in Brooklyn shop in Jewish stores for pretty much everthing and deal only with other Jews and pay Jewish prices. “13th Avenue” or “Avenue J” are packed all the time and the traffic is ridiculous.

      Thanks to NBN there is discounted or reduced Arnona in many communities for prospective tenants as well as a 10 year tax abatement for earned income overseas; no more double taxing…

      There are supposedly some excellent hospitals in Manhattan, however, I stay away from the tumah of that island and gratefully enjoy my “welfare -clinic” hospital that boasts mezuzahs, kosher meals, and a ‘chessed’ room that feeds the family of patients from food prepared and wrapped by the residents of the local Ohel and HASC homes.

      To be able to imagine such Jewishness as common place throughout the entire country of Israel, rather than just exisiting in my own little 4 amos here, is exhilirating, inspiring, and prideful over what a small band of holocaust survivors have managed to produce in a space about the size of New Jersey. May Hashem grant NBN and all Jews the zechus of returning Home and living the dream of a complete Jewish life in our Homeland, b’meheirah, b’yameinu; amein…

      kol tuv…

  4. I would be very interested in knowing food prices in Israel.
    I hear the terms higher and lower, but if you could give some example of prices.

  5. I am also very surprised to hear about your gas prices. I get it directly through gas lines in the building, and I pay about 100 shekel every other month. This is for a family of 4. Do you have a Junkers? That would account for some of it.

    1. No, the gas isn’t connected to anything else in the house but the stove. The heating system is electric. After hearing that this seems to be out of line for normal usage, I’m going to give the gas company a call to see if we can figure this out.

  6. Shalom Aleichem Aviva and how are you?

    As you originally stated, coming from Brooklyn, prices are more reasonable in Israel than here and I do thank you for your informative and detailed response, it is greatly appreciated. We have always waited for our turn to be miskayem the mitzvah of yishuv ha’aretz and b’ezras Hashem, it won’t be too long… and who knows? Maybe we could have the honor of hosting you and your family for a Shabbos…!

    Nefesh B’Nefesh has been an incredible component in assisting almost thirty thousand diaspora Jews voluntarily leave their lives of material comfort and stability for the simple dream of fulfilling a long lost mitzvah. May Hashem continue to help them in their kiddush Hashem and bring Home all of His children b’karov, b’yameinu; and once we have all received our 4 amos, may we be zoche to bring Mashiach together, b’ahavas chinam amein…

    kol tuv…

  7. It depends on the Israeli community you move to. NBN has a list of communities based on cost of living. The cheaper ones are usually in Shomron and Yehuda, and in areas where there are the least number of Anglos.

    Where I was, food was very expensive, as well as real estate. Electric, gas and even a pair of prescription glasses are more than in the States.

    The package that the Jewish Agency gives olim is nice, but it doesn’t last long. Many olim don’t make it after one year, if they dont’ get a job by then. Many olim in their mid-forties with kids are the ones who suffer more.

    School may be affordable, but the quality of English instruction is very poor and lacking. Most olim children who grow up in Israel can speak English, but cannot read, write or spell well.

    1. I believe that the actual retention rate of olim beyond the three year mark has jumped drastically since NBN has gotten involved since people have more information and support early on. I agree that while the absorption package is a very nice benefit, a person can’t live on it indefinitely.

      To be fair, if children are being raised in Israel, I don’t know if it’s reasonable to criticize them for not reading, writing, or spelling a second language well. How many schoolchildren in the US can fluently communicate in a second language? (Or even a first?? :)) The results in this area are mostly determined by the extracurricular help they get from their parents.

      You’ve moved back to the US after making aliyah some time ago, haven’t you? I would be very interested in hearing about your experience – why you moved to Israel, and why you left. Would you be willing to share about that in detail? Perhaps I can share your perspective with others in a future post about potential hazards of aliyah and things to be aware of from the outset.

  8. Avivah

    Thank you for your warmth and wisdom. Bisrat hashem, I will be making aliya in 2013. I am a biophysics researcher planning to settle in Karmiel.
    My question is about organic produce in the north. Can we get in touch with people like Anita Tucker, or other farmers who may be close to Karmiel?

    Something that may be of interest to you from my research:
    Every living thing ‘runs’ on an electrical flow; electromagnetic energy is a thousand, billion, billion, billion, billion, ( 1 to the 39th power ) more powerful than gravity. When vegetables (and meat) are cooked, the electrical flow is stopped and the accompanying enzymes your body uses to digest are destroyed, resulting in a move towards acidity in the body when this is consumed. On a practical level, eating more raw would save on your gas bill!

    Adam and Hava in Gan Eden, ate fresh from the plants. When you pick a pomegranate, for example, you ‘unplug’ the fruit from the tree, cutting off its electrical flow and beginning the process of decomposition (acidity).

    Zie gzeunt.

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