A Simple Bible-Based Budget

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why.

Recently my pastor shared what he considers a Bible-based budget. His breakdown:

• Give 10% of your income
• Save 10% of your income
• Live on 80% of your income

He noted that this budget wasn't stated explicitly in the Bible, but was a simplified budget compiled from the various teachings the Bible contains on money.

Personally, I think this is a very good STARTER budget. If someone is just beginning their budgeting, this seems like a great way to get them going. In fact, if you get to this point and never progress, you're probably better off than the vast majority of Americans. You'd certainly be among the top tier in both giving and saving if you put 10% towards each.

But as time goes on, I think you need to work to exceed the first two numbers and cut back on the third. We've been budgeting for almost two decades now, and we currently give way more than 10%, save way more than 10%, and live on way less than 80%. But it took time to get to this point. The keys: spending less than we earn (and not spending all of our pay raises) while working hard to maximize our income. It's that simple.

So, what do you think about the 10/10/80 plan -- good or bad idea? Any suggested improvements? 

Comments

[Katy McKenna]

I agree with you. Great starter budget. I'm pretty certain those who heard your pastor's advice who've already moved up the budget food chain, so to speak, won't go back to the 10-10-80 budget. But considering something like only 6% of churchgoers actually give as much as 10%, the pastor had a plenty large enough audience to influence in the right direction!

[megamike]

A bible budget is fine but what of a Koran budget and one based on the Troah?

[Plamen]

This a good start but for sure not enough.
The saving should be in the range of 25-30% in the first few years for initial wealth accumulation. You can't do much if you have no money in the bank/Mutual funds for investments.

[mrm]

@megamike: Interesting question - perhaps you could write that post in the form of a comment on this page. My guess is that they are both similar though.

[Big Winner]

It also matters what you consider to be "giving". In the case of microfinance, you can lend while not receiving interest. That way you get your principal back and can help more people.

[Jeff]

This is exactly what I plan on doing with my income stream when I get out of college. Hopefully I will be making around 70-80K, live really poor for a year, then make a down payment on a house. And begin the process of paying that off.

[Pete]

I think this is a good starter budget, often the hardest part for most people is just deciding and getting started on giving/tithing. Once you do start giving though, it can really be a huge blessing for the giver.

[Chris]

The bible based budget is great--it's how I manage my finances except I use a 15% savings model--but here's the rest of the story:

Give 10% of your income
Save 10% of your income
Give Uncle Sam 10-35% of your income

Live on 45-70% of your income (depending on your marginal tax bracket).

[Andy]

I know there are different opinions on this, but I consider much of the Uncle Sam category to be a subset of the giving category. The rest of your taxes are part of your living expenses and fall into the 80% part. Of course you can continue to divide each category to any level of detail you want, but then you lose the great simplicity of the 10-10-80 plan.

[MrG]

Currently i prefer "give 0%, save 20%, live on 80%". Why no giving out? Simple: i'll give out when i'll be financially independent.

[LotharBot]

"A bible budget is fine but what of a Koran budget and one based on the Troah?"

If you consider either of those books to be the guiding principle in your life, feel free to generate a budget accordingly.

Your Torah (or Tanakh) budget will end up looking extremely similar to the Bible budget, probably using many of the exact same passages. I suspect the Koran would give you a similar plan, though not identical. Either of those budgets would be fine, though there's no reason to expect a Christian to write articles on them.

[Dave Farquhar]

Good idea? Absolutely.

I think we've all heard the stereotypes about Jews being tight with money, secretly rich, etc., and it's (supposedly) all because of a giant conspiracy. My personal observation is that the Jewish people I have known do tend to be successful and good with their money. I've believed for a very long time that the reason for this is because they take what the Torah says about money seriously.

If you want to be in on the "conspiracy," you can do what the Torah (Old Testament) says about money too. Beautiful, isn't it?

So yes, I believe a 10-10-80 rule is good. It immediately makes you one of the elite upper 10% when it comes to both savings and charitable giving. In time you can ratchet both of those up above 10%. I would also add avoidance of paying interest to the list of things people do after implementing 10-10-80. One has to be careful with the Bible verses that talk about interest--specifically, are they commands or are they just principles. But when you get compound interest working in your favor as opposed to someone else's favor, it's amazing how quickly the numbers pile up, even at a relatively low interest rate.

[Incredulous]

I hope your church doesn't have any poor members (and I suspect it doesn't); a poor person might have major problems with your pastor's pulpit budget.

[Success Professor]

Certainly I think 10/10/80 is a great starting point. I would have a hard time calling it a Biblical-Based idea. The New Testament does NOT ask for some magical 10%. It asks that you give up everything to God. Only keep what God allows you to keep for yourself. At times, God may allow you to keep more than 90%, at times it will be much less. Everything is God's and acting that way with your money is what He demands.

[Ryan S]

I agree with Success Professor, the NT says that everything is God's. If you save all your life for a retirement where you do missionary work, but never gave a OT tithe along the way, I don't see that as a bad thing and neither does the Bible.

[ekrabs]

I think you've hit the nail pretty good. It's a good start, but it's only a start.

[Tim Manni]

It definitely makes sense! Although, why is saving always so much easier said than done? Saving 10% of each paycheck is absolutely a great place to start.

[Prince of Thrift]

I have mentioned that very ideal budget a few times over the last couple years. A tip, I heard a former pastor give back when I was in high school, some 20+ years ago. A tip i wish I had followed more closely over the years.

[karla (threadbndr)]

At a recent retirement seminare in the workplace, I got the following on saving for retirement

10% for a basic retirement
15% for a comfortable retirement
20% for a retirement that lets you 'escape'

So 10% is a good start for saving, but not the final goal.

[Ogrface]

Are those percentages of your gross or net income? I've seen arguments for both and the Bible isn't really clear on that. I guess the point is to give and save as much as you can and make your money work for you like the good servant we should strive to be.

[Marian]

That's insane! To give away as much as you save!
You can call that poor financial planning!

What's wrong with? 10/40/50? Or even 0/50/50? Or at least 0/20/80?

[Rich Schmidt]

@Marian, it doesn't seem insane to us. My wife and I have done it for years, though our numbers now are closer to 15-15-70... or maybe 20-20-60. (It depends on the year and the opportunities.)