How to Balance Giving and Saving

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

Recently some of the Christian Financial Alliance members answered the question "How do you balance the biblical principle of saving up for the future and the biblical principle of giving generously?"

Here's my answer:

"Here’s how my pastor explained it to me (and I think it works): First of all, the tithe (10%) comes off the top. After that, any money given needs to be determined by the individual (or couple) after prayer. God calls different people to give different amounts, so there’s no “right” answer as to what should be given after the tithe.  Given this, I recommend starting with the 10-10-80 budget — 10% given away, 10% saved, and 80% on living expenses. As time goes on, people earn more, etc., the “10s” should get bigger and the “80″ should get smaller.”

This was the general consensus of the people responding, though most had a bit of a different spin on it. If you want to see responses from others, click through to the link above.

I'm interested in knowing your take on this issue. How do you balance the biblical principle of saving up for the future and the biblical principle of giving generously?

Comments

[Anne Bates]

this is very true and it does work as i have tried this before, learned about it from Michael Beckwith, thank you for sharing and helping others.
Sent this to twitter for you and digg

[Jonathan]

We are blessed with enough income that we can both give generously and save a lot at the same time. Our goal is to put all of the savings into income-producing investments so that as time goes on our giving can continue to rise without having to depend on working at a job to make that income. We don't have a specific formula for calculating an amount to give (or to save), we just give what we feel called to give or when we see a specific need, and we save whatever is left after our fairly small living expenses. I'd guess the ratios come out around 20-50-30, though we don't track it.

[RobF]

Perhaps a good formula for those on less generous incomes would be to save as much as you tithe right off the top. If that doesn't leave enough, then cut back both equally.

[Harm]

That is like asking the car salesman how much you should spend on a car...

[BD]

Years ago, when I made decent money ($33,000/yr) I gave 10%, saved 15%, and lived on the rest.

But for the last 7 years, I've lived on wages well under $10,000/yr (sometimes as little as $5,000/yr) and I've had a hard time reconciling the "give 10%" rule. I mean, I *am* the poor right now. Do I give? Or do I save everything because I'm giving to myself (the poor)?

Usually, I just follow what I think God wants me to do in the immediate moment. If I feel someone really needs money, and I have it to give, I give it to them. I try to save what little I can (although, in the past couple years, it sure hasn't been much at all...my savings has only grown in terms of a few dollars here and there).

It bugs me somewhat when some Christian blogs demand that everyone give at least 10% no matter what their circumstance is, and "just trust God for the rest" (or worse, use God as some sort of CD and claim that if you give 10%, He'll give you back 200% or some number like that, as if God had posted Interest Rates for Himself). Doesn't God give us brains to use? If giving 10% means not having enough money to pay the bills, is that a smart thing to do? Or if giving 10% means you can't save anything...is it the right thing to do? Or should we just give what's on our hearts, and not slavishly stick to a specific number (ie - 10%) ?

[Georgia]

BD - I think 10% is actually the minimum we are supposed to give. The Israelites actually gave nearer to 30%. However, in our society, I realize it is harder to give on lower incomes. Perhaps the following would help. Check the archives on The Simple Dollar for 9/15/10 posting (second topic.) It gives Twenty Ways To Improve the World, Even If You're Broke. It shows how we can give to the world and to God with more than money. My husband always said that you are never poor if you have something to give to help others out.

Also, to feel a little better about your situation, go to Globalrichlist.com and put in your annual income in the currency of your country. It will surprise you how rich you are.

[FMF]

BD --

Not sure if you gave to a church or not, but if you did, I think you have the right to go back there and ask what they can do to help support you now. I believe that if people give to a church (so that the church can help the poor) and then fall on hard times, then the church has a responsibility to help out the person.

[Angela]

We tithe 10% off the top of our gross income, and are in the process of getting all our debt paid off, then will start putting more toward retirement, and saving for a house. But, the 10% tithe is non-negotiateable.

[BD]

Georgia - First off, I have a problem with comparing US currency and way of living to other countries. In some countries, if you grow the biggest yam in the village, have 15 pigs and 4 wives, you are very rich, live comfortably, and have high social status. Here in the USA, if you have a big yam, 15 pigs and 4 wives, not only are you dirt poor, but you're also breaking the law (bigamy).

A person can live VERY comfortably, even like a king, in certain other countries on a few thousand US Dollars a year. That's why so many retirement articles suggest that US retirees take their money and retire in a poor country...because their US dollars have such huge buying power there.

But here in the US, a few thousand US dollars a year means that unless you have friends, you probably won't be able to stay out of the homeless shelter (If it wasn't for my parents taking me in, I'd very likely be living in a homeless shelter). You just can't compare your income in US dollars to other incomes in other countries straight across and expect it to be comparable. (Yes, I went to the site, and tried it, and sure enough, they do exactly what I just said you CAN'T do. Having $1000 in the US in the course of a year isn't comparable to having $1000 in Honduras in the course of a year. Sure, if I had that money in Honduras, I might have a comfortable life, but I don't. I have this money in the USA, where it buys far far less. You'd be hard-pressed to just find housing for a year on $1000 in the USA, much less buy everything else you need, like food or clothing)

That said, thanks for the suggestion on going to the link for the Simple Dollar.

FMF: Thanks for the suggestion, but I didn't give most of my money to the church... I usually divided it up between a bunch of organizations (like World Vision, Compassion Int., Feed the Children, etc.)
Right now, my parents are taking care of me, so I don't need to rely on the church anyway. Still, it humiliating having to rely on your parents when you're middle-aged. Hopefully once I complete my Master's degree in Accounting in a few years (yes, going back to college a second time now), I'll be able to find work out there, if our current Pres. hasn't totally obliterated the nation by then. :/

[Jonathan]

BD, I don't mean to belittle your circumstances, so please don't take this the wrong way. I am, however, curious as to why your income isn't higher? I'm not sure what the federal minimum wage is, but I think it's around $7 per hour. If you worked full time at a minimum wage job, you'd make over $14,000 per year. Is there a reason that hasn't been an option over the past 7 years?

[@Moneyperk]

My income can fluctuate so it all depends on how good the month is for me. If it's a great month usually I will do 15%-15%-70%. I get to save more money, and generously give more. Also, sometimes on a good month i will invest 7.5% into my investments and save the other half of my share.

[BD]

Jonathan - It's a good question! I've had a series of things unfortunately timed. In 2004, I divorced my husband (It wasn't a messy divorce, and he admits his wrong-doing, we're still friends). At the time, I was working as a Graphic Designer for TCR.

Because I was divorced, I could no longer afford to live in SoCal on my current income alone. So I moved in with my parents temporarily in Utah in summer of 2005. From that time, til 2006, I worked Freelance out of Utah for TCR, and made my plans to move somewhere on my own. Remember, this was before the recession, and jobs were somewhat plentiful. I didn't opt for a full-time job here in my parent's town then, because my goal was to get OUT, not stay. Besides, I was earning a decent salary with my freelance (around $10,000 / yr) and my parents were letting me stay with them for free. So, I saved up my money for a year, and after much research, chose to move to Florida to look for work.

Keep in mind, graphic designers often can NOT get jobs long-distance. Most graphic design jobs say "Locals Only" because the market is so saturated. Businesses won't even look at your resume if you don't live in the same state, or sometimes even the same town. I had to move somewhere before I could start applying (Yes, I looked long-distance, and every job said "locals only"). Central Florida seemed to have graphic design work, and it was relatively cheap to move there. Because many apartments wouldn't let me apply before having a job, I opted to buy a trailer to live in (the payments equaled out to a regular apartment).

I moved to Florida at the start of 2007 (January) and began to look for work. As you all know, that's when the recession hit. Graphic Designers are the canary in the coal mine...our jobs begin to disappear before anyone else's because Art is where businesses cut first. I was still free-lancing for TCR in Florida, but even they had less work for me, so my income there was around $5,000/yr then. I ended up applying for a variety of retail positions while I was looking for design work and got hired at the Home Depot.

Something people don't understand about Retail/ Minimum wage jobs: Yes, you get a minimum wage, but you'll almost NEVER work full time! My hours at Home Depot fluctuated anywhere between 8 hours a week, and 35 hours a week (very rarely 35 hours/ week, that's almost only during Christmas) During the slow periods (summer), sometimes we newer cashiers got NO hours at all, with all available hours given to the tenured workers. As the recession dragged on, business became slower and slower at the Home Depot. People were laid off. I survived all of the layoffs by being a hard worker, but my hours were still cut. Between 2007 and 2009 my total income (TCR and Home Depot) averaged between $8,000 and $10,000 / yr for those years... not enough to really be able to live a normal life. I ended up selling my trailer at a loss (even though I had researched before I moved..it was supposed to be a sure sell for full money back, but the recession made trailer sales go down for the first time in Florida), moved into an apartment with one of my friends and survived mostly on his charity.

I ended up having to move back to Utah when he made plans to leave Florida for California in 2009. Back here in my parents' small town, in the middle of the recession, there is no work. I was unable to transfer Home Depots, since they had no positions available here. Also, I am not a member of the dominant religion here, and in such a small town, that affects your ability to get a job. Plus, there is no graphic design work available here.

When even the local truck stop would not hire me (at the beginning of 2010), I realized a change had to take place. I began school. My income for 2009 was around $7,000 (for both TCR and Home Depot), and in 2010 and 2011, I have only had my freelancing for TCR to keep me afloat. Both these past two years, TCR had almost nothing for me, and my income has so far been under $5,000 both years. I also sell art on the side, but again, I can't sell enough in a recession to make much of a difference... I've still fallen under the $5,000 total income mark for both 2010 and 2011.

I'm currently attending college for my Master's in Accounting (I've taken out FAFSA loans for this)...hopefully once I graduate in 2013, things will be better then and I can try to move out once more and get a job.

Sheesh, after all this, I might as well submit a reader profile to FMF!

[Jonathan]

Wow, thanks for sharing! You definitely should consider a reader profile, as it's mostly written already! Sorry things have been so tough for you - it's definitely sad, I have friends from college that are insanely creative and artistic but are having a heck of a time as designers/artists - in today's market, it's a luxury to hire good graphic design talent. Best of luck with the accounting!

[FMF]

BD --

You know you want to (do a reader profile)!!!! ;-)

[Georgia]

BD - sorry things are so rough. I realize we need more money in the US because of prices being so high. But it does feel good not to be in the lowest percentage of the poor in the world.

I support 4 children in Myanmar and Africa and it costs me $25 a month for each. That covers their education, food and clothing for them and their family. It gives me incentive to give more since I am so well off. Actually I am even well off in my small town, since so many were farmers and paid very little into SS and so, receive very little. I have a neighbor who gets @ $600 a month to live on. I have SS and 2 small pensions.

However, and here it gets chancy, we have benefits in this country that take care of a lot of this low income - medicaid, low income housing, food stamps, hospitals that can't turn us away if no insurance. Even with very low income, there are programs to take advantage of and help us pull ourselves up in life. Most other poor countries do not have this option. Look at all the people dying in Somalia (?). Even the homeless in our country are better off than those in the poorest sections of the world because they have options others don't.

Don't give up. I'm hopeful that my hint about TSD will help you. I know I am always happier when I can help someone else out.

I guess I wouldn't make a good salesperson. I can talk you into buying something and then talk you right out of doing it. I guess it's because I almost always see both sides of the question.