2 Questions About Giving from Gross or Net Pay

Dear Jack,

One of the most frequent questions I’ve experienced in the world of biblical giving (the word ”giving” used intentionally instead of “tithing”) is whether we should be doing our giving off of our gross or our net pay.  This is a legit question, and one I appreciate because it shows the commitment of the ones asking to be intentional about their stewardship plan.

My response to the question isn’t very cut and dry, to be honest.  It depends on a lot of things.  Most Americans receive their income through a W-2, meaning that they’re paid pretty regularly for their time/services, and the difference between their gross and net pay is going to be pretty close to what their individual tax bracket is, depending on the amount of deductions they can claim for any given year.  Small business owners have a more difficult time with this, as do individuals who receive large amounts of interest from investments.  And I’m not going to spend time talking about all the relative factors that would play out in these scenarios.  Instead, I’ll get to the main issue at hand.

The idea of gross/net income is actually relatively new, as payroll withholding taxes were only introduced in the last 100 years or so, a long time after the idea of giving (and, dare I mention, “tithing”) began.

What I’ve found more valuable than a standard response is answering the question with some more clarifying questions, such as these:

1. Are you saving from your gross or net pay?  What I mean by saving is any money going towards a short or long term goal (retirement, college, car replacement, etc.)  Many people save money into their company-sponsored 401k or 403b plans – and this money is saved “pre-tax” from their paychecks.  This means your final paycheck amount made payable to you is already a net figure.  The ratio of how much we’re saving versus how much we’re giving is a key indicator of if we’re investing in earthly or heavenly treasures.  And to get a good idea of what this ratio looks like, we need an apples-to-apples comparison of our saving and giving.
2. Are you trying to find the minimum amount “required” to give?  This is the big question.  As much as I appreciate people being intentional about giving plans, a potential flag is raised in my mind about their true intentions when asking if they should be giving from gross or net pay.  If we’re looking to find ways that lower our “required” giving, our heart isn’t in the right place, and this is serious cause for concern.  Evaluate your heart before you go any further – and if you find that you’re truly just looking to find ways to minimize your giving amounts, then I’d strongly encourage you to read and think about 2 Corinthians 9:7 (“…each one should give as he has decided in his own heart, not reluctantly or under compulsion, for God loves a cheerful giver.”).  I wouldn’t be concerned right now as much about the giving amount as I would be about finding out what is right in your own heart, and then being joy-filled in giving that portion, not feeling compelled to.

I think the reason these questions are so valuable in answering the gross/net pay issue is that they’re personalized to you.  It’s not a cookie-cutter answer.  Personally, we give off of gross – because our monthly budget is set up on gross pay.  I build the pre-tax withholdings (local tax, federal tax, FICA, health insurance, all the good stuff) into our spending plan for the month, and have a separate column showing the percentage of my gross pay that each category (including taxes) consumes.  This way I can have an apple to apple comparison of my savings percentage, tax percentage, giving percentage, entertainment percentage, housing percentage, and so forth.

 

The key, as you can see, Jack, is evaluating your heart.  I’m under the firm conviction that God is less concerned about how much we’re giving than He is about the condition of our heart (this is true of things way beyond finances).  Evaluate your own heart, and then the question of giving from gross or net pay should become evident.  Till next time, Jack,

Sincerely,
J.

5 Acceptable Sins in the Church

Dear Jack,

The past few weeks I’ve been leading a Sunday School lesson at a local church based around the Crown Financial‘s teaching material Discovering God’s Way of Handling Money.  I’ve really enjoyed doing this.  Part of this past week’s lesson was on honesty, and it triggered an interesting thought during my preparation for the class, and also sparked an interesting conversation during the class.  Namely: Christians find very clever ways to be dishonest, and not necessarily always feel bad about them.  This led me to think of sins beyond dishonesty as well.

Sure – most people would agree that grand theft auto, adultery, murder, and underage drinking are all examples of things we shouldn’t do.  But what about the more subtle sins that we seem to overlook?  I say this not from a pulpit of condemnation, because I’m just as guilty, but I want to share with you a list of five sins, in no particular oder, and only from my perspective, that the Church as a whole has seemed to gloss over and not put a whole lot of weight into.  I’m sure there are multitudes more, but here’s just five.

1. Petty theft.  I’m talking about piracy here.  Examples: putting a new Microsoft Office Suite on more computers than the license allows.  Stealing your neighbor’s wireless Internet.  Splicing the cable wire outside and then splitting the cost with the neighbors (the same ones you’re stealing the wireless from!).  Taking office supplies home that aren’t yours.
2. Taxes.  Originally I clumped this under petty theft, then realized it needed its own space.  Not reporting all your income on your tax forms is blatant sin.  Let me repeat: not reporting all the money your earn on your tax forms to the IRS is not what God wants you to do.  Just because we don’t agree with all that the government does with our tax money is NOT reason to cheat them.  Jesus said it plainly: Give to Caesar what is Caesar’s. And Paul enforced the idea again that we are to subject ourselves to the government that God himself has put into place.  That means obeying them in paying what we owe.
3. Speeding. I’m super guilty on this one (well, actually not in the past 5.5 months).  This is a sin that we don’t necessarily argue against from a logical or interpretative standpoint – it’s just one that’s willfully ignored.
4. Gossip and Slander.  Especially in the form of special group prayer requests.  ”Dear God, we pray for Jane’s son who is sleeping with his girlfriend, and who may have even started using drugs, and just yesterday mentioned dropping out of school.  Lord we know he frequents the bars almost nightly, and hasn’t been to a Sunday service in 3 months.”  Even outside of the prayerful gossip, Christians are notorious for wanting to degrade leaders, friends, and enemies alike.  We focus so much more on the negative than on the positive in life, that I’m sure it breaks God’s heart.
5. Being Stingy.  Yes, I’m calling this a sin.  There’s no reason not to tip more than 15%, even if the service is terrible.  There’s no reason to keep track of each dollar spent on each family member and being sure the debits and credits are reconciled.  There’s no reason to spend more on vacations than we do in charitable donations (ouch – did I just put that in print?).  There’s no reason not to buy the homeless woman a cup of coffee standing outside the coffee shop, even if your schedule’s cramped.  And the part that really gets me steamed: we trick ourselves into thinking that by starving generosity by withholding a few dollars here and there, we’re being better stewards.

Jack, once we’re in good standing with Jesus, sinning doesn’t send us to hell.  And we’re no longer enslaved to the Law – so there is no code that we have to follow per say.  But sin still breaks God’s heart.  And although we’re already forgiven from our sins, we should still do all we can to avoid it.  Additionally, we’re called to live radically different from the world around us – and intentionally seeking a holy, set apart life is a phenomenal way of living a life that demands a Gospel explanation.

My admonishment to you is simple: don’t overlook the “small” sins in our lives.  Yes, it’s a huge victory to stay faithful in marriage, but disrespecting your wife behind her back is still equal grounds for repentance.  As I said in my last letter, the power of perspective is monstrously powerful.  Till next time, Jack,

Sincerely,
J.

Thoughts on “Giving” versus “Tithing”

Dear Jack,

I’m not sure I’ve ever been so overwhelmed with thoughts before sitting down to write you a letter.  I feel like I need to give so much context to my thoughts – my full understanding of stewardship, my idea of what it truly means that God owns it all, even my personal hermeneutics in reading the Bible.  But we don’t really have time for all of that, so I’ll fill in the gaps as needed.

What I want to address is the difference, a potentially HUGE difference, between an understanding of “giving” versus “tithing.”  My good friend Daniel brought this up concerning a previous letter I wrote to you.  Specifically, he said:

In one of your replies above, you wrote, “…giving to God is inclusive of anything he’s using to redeem the world around us (including us), of which the Church is a big part of. A distinction between give/tithe is intentionally used in this instance.”

I would be very interested in more of your thoughts on this (perhaps another post sometime?). I find “giving” much easier and more fulfilling than “tithing.” I definitely give more to non-church charities than I do to my church itself.

Also, where does “Christianly” consuming fit in to this? I try to use ALL my money in economically just ways. That’s why (for instance) I don’t shop at Wal-Mart, and support local businesses as much as I can. It’s more expensive to buy things that weren’t made in sweatshops, or have less impact on the environment. But I know plenty of people who save money at Wal-Mart and then can afford larger gifts to the church. Is one more pleasing to God than the other?

Phew… the overwhelming factor hit me again.

Daniel packs a lot into this.  As always, I want to try to simplify and examine.  First, I think we have to actually take a step back and look at the bigger picture.  As a Christian, I believe that God owns everything.  Every.  Thing.  My checking account.  My Jeep.  My student loan.  My wrist watch.  It’s all His – I’m just being a steward of it.  And when I say steward, I mean I’m just taking care of it from a temporary standpoint … figuring out how to best use someone else’s “stuff” the way that I best think they’d prefer it to be used.  This is really where any concept of “stewardship” needs to grow its roots in.

So, instead of asking “How much money should I give to God?  10%?  15%?” we need to say “God, 100% is yours.  What do you want me to do with it?”  There’s no right answer to this question – it’s completely unique to each individual and family.

Now, let’s look at what a “tithe” is.  Without getting too in depth and bringing up all of the verses (I’ll just refer to the website of another good friend and fellow financial planner – Paul) my basic understanding is as follows.  In the Old Testament, where we were under the Law, we were required to tithe (give 10%) (and then tithe on the remaining amount, and then tithe every 3 years on top of that).  Had to.  No questions asked.  It was, literally, the Law.  Fast forward to the New Testament.  Jesus Christ, the savior whispered about in every Old Testament passage, comes and dies for us so that we no longer are enslaved to the Law.  We are free.  We’re no longer required to offer blood sacrifices to cleanse us from our sins – Jesus did that.  All of the laws, the codes, the interpretations, the sacrifices required … they’re all fulfilled because Jesus died for us.  This is the gospel, in its simplicity: grace.  Undeserved, unmerited grace.

Stick with me, Jack.  So now that we’re not required to follow the Law, does that mean that we’re free to sin and to live as we please?  Paul (the apostle Paul, not financial planner Paul) says in Romans 6 “No way!  Are you nuts?  In fact, if anything, if we understand the gospel fully, we should be all the more inspired to live holy lives.” (Loose, very loose, paraphrase).  Jesus even took the Law in several places up to a new level (Think Matthew 5.21-48).  So, what on earth does this have to do with giving?

We’re no longer required to tithe – but instead are urged to do even more, because we know first hand the generosity that Jesus had on the cross.  That is why giving is so much better of a word, and one that I wish the Church would be using exclusively instead of interchangeably with tithe.  A tithe, a literal 10%, is archaic.  It’s Old Testament.  It’s Law-bound.  Is it a sin to give 10%?  No, not at all.  I’d say it’s just as biblical as giving 3% or 50%.  The number isn’t important.  The motivation and generosity portion of it is.

Getting back to Daniel’s question, I loosely defined giving as “inclusive of anything [God]‘s using to redeem the world around us (including us).”  I think this is a fair definition of the word – but it’s as good as I can think of right now.  Now we need to link some of my thoughts together: God owns everything, we are stewards of all these “things”, we’re not required to give any fixed amount, and we should be as generous as Jesus.  What does that leave us with?  A lot of freedom, and a lot of responsibility.

I think that we should be generously giving to causes that we feel God is using the redeem the world around us.  If you sense God redeeming the world through your local church that you worship with, give freely to that.  If you sense God redeeming the world through fine charities like HOPE International, donate freely to that.  If you find God redeeming the world through local business owners, purchase freely through them.

Personally, I believe whole heartedly in the leadership at our own local church, and we give a majority of our giving percentage to that.  But I also believe strongly in HOPE, Compassion International, and having designated fellowship money to invite neighbors, friends, and family over for meals.  Is setting $50 a month aside so that we have enough to invite our neighbors over for dinner found in the Bible?  Maybe, maybe not.  I certainly won’t be able to write it off as a tax deduction.  But that’s missing the point.  The point is individualized generosity.  That’s the example that Jesus gave us in the Bible, and that’s the example that we should be setting in our giving.

I’ve written enough – and my head is spinning, so I’m sure yours is as well.  My take away is this, Jack: be generous.  You’re not bound by the Law anymore.  Be a good steward of what God’s entrusted to you – and give as you feel He is directing.  Till next time, Jack.

Sincerely,
J.

The Church Should Stop Tithing

Dear Jack,

Okay, this letter heading is admittedly a bit deceiving, but you’ll see what I’m saying soon enough.  My point is that in recent conversations with clients, friends, and family, I’ve realized that the goal of giving a tithe (literally a “tenth”) has done violence to a biblical understanding of money.

First off, a few points of clarification.  The commandment to give a tithe isn’t found in the New Testament.  A tithe was given in the Old Testament, but even that wasn’t necessarily 10% of your income… it was more like 23.5%.  (Really it is – but that’s a whole other conversation).  The New Testament rather talks about giving generously and freely as the Lord/Spirit directs us to.  It’s about radical generosity, something that I wish the Church (big C) was universally known for.

According to a Pew study, the average church goer gives something like 2.3% of their income.  And so then, whatever giving amount we’re doing, if we strive to give a tithe (one tenth) of our income, what happens when we reach this?  From my conversations recently, it seems that this is the ultimate goal: to work up to giving 10% and capping out there.  If we’re in a job situation that provides an increasing amount of income, I’d sure hope that the 10% giving budget line increases incrementally with the top line income.  Giving $3,000 while earning $30,000 is much more of a sacrifice than giving $10,000 while earning $100,000.  As our income increases, so should our giving percentages (not just dollar amount).  I think we pigeon-hole ourselves when we have a goal to give a “tithe,” and I’ve found that the Church encourages this by constantly referring to financial giving as a tithe.

The idea of a tithe subconsciously relays to us that if we “give God 10%” that means we have the remaining 90% to ourselves.   This is a powerful concept, and one that often goes undetected.  God owns 100% of all that we own – not just the bones we throw back at him.  God owns everything, and he cares about what we do with this everything.  I’m not at all a proponent of the poverty or the prosperity gospel – I firmly believe with all of my heart that we can honor God equally with our wealth whether it’s through two dollars, or a few billion dollars.  I think oftentimes Christians give their tithe (or whatever percentage) and then check off their duty of seeking God’s direction with what to do with the rest.

So what are we to do?  Here’s a couple of ideas to hedge against falling into the dangers of pigeon-holing ourselves into a faulty understanding of tithing:

1. Give radically.  Right now.  As in now.  Don’t wait till next year’s raise or until your retirement savings are started.  Decide to get radical with your giving.  Now.
2. Give outside of your home church.  Find some charities that you really get excited about supporting and give to them.
3. Keep some cash earmarked to give away.  As you see needs in front of you, give as prompted.  Don’t turn away a hungry mouth and say “You know what, I’m not sure if you’re going to buy alcohol with this – so I’m going to go home and pray about what I should do.”
4. Pray about what to do with raises and unexpected income/gifts before you spend them.  I’m hesitant to paint with too broad of a brush, but I’m inclined to say that for each raise you receive through work, your giving percentage should increase.  Okay, I ended up saying it.  Do it.
5. Don’t aim for 10%.  Don’t short change yourself (and Kingdom-building purposes) by aiming low and striving to give 10% of your income.  Start there – or higher – and see who can out give who: you or God.

Sincerely,
J.

National 401(k) Day – What To Do With Yours?

Dear Jack,

I just – and I mean as in the past 30 minutes – found out that there exists a National 401(k) day, and it is, in fact, being celebrated today.  According to http://www.401kday.org/, the official National 401k Day Website, the day exists to raise awareness of employer sponsored retirement accounts.  Just as retirement takes place after the working years, the day is celebrated just after Labor Day.

I think this is great – and brings me to think about my advice I give when telling people what to do with their own retirement savings, especially those who are younger in life.  Typical disclaimer: personal advice varies as everyone’s unique situations varies.  So take this for what it is: generic financial advice.

So, let’s create a hypothetical situation, for you.  Say you’re 27 years old, earning a decent salary, have a job that offers you a 3% dollar for dollar 401(k) match, and you have $10,000 in student loans.  You also have a mortgage, but no other consumer debt (auto or credit card).  My advice to you is to take advantage of your 3% dollar for dollar match, as you’re getting an instant 100% rate of return on your money, and aggressively pay down debt with any extra cash you have each month.

Even if you could afford to put 6%, or 10% into your 401k if you pay your minimum debt payments and other living expenses, I recommend just doing the match for now.  Some people may argue that the lifetime rate of return is greater if you invest your money (at say, hypothetically, 10%) than if you pay off your debt (again, hypothetically, at 5%) … but I’m going to say ignore that.  Why?

• Because I’m more interested in pursing Financial Freedom – and you’re going to find more freedom in being out of debt than you will with a bigger 401(k) account.  The example I use regularly is say you have a $200/month student loan.  You then come across someone in your church or neighborhood who could really use a $200 anonymous gift.  But you can’t give that $200 very easily, because you have to pay that monthly student loan bill.  You’re enslaved to that lender (Prov 22.7), and you have to make that payment.  Compare this to making a $200 contribution to your 401(k) or Roth IRA – you can unplug that, even if only for a month, and make that anonymous gift and feel great about it.  You have the freedom to do so.
• Additionally, there’s no guarantee that you’re going to get that said 10% return (and run, don’t walk, away from anyone who says they can guarantee a 10% return).  There’s a 100% guarantee, barring bankruptcy, that the lender will get their  5% return, compliments of you.  By paying off that loan, you essentially make an investment with a guaranteed 5% rate of return.

But once you do have your consumer debts paid off, I’m all for maxing out your 401(k).  Well, maybe maxing out a Roth IRA, and your spouse’s, and then with your excess cash flow going back to the 401(k) – but regardless, investing in some sort of retirement account.  I’m not really as worried about eliminating the mortgage before maxing out retirement savings – but do recommend paying extra on it as you can.

Happy 401(k) day, Jack.  Till next time.

Sincerely,
J.

The Best $5 I Ever Spent

Dear Jack,

As an upfront disclosure, I wrestled with whether or not to share this story.  I’m sensitive to the warning of people bragging about giving (see Matthew 6.1-4).  But, I’m more fearful of when giving goes too silent, because if it is done with the right heart, I think giving stories can encourage others to give more – and this is why I choose to share this giving story with you.

Last night I walked down to the CVS store, about a block from our home, to get Lydia some cold medicine and ice cream.  I had $6 on me in cash, and so I realized that I would need to use our debit card to make the purchases.  As I was checking out, I subconsciously heard to my left the following conversation:

Cashier: “That brings your total to $8.61 [or something close to that].”

Girl: “Oh.  [Silence]  Can we put the milk back then?”

Cashier: “Sure.  [Clicking away]  That brings your new total to $6.10 [or something close to that].”

Girl: “Oh.  [Silence].”

At this point I looked over, as it was kind of embarassing, as a number of people were looking at the scene, including me for the first time.  I saw two girls, maybe 16 and 14, in not the cleanest or most stylist of clothes, both looking at a single $5 bill held in the older one’s hands.

Girl: “I thought Mom said this would be enough.  Can we put the [other drink- I forget what] back?”

The Holy Spirit (and I say this with conviction) then took over.  I had finished signing my own receipt, and as I was putting it in my money clip took out my own $5 bill, and tried to give it to the girls’ cashier, who evidently was dumbfounded because she just looked at me blankly.  I then turned to the girl closest to me

Me: “Here, I think this should be enough.”

Girl: “Are .. you sure?”

Me: “Yeah, it’s no problem.”

Girl: “Thank you.  Thank you so much.”

The cashier took the bill from the girl and proceeded to get the change, and I told the girls to just keep the change.

I walked out of that building, still feeling the girls’ eyes on me, and onto Lemon St feeling high.  I couldn’t stop smiling.  I was so happy.  Five dollars.  I had to constrain myself from just bursting out with joyous laughter.  I think it was, in all honesty, one of the few times I was actually filled with the Spirit, and it was simply exhilarating.  I was literally the hands of Jesus in that brief moment.  God used me, I obeyed, and He flooded my heart with indescribable joy.

I got home, told Lydia the story, and couldn’t keep my eyes dry.  I have no idea how this is sounding to you, Jack, but it was unbelievably … good.  And all it took was $5.  Keep this in mind as you go about your everyday business, Jack.  You never know when the Spirit is going to prompt you – and when He does, be ready to respond and be ready to be happy.

Sincerely,
J.

5 Biblical Reasons to Give/Tithe

Dear Jack,

Another letter relating some of the information I’m learning from Ron Blue and Kingdom Advisors.  The module I’m currently going through is on Giving, both as a general element of life and also how we as financial advisors can help our clients give more.  Ron Blue talks about the five reasons why we should give money.

1. Obedience – God tells us to give.  A separate letter at another time will talk about the difference between Old Testament tithing and New Testament giving, but suffice to say for now, the Bible tells us we are to give our money away.  Paul instructs believers to set aside money on the first day of the week (1 Corin 16.2), and the Proverbs tell us we are to give our first fruits of our possessions (Prov 3.9-10 among others).  Paul also admonishes us to work hard so that we can have something to give to those who are in need (Eph 4.28).
2. Rewards – A byproduct of giving is the reward(s) we get from doing it.  Philippians 4.17 speaks of the fruit that comes from giving, and Jesus says that if we give, it will be given to us so much that it will run over and be poured into our lap (Luke 6.38).
3. Recognition of God’s ownership – When we give money away, we are recognizing that God does indeed own it all (1 Chronicles 29.11-12, 1 Corin 10.26, Psalm 24.1).  All we are to do is manage it for him, and not keep it all for ourselves.  We are also communicating trust when we give money away, trusting that God will still meet our needs.
4. Gain an eternal perspective - This statement is twofold: 1, we need to recognize that God is in control, not us, and 2, the treasures that we store up aren’t necessarily supposed to be in our bank accounts.  There is a saying that you can’t take anything with you to heaven, but you can send it ahead.  Jesus again talks about us being trustworthy with worldly wealth, and if we are found worthy, being entrusted with true riches, and riches of our own (Luke 16.11-13).  Giving away earthly possessions is an indicator of our paradigm that there is more to this world than the treasures we’re entrusted with.  Similar to training for a sport in that we repeat certain exercises to gain a certain physique or condition, giving money away helps us train to realize we’re truly not dependent on the cashflow that runs through our hands.  God is – and He’s the one who is going to take care of us.
5. Love – We are to give because we love others.  Part of our giving/tithing plan as a family is having money to give spontaneously to those we see in need.  1 John 3.17 talks about a brother seeing another brother in need, and John asks the question that if that brother who has giving capacity chooses not to give, how can the love of God abide in him?  Where is the compassion that Jesus displayed for the world?  It needs to be living and flowing through us.  This is the ultimate reason of why we are to give.

I encourage you, Jack, to develop a giving/tithing plan.  It is something Lydia and I are working on putting into writing, because God wants us to be intentional with giving.  Ron Blue says that “Stewardship is the only aspect of Christianity that cannot be faked,” and I completely agree.  The Church is in sad shape when it comes to giving – The Barna Group estimates that 37% of those who go to church regularly give $0.  In the 1990′s, a time of great economic growth, evangelical giving fell from 6.38% to 4.08% of income.  And circling back to those who to give to the church, only 3-5% give at least 10%.  It’s a sad story – and I feel God is holding back flood waters of blessing if we only choose to give more.  So I admonish you to give freely, give joyously, and give intentionally.  Till next time, Jack.

Sincerely,
J.

Financial Advice from dcTalk

Dear Jack,

On my way home from work the other day, I popped in an old, old CD: dcTalk’s Nu Thang, which was produced in 1991.  Aside from the astonishing discovery I could still match Toby Mac lyric for lyric, I was surprised by the depth and truth in some of their lyrics.  Specifically, their song “Things of This World.” All of the lyrics can be found here, but here’s my favorite part.

[chorus]
Things of this world are passin’ away
Here tomorrow, but they’re sure not here to stay
Things of this world are passin’ away
So lay your treasure above
And start to live for him today

Our mind transforms a want to a need
A simple process that we call greed
Ya say ya like to have money, well i do too
The problem starts when the money has you
Workin’ overtime to keep up with the pace
A lifestyle that you want to embrace
But it’s 2 steps from where your needs are met
You’re keepin’ up with the Joneses, but your all in debt
Which will lead to stress, not meeting the bills
While ya sportin’ a Benz with all the thrills
The domino effect’s gotcha life in check
A temporary stitch and ya livin’ a wreck

Love it.  “Transforming a want to a need,” “The problem starts when the money has you,” “You’re keepin’ up with the Joneses, but your all in debt,” “A temporary stitch and ya livin’ a wreck.”  Who knew?  Toby Mac, MTait, and K Love were financial advisors?  Till next time, Jack.

Sincerely,
J.