Tithing and Savings
By Richard P. Halverson

I want to emphasize the title says “Tithing and Savings” not “Tithing or Savings".

Tithing and savings have a lot in common.  With tithing settlement about to get underway now is a good time to review them.

Priority

Those who are faithful tithe payers make tithing their highest financial priority.  Tithing is paid ahead of other obligations.  It is my experience and observation that those who make tithing their highest financial priority find it easier to meet their other obligations.

Savings must be right behind tithing as a financial priority.  Successful tithe payers usually write a check for tithing first.  The second check should be for savings.  Of course, today many people can have savings deducted automatically.  No such mechanism exists for tithing.

Making tithing and savings a habit and structuring their payments so that it is not necessary to reconsider them each month is the most successful way of meeting these important financial priorities.  Incidentally, the government understands this logic.  That is why the law requires that taxes be deducted from your paycheck before you ever get it.  Can you imagine what might happen if the government left it up to people to pay their taxes when they felt like they could afford it?

Predetermined Percentage

The Lord has told us that tithing is 10% of our income.  It is not necessary for us to get to the end of the month and figure out how generous we feel we can be with the Lord.

Successful savers establish equally firm percentages.  No spiritual or financial law says that your savings percentage must be 10% but that is certainly a good number.  A predetermined amount makes it easy to calculate how much to save and set up automatic systems to achieve the goal.  In this way it is not necessary for us to get to the end of the month and figure out how generous we feel we can be with our savings.

The Lord Wants Us to Pay It

In the case of tithing the Lord has established it as a commandment.  In the case of savings the Lord has established it as strong counsel.  General Authorities have consistently counseled Church members to live within our means and save for future needs.  I have never counted the number of General Conference talks that touch on the subject of tithing and those that touch on the subject of savings.  However, I wouldn’t be surprised if they haven’t received about the same amount of attention over the years.

Annual Review

Tithing settlement is just about to begin for thousand of bishops and millions of members through out the Church.  This provides opportunity for members to review their personal records and compare them with Church records.  Errors can be resolved and members can make up any deficiency.  Tithing settlement also provides the opportunity to declare to Lord’s called Judge in Israel that we have been honest with the Lord.

This is also a good time to review our savings.  If there are deficiencies it is well to take this opportunity to correct them.  The Lord has not asked us to meet with the Bishop or anyone else to review our actual savings versus our budget savings.  However, it is a good time to meet with ourselves and ask if we have been honest with us?

Use One to Pay the Other

Here is what I mean.  The U.S. Government allows us to deduct our tithing from our taxes.  Not all world government’s do.  Further, charitable contributions, and church contributions particularly, get challenged all the time by people who believe they should be eliminated.  In this case Congress not only allows the deduction of charitable contributions it has gone a step further.  Citizens can contribute appreciated property, such as common stock, and deduct the full value on their taxes without paying capital gains tax on the appreciation. 

Assume a member invested $1,000 in a mutual fund that is currently worth $2,000.  Assume the member owes $2,000 in tithing.  The member might sell the mutual fund.  He will receive $2,000 in cash.  He will also have a $1,000 capital gain which he must pay tax on.  Assume the member must pay 15% capital gain.  In this case he can use the $2,000 cash to pay tithing in December and will then have to take another $150 out of his pocket to pay capital gains taxes in April.

A smarter move is to donate the $2,000 in mutual fund shares to the Church for tithing.  Our member is a full tithe payer, receives a full $2,000 deduction on her taxes and incurs no capital gains tax on the stock.

I encourage people to plan for this well in advance.  Make regular monthly deposits into an account earmarked only for tithing.  Then at the end of the year you can contribute appreciated assets like mutual funds for your tithing and immediately replace the contributed shares by using the money saved for tithing to re-buy the fund shares.  Your tithing is paid.  Your stock portfolio is the same.  You have saved taxes.

It is legal and acceptable both to the Church and the Government.  Look at it this way.  The government wants you to pay your tithing and has written the tax laws to help you.  (Not really, but it works out that way.)

Note:  Don’t forget to pay tithing on the capital gain portion of your appreciated asset whether you sell or contribute it.  Tax law makes a special exception for contributing it as I have explained.  Tithing has nothing like tax laws associated with it (thank heavens).   The Lord’s law is simply 10% of your increase.  A realized capital gain is an increase in my opinion.

Blessings

Nearly all faithful Church members know from personal experience that when they pay tithing they receive blessings.  There are many stories of people paying tithing and then receiving money from a miraculous source.  The fact is there are far more miraculous stories than we realize.  It is my experience that faithful tithe payers receive blessings managing their finances.  The Lord helps them be wise and be disciplined and helps them manage their finances.  Often the blessings are so subtle it is difficult to recognize the hand of the Lord.

I need to be clear.  Tithing is a commandment not an investment.  There are plenty of faithful tithe payers who find their finances a constant struggle.  No commandment of any kind has ever been given with the promise that the Lord will remove all opposition from us.  That is not part of the Plan of Salvation.  Further, paying tithing is not designed to overcome our poor use of free agency.  However, if you think managing your finances is tough with the payment of tithing you should see how tough it would be without paying tithing.

I believe faithful savers receive similar divine help.  The Lord has counseled us to be self-sufficient.  The road to financial self-sufficiency is through saving. It is my experience that faithful savers receive blessings managing their finances.  The Lord helps them be wise and be disciplined and helps them manage their finances.

Tithing and Savings

I believe tithing and savings are related – financially and spiritually. I have no scientific studies to back this up but I firmly believe those who pay tithing faithfully receive divine help in saving and those who save faithfully receive divine help in paying tithing.