Should You Tithe When You’re in Debt?

The answer isn’t as clear cut as you’d think.

Should you tithe or give charitably when you’re in debt? I know tithing as well as other types of charitable giving are more moral decisions than financial ones, but it seems irresponsible to do so without considering your entire financial picture.

Deciding whether to tithe or charitably give — and how much — is a deeply personal or moral choice and one that depends on varying factors.

“This is a highly personal and emotional decision involving an individual’s personal preferences, values, and religious beliefs,” says Jane DeLashmutt O’Mara, CFP®, and portfolio manager with FBB Capital Partners. “While some may argue that it is a moral obligation to repay his or her debtors, others may feel they have an obligation to give to their church or to a person in need. The most important thing is to create a budget for yourself so that you are not surprised by the consequences of your choices.”

We break down the major factors to consider when considering how much to tithe or charitably give — if at all — while in debt.

Tax Deductions

One of the major benefits of charitable giving or tithing, apart from the good karma, of course, are the tax benefits. More good news? According to the IRS, there is no difference between donations to charity or a tithe to a religious organization in terms of tax benefits.

“There’s no difference in tax treatment between donations to a charity or a tithe to a religious organization, assuming both are considered “qualified organizations” by the IRS,” says Liz Davidson, founder and CEO of Financial Finesse.

“Cash contributions are fully deductible, up to 50 percent of your adjusted gross income (AGI). The amount you can deduct may be different for property, depending on the type of [donated] property,” she continues.

In order to reap the greatest possible tax benefit, your total itemized deductions, such as property taxes, mortgage interest, and charitable donations, should be higher than the standard deduction ($6,350 for a single filer and $12,700 for married filing jointly in 2017), Davidson explains.

The IRS Publication 526 has more complete guidelines on charitable giving.

How Much Should I Give?

“By definition, a tithe [is] a payment representing one-tenth of one’s earnings, although the amount that someone chooses to ultimately give to the church or other charitable organizations should be determined, in part, based upon the amount of discretionary income available to make such contributions,” DeLashmutt O’Mara says.

For example, if your expenses already represent 90 percent or more of your monthly income, 10 percent might not be a realistic giving goal, she explains.

Brandon Bennett, CFP®, advisor and principal at RhineVest Advisors LLC in Cincinnati, Ohio says that if you truly want to charitably give, you can make it work regardless of your financial health. He suggests creating a “reverse budget” in which you prioritize paying yourself first and making charitable contributions, then allotting the remaining toward your discretionary and nondiscretionary spending.

“It’s a very personal choice, but it’s important to prioritize your goals based not only on the correct financial decision but also your own morals and beliefs,” he notes.

But he recognizes that the issue is complicated.

“This isn’t a financial decision — it’s a moral one,” he says. “If you’re paying someone else to borrow money, clearly it’s not going to be in your best financial interest to give it away. However, if tithing or giving charitably is a core part of your ethos and morals, then you need to find a way to prioritize your goals and budget to make it work.”

Davidson points to this possible solution: Base the amount you are able to give on your current situation, then increase the amount as your financial situation improves.

“There is no ‘one size fits all’ rule for how much to give or tithe,” she says. She suggests those new to giving start by setting aside 1 to 2 percent of their income for giving, then increase that percentage each year until the goal is met. Another way to start is by simply giving a dollar amount.

But giving should only be done when you are in a financial position to do so, Davidson stresses.

“Whichever way you choose, you’ve got to make sure your own financial oxygen mask is on securely before you implement an aggressive giving strategy,” Davidson notes. “Make sure that your giving doesn’t upend your financial goals, such as building a strong emergency fund, having adequate insurance, and contributing at least enough to your retirement accounts to earn your employer match.”

Attack Debt While Giving

It is possible to pay down debt while giving. You just have to smart small.

Give a smaller percentage until your debt is paid off, or even just give your time, then increase the percentage of your gifts later, Davidson suggests.

“If you are in the middle of tackling debt but want to give or tithe, recognize that you might not be able to give as high a percentage of your income as you may like, or you may only be able to give your time,” she says. “That’s OK. It’s most important to first pay your obligations. After that, a small amount – if you can – helps you feel like you are connected to the wider world and recognize that as big as our problems are, we can help others.”

Sticking to a budget will also help reach your giving goals.

“Create a budget, and stick to it. Then revisit your budget at least annually (or when changes occur in your income or spending habits), and make adjustments to your budget. [W]orking with a certified financial planner professional will help you determine ways to improve your budget,” DeLashmutt O’Mara says.

Bennett says that it is possible to pay off debt and give simultaneously.

“This is all about order or importance. If you really want to attack debt and give, you can do both,” he says. “Sacrifice budgets in other areas like discretionary spending. When tackling debt, prioritize high-interest debt first. As lower balances are paid off, shift the monthly payment you were making towards the paid off account to another debt.”

Other Options

If the numbers simply don’t add up for you to achieve your tithing or giving goals, there is another answer.

“Volunteer!” Bennett says.

Davidson agrees.

“Give your time and your effort instead of money. Volunteer to help out the organization of your choice,” she says. “ You can even deduct the expenses you incur providing services (but not your time or the value of the service). That’s a wonderful way to do well by doing good.”

Join the Discussion

5 Responses to “Should You Tithe When You’re in Debt?”

  1. YComments

    It’s an interesting question! Getting into the head of ‘believers’, they often take the approach that all things come from God, so therefore, giving some back to God is not a burden. Also, they believe if they have faith to pay the tithes first, even when finances are tight, that God will take care of them. And ultimately, if they feel spiritual for following what they believe is a law of God, then that peace of mind can be well worth it. Another perspective.

    • Kathy

      Faith and your love really is the crux of tithing. Since God ultimately possesses everything, there is nothing you can give Him that is not already His. The miracle of tithing is to give 10% back of what He already gave you in the first place and witness how the remainder of what you have left will bear more fruit than it would have had you not–this takes various forms. (Think of the verse of how Jesus multiplied the loaves and the fishes — it fed many, but more importantly nourished them physically AND spiritually). It is noted that this act should be done as a joyful giver (not to begrudge the act, as then it is not in your heart, but a mere duty). Resources given vary based on your blessings …time, money, talent.

  2. Ericka

    I tithe regularly to my church but I actually have a set amount that is auto deducted every pay period. It isn’t 10% because I cannot afford that now but it is something. However, whenever I get a bonus, I do tithe 10% because a bonus is ‘extra’ money to me. I feel good about tithing and I feel like my life has benefited greatly since I’ve started tithing regularly. Once I’m debt free, I do intend to increase my tithes and work my way up to the 10% goal!

  3. 2abner

    It Is Written:
    ” Bring ye all the tithes into the storehouse, that there may be meat in my
    house, and PROVE ME now herewith, saith the Lord of hosts, if I will not
    open the windows of heaven unto you, and pour you out a blessing WITHOUT measure.”
    Malachi 3:10

    BTW, the founder of colgate-palmolive purposed in his heart to tithe regardless, & was so blessed (as we all know), he ended up doing the opposite: giving 90% & retaining 10%
    tithing goes beyond religion; it is a business deal done between anyone & the Creator God..

  4. Teresa

    I’m so glad to see others sharing their experiences. I noticed years ago, when I reduced my giving, it seemed the financial situation worsened. During that period, I determined giving is a priority. I’ve been up and down financially, but our needs have been met. My daughter decided to go to college in another state–my home state, and because of my VA disability, she was able to attend for free. We didn’t know that when she discussed living with grandma and going to school there. I started a job after retiring from the Navy, and financially things improved. Then I lost that job–I prayed and asked whether I should adjust my giving and distinctly heard that I should not; continue giving and watch how He can provide. I had a variety of jobs, making much less $$, received unemployment for a while, finished my BA and master’s degrees, but never reduced my giving. God provides!!!