So today I need something to write about. I was going to grab an article I wrote but unfortunately didn’t save to my pc, but the site where I posted it for approval has been down for the past several days. You’d think this geek would have learned long ago to save things locally before sharing them online! *sigh*
The topic is about household finances. The first post I made about this referenced three different steps to take when managing household finances. The first step had three points to it: 10% tithe/charity, 10% savings, 20% spending.
This particular habit began for me when I was a young child getting ready for kids camp at Nanoose Bay Pentecostal Camp back in 1978. I had three envelopes under my bed. One held my tithe money, one held my savings for camp, and the last one held the money I could spend however I chose. As a child, this was easy to do. Any birthday money, Christmas money, spare change I found on the street, etc, would get divided among these envelopes.
As an adult, it’s not so easy, but if one has the income to manage it, it’s honestly the best way to go. In fact, financial advisors will tell you that if you can put 20% into savings and live off the remaining 70% of your income, you will be in a better position to retire in later years.
The change from saving as a child to saving as an adult carries with it quite a few more responsibilities in this issue of financial management. Your 10% charitable giving becomes eligible for tax returns, almost becoming a savings account of it’s own, minus the ability to earn interest. Your savings account will begin to earn interest the more it grows, adding more to the pot than just what you put in every pay cheque. This is one of the ways that your money can work for you.
The spending account is where child to adult experiences the biggest change! Now you have bills to pay, rent, transportation costs, groceries, etc. Your actual spendable cash is quite a bit smaller after all the bills are paid. But it begins with a disciplined attitude and behaviour toward how that pay cheque gets divided up before you start spending it. Developing a healthy financial foundation is key to the other two points in that first introductory article I wrote.
What percentage of your income goes to charitable giving now? What percentage goes to savings? What percentage are you living on?