Magic Number

MY MOM AND DAD split up when I was seven years old. Money was an issue for the rest of my childhood. Mom was rarely able to work fulltime and, according to her, child support and alimony were never enough.

When I started working a newspaper stand at age 12, I was expected to give 25% of my daily take for rent. Mom also demanded that I save at least 10%. Depending on the headlines, I would make between $1.50 and $3 each day. Each night, I would drop a few coins in my savings cup. I never had an allowance, but I was a high-roller when it came to hanging out with my middle-school friends over cokes and candy bars (which might mean I wasn’t too good at saving).

To my mom’s chagrin, I didn’t share her passion for saving money as I grew into young adulthood. Between a growing gambling addiction and a penchant for using credit cards to finance everyday life, my financial life was in ruins by my early 20s. Thankfully, I got help for the gambling addiction and fell in love with a woman who took financial management and budgeting seriously.

On our second date, I went to her apartment to pick up her and her three-year-old son to see the latest Disney movie. She invited me into the kitchen for a drink of water. On the refrigerator was her biweekly budget for all the world, and maybe especially me, to see. It wasn’t a rounded-up budget, either. It was a “$78 for food, $11 for telephone, $35 for gas and $43 for savings” type of budget. It scared me so much I almost didn’t ask her out again.

I have now been married to her for more than 35 years. While we eventually overcame our money differences, the early years were sometimes challenging. I could, and probably will, one day write about how a budgeter and a non-budgeter came together. But I want to focus on something different: the magic numbers of financial management. Or what I sometimes have preached and taught: how to enjoy both financial peace and prosperity.

I don’t remember many financial instructions from my first 25 years of life—except to save 10% of anything I made. My wife and I were raised by parents who survived the Great Depression. They demanded, cajoled and begged us to save at least 10% and promised that, if we did, our financial future would be secure. My wife heeded their advice. Me not so much.

As I got older and started caring about financial matters, I learned there were a lot of mathematicians involved in giving financial advice. Every year, the perfect percentage of stocks and bonds in your asset allocation, as well as the right sum to take out of your paycheck to put in a 401(k) and to put toward an emergency fund and to cover living expenses, seemed to change. If you only save 10% today, you might be in big trouble in 20 to 30 years, or so some said. Recently, I read an article that said the magic numbers now are 50-30-20. Meaning what? Spend 50% on needs, 30% on wants and 20% on your financial goals.

I didn’t grow up near any religion. When my wife and I began attending a “trans-denominational” church in the mid-1980s, the message was a little Western, a little Eastern and a little new age. The community was what we enjoyed most. Every Sunday, a lay person or couple shared something about giving and generosity. One couple, who was our age, talked about tithing—giving away 10% of their income—and how it changed their lives. My wife and I were intrigued. Who doesn’t like giving money away? I started researching and my wife started budgeting. I was convinced there was something “magical” in the 10% number, plus it was easy to figure out.

We decided to start giving away 10% of our income to God and the good. We looked at our budget and added 10% to give away—after we paid taxes, the mortgage, food and childcare. It was a small number, but it was 10% of something. Each year, we gained the courage to bump up the number. Finally, one year, I suggested to my wife or she suggested to me—we don’t agree on this one—that we go for it and give away 10% of our income before deducting taxes and everything else. We built our budget to include 10% tithing, 80% living expenses and 10% savings. It became easier and easier to do.

But when I left the corporate world to attend seminary, we had a decision to make. We couldn’t do 10-80-10 (tithe, spend, save) on our limited income. My wife and I looked at our budget and decided 10% tithing was more important than 10% saving. For four years, we saved nothing but continued to tithe. We survived financially and we became convinced the right formula for us was to give away 10% first and figure out the savings later. We never told our parents, but it worked out and continues to do so.

We have now tithed for more than 30 years. I tell people it’s the greatest spiritual practice and leap of faith I’ve ever taken. Giving away 10% of anything we earn to people and organizations that may need it more than we do, and are doing something good for the world, is a constant reminder that we have enough—even when we’re afraid that we don’t. I would never have quit my job or gone to seminary if we hadn’t started doing this. It’s hard to explain the sense of joy, peace and faith I’ve experienced from trusting there’s enough to share with others.

Giving away 10% of one’s earnings seems impossible to some. It sure did to us. But in working with individuals and organizations over the years, I’ve seen the power and delight that comes when people learn how to do it. I have never met an ex-tither. I only meet people who want to learn how to be able to take care of all their wants and needs, and to give to others as well. Although I joke that I probably lost credibility in recommending tithing as a core financial practice when I became a minister, the truth is I was a tithing sales manager, tithing training manager and tithing unemployed seminarian long before I was a minister.

Financial peace of mind without financial security is difficult and perhaps dangerous. Financial security without peace of mind is a recipe for greed and lusting for more. The 10-80-10 guideline has provided us both financial peace of mind and relative prosperity. From my experience, it’s the closest you can get to a 100% financial guarantee—if your goal is both peace and prosperity.

Don Southworth is a semi-retired minister, consultant and tax preparer living in Chapel Hill, North Carolina. He recently completed his Certified Financial Planner education. Don is passionate about the intersection between spirituality and money, and he encourages people to follow their callings wherever they lead. Don’s previous articles were Answering the Call and Twin Certainties. Follow him on Twitter @Calltrepreneur.

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