How do you all track religious tithing with variable income?
I do 10% tithing but my income is variable each month, anyone have examples of how they do it? It feels like I cant actually budget it as this month it could be 500 dollars and next 1500...
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If you're a month ahead, Jan income funds Feb all at once. Tithing is just another category. The monthly amount is known in advance, so easy to compute a percentage if that's your approach.
Variable income can also be normalized to minimize the impact to the budget. Income above the average is stashed in a Deferred Income category. In a below average month, money is pulled out to supplement to the average level. (The rest of the budget targets the average income level.)
I would suggest prioritizing getting ahead to where you can push all income into next month. The deferred income category is a secondary consideration, IMO.
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Not sure what the tithing payment rules are, but any time you get income into your TBB you could just budget 10% of that amount to a tithing category and the rest to whatever other categories you want. At the end of the month (or whatever the time frame is) just pay whatever you've budgeted to the tithing category.
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Periwinkle Flute I tried that approach and an issue that came up for me is that with a lower income month, 10% might not be affordable. But when the check is higher, 15% or more could be affordable. That's why in a similar situation i like to track over a year , rather than just budgeting x% of any income received.
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Ivory Storm If you're not already doing it, I think you would benefit from normalizing income to yield a consistent "effective income". The more consistent things are (or appear to be), the easier things are and the less the chance of a mistake. This impacts the entire budget process, not just coming up with a number for tithing.
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Ivory Storm I don't tithe, but I suggested something similar in another group, and was met by a rather "emphatic" reaction. Apparently when tithing you're supposed to pay 10% of your income immediately (or weekly, monthly, ?, hence my comment about the "rules"). You're not supposed to wait until you can afford it and then make up the difference...
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Periwinkle Flute Making charitable donations - to a church or other organization - is different from "tithing" (which, from my understanding, is a biblical thing).
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Periwinkle Flute yup, I'm speaking from my own religious context, but I'm sure the practice is differently conceived in different religious settings. "Tithing" is biblical but like many aspects of the Bible understood differently in its specific aspects by different readers. I think that on some understandings, the normalizing income strategy wouldn't work for the 'immediately' crowd either, since it works by introducing delay in money expenditures. . .
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Ivory Storm In the mandatory immediate tithe case, it would be a simple matter to tithe off the top with every income event and normalize the remainder. In that case, I would treat that as a reimbursement (the viewpoint being it's not your money) and directly categorize 10% of the inflow to the Tithe category instead of TBB.
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I have a lot of misgivings about the modern concept of tithing, because it has been changed from the intended purpose for which it was originally commanded.
But if you are going to do it, do it in a manner that works best for your personal finance situation rather than blindly doing what some human who thinks he's more in touch with a higher power than you are (and yet knows nothing regarding your personal finances) tells you what to do.
Be smart about it.
(For the record, I'm a practicing Jew, and as a Jew we question everything. 😉 )
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What I do is use the Reports. I have a category group called "justice and compassion" with the various causes and contributions I make. Some of these expenditures are a fixed amount each month, some are commitments I make over several months, and some address needs that I keep an eye on but only contribute sporadically or at the end of the year when I'm cashing things out for the new year. My fixed commitments are all ones I can meet even when my checks are on the lower side. (So for instance I keep a very low pledge at church, but then I kick up my actual contributions through various routes depending on what income comes in).
I aim for spending from this group to be in a range of 12- 15% of my total spending over a yearlong period. By looking at the spending pie chart, I can easily see if I am in that range. If I notice spending going towards the lower end of the range, then next time I get a bigger check, I make sure to stretch and give a lot. So maybe set a range for yourself like 9-11% of your total spending for the year.
Right now I am carrying debt and I decided 12-15% of my spending was appropriate (as opposed to 12-15% of my income). When I am out of debt, I'm sure there's a way to use reports to track spending in a category group as percentage of income, rather than percentage of spending. -
DanD said:
It feels like I cant actually budget itMaybe you’re not fullyYNAB budgeting quite yet? In YNAB, you get money, and then you budget it. So you’re not predicting how much10% of your variable income will be. You know how much the income is because you’ve already received it and then you are setting 10% aside.
So each time you make an income transaction, 10% of the resulting TBB goes immediately to your tithe category. You might choose to also get a month ahead (recommended, especially with variable income) and so then you’ll have to choose if you set aside/send the 10% right away or if you do it when you budget the next month. Either is fine and depends more on your spiritual practice than your financial although doing it at the same time as budgeting and not the same time as receiving the income certainly simplifies things.
I set aside my giving with each paycheck, and that category gets hit every month for a few regular gifts I make, at random throughout the year for ad hoc giving I want to do, and then I make sure it’s empty at year’s end.
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WordTenor Ya I was thinking that last night....I have a -xxx number right now in the budget column accounting for the fixed expenses but the "To be budgeted" money has not arrived in the first paychecks...
I am assuming this is normal...part of the month you will look like you are in the read but only because of paycheck timing?
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DanD red*
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DanD no you should not have a negative tbb. When your tbb is $0 you stop budgeting. Ask yourself, what does this money need to do until I’m paid again
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DanD yeah that's not correct. There should never be a negative. Only budget the money as it arrives. Budget it to the highest priorities that must be paid before your next income arrives. Warning: this will freak you out for a few months until you build up a buffer. I think that's part of the point . . this practice really brings you into touch with how on-the-edge your finances might be.
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DanD Nope. And this is undoubtedly why the tithing thing is confusing you.
You budget only the money you have now. When you get more income, you add to the categories. If you don't have enough yet to cover everything you'd like to cover for the month, you leave those categories un- or under-funded.
There are lots of bells and whistles now to help you do this, like goals and scheduled transactions which interact with the budget, but ultimately, you are taking money on hand and divying it according to what it needs to do next. One of the divvying ups that you'll do will be that 10% for your giving. So you'll always know how much is 10% because it will be based on income you've already received.
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I basically have an automatic withdrawal for the minimum amount. Then each month if I earn more than that I take 10% minus the already paid minimum and give separately. There have been a couple months where money was tighter and I didn't tithe then made up for it after. (Although, in my heart I believe that tithing should be the first thing off the top before bills etc.)
