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One of the biggest issues around right now is debt; watch TV for half an hour and just see if a lot of adverts aren’t for payday loans, consolidation of loans, weekly payment stores and ‘buy now pay next year’ deals.
So when it comes to giving money to the church, a key question that a lot of people have is surely: How much should I give if I’m in debt?
I’m not giving a definitive answer here, but I’d like to suggest that the answer should be: Nothing yet, lots later. The reason for this answer is that if I’m in debt then the money in my bank account is actually owed to someone else, so (1) whose money am I giving to the church, and (2) how much am I giving to whom?
Before I get into the meat of this post I think it’s worth saying this: if you’re currently in debt so are reading this from a position of real-life experience but look at all the numbers below and think ‘nope, don’t understand it, it’s all too complex,’ I’d encourage you not to bury your head in the sand! If you need, print this post and take it to someone who does understand finances and can apply this to your specific situation.
Maybe an example will be useful. Imagine I’ve borrowed £5,000 to buy a car, and pay back £150 per month at 10% interest per year. My income means that I’m able to give £100 per month to the church. I now have two options:
Option 1 – Give Now
So I’m a bit of a geek and created a spreadsheet to work this all out for me, but if I give £100 per month then over the next 41 months (more than three years) I would have given £4,100 to the church, and £5,882.08 to the lender.
So I’d be down about £10,000, the church would be up about £4,000, and the lender would be up almost £6,000.
Option 2 – Give Nothing Yet
As an alternative, instead of giving that £100 to the church, what would happen if I paid off the loan using it? Well, that way I’d pay off the loan in 22 months instead (so that’s less than two years), and I’d have paid the lender £5,492.44. By planning ahead, drawing up a decent budget, it would be possible therefore to re-engineer my cash over the same period of time (41 months) like this:
I’d be down the same £10,000 or so but the lender would be up less, and the church would be up £4,489.64 – that’s a difference of nearly £400 that could be used to feed the poor.
Conclusion
I’m not for a moment saying not to give; our fallen minds quickly look at the numbers above and think ‘but I could give the same, and keep that £400 for myself!’ What I’m saying is that instead of giving that £100 now, you look at what that £100 is worth over the life of the loan – in this case it’s worth almost twice as much if you pay it off now, so I’d drop an IOU into the pot for £190 per month!
Does that make sense? It does to me.
