How Does Religion Impact My Money Management?
Religion is an important influence for many when it comes to money management. As covered in the ‘Borrowing Money’ module, some religions (notably Islam and Judaism) forbid the practice of charging interest with financial products. Additionally, several fundamentalist denominations within Christianity, Islam and Judaism condemn commercial consumption that has the sole purpose of self-satisfaction.
Whilst a range of practices occur across a broad spectrum of religions and denominations, there are some commonly occurring systems of money management across most major religions.
Investing in Your Faith
Members of certain Christian, Jewish and Islamic groups in the UK will pay a form of tithe. Paying tithe historically meant you paid one tenth of your income to a religious organisation, but today the amount varies.
Many Christian denominations support their churches and pastors with monetary contributions of one sort or another, often referred to as tithes whether or not they actually represent ten percent of anything. Tithes are common across most Christian denominations but especially prominent in Pentecostal and Mormon communities, where giving 10% of income is the norm.
Zakat (alms giving) is one of the five pillars of Islam and commonly involves giving 2.5% of one’s wealth (beyond personal needs) annually to the needy, or to local mosques who will redistribute it accordingly.
Sikhism’s Daswandh states that one tenth of one’s income should be donated in the name of God.
Orthodox Jews commonly practice ma’aser kesafim, where it is a custom to give 10% of one’s earnings to charity
Where Do Your Investments Go?
Whilst you don’t receive stocks and shares for parting with some of your money in a church, synagogue, mosque or temple, this is a still a real investment. As well as providing a financial base for the maintenance of the building where you conduct your prayers (and a small fund for the pastor in Christianity), different religions and their denominations will typically deploy the cash to support favoured causes.