How can I make effective decisions about tithing, saving and debt reduction right now?

An economic downturn can upend even the best of economic plans.

But the principles one should use in setting priorities for generosity, saving and debt reduction don’t change in good or bad times:

• Recognize that all we have ultimately comes from the Lord and belongs to him (Deuteronomy 10:14).

• Be generous with the Lord as a way of thanking him for the many gifts he has given you. The world says pay yourself first, but the scriptural principle is to pay God first (Proverbs 3:9).

• Have a plan and keep working the plan (Luke 14:28-30). Develop appropriate savings and debt reduction goals that fit current circumstances. Build those “expenses” into your plan, and learn how to live on the remainder.

Determining how much to give in stressful economic times can be difficult, but it continues to be an obligation that we need to take seriously. Canon 222 of the Code of Canon Law describes the obligation we have to be generous with the Church, its ministers, its apostolic works and outreach to the poor. While the tithe (tenth) continues to be an important guide for determining how much we should give, the Church leaves that decision up to us. How can you make a faithful and prudent decision?

On the one hand, consider the Old Testament stories of Elijah and Elisha, where widows were miraculously provided for (1 Kings 17:7-16 and 2 Kings 4:1-7). On the other hand, Pope Leo XIII said, “No one, certainly, is obliged to assist others out of what is required for his own necessary use or for that of his family.”

A good place to be when it comes to generosity, whether in good times or bad, is to give to a level that makes you stretch a bit — to give to a sacrificial degree. The Lord will honor such gifts, no matter the amount, because they are given out of love.

Before you decide how much to give, save and apply toward debt repayment, it’s critical that you develop an annual financial plan that factors in those assumptions. Otherwise, you’ll find yourself playing a shell game with your money, feeling like you are making progress one moment, only to be caught off guard by unexpected bills at another moment. Developing an annual plan helps you see the big picture so you can make appropriate allocations between savings and debt reduction, while insuring the remainder is adequate to meet your needs.

When developing your plan, focus on establishing or maintaining your $2,000 emergency fund, accelerating the repayment of unproductive debt, then building your rainy-day fund. You want to accomplish these basic steps in relatively quick order so you can set about the business of saving and investing for retirement and your children’s college education. If you wait too long, you lose the benefit of compound earnings, which play an important role in helping you reach your goals.

God love you!

Phil Lenahan is president of

Veritas Financial Ministries (

and author of 7 Steps to Becoming Financially Free: A Catholic Small Group Study (OSV).