Ever thought about how religion plays a part in your finances? As a Catholic I’m trained to think in terms of tithing and such, but after reading about some other faiths out there – the Muslim and Jewish communities in particular – I am *blown away* at how different the role of money comes into play here.
This article in Money Magazine (pg.88, June ’09) showcased 3 families of these different faiths, and how they cope at being financially stable while at the same time keeping in good standing w/ their values. Not only was I unaware of most of these (big shock, right?), but it really hit me how GOOD these couples were at making their lifestyles work here in the U.S.! This excerpt sums it up perfectly:
“It is impossible to put a price on religious belief. But as Abbi Perets knows from her trips to Kroger, exercising that belief doesn’t come free. For the most devout practitioners…following their faith’s precepts often has a profound financial impact: Religion guides how they make, spend, and invest their money. And it often leads to financial decisions and stresses far different from those of people who don’t share their beliefs. “
Yeah for real, I am thoroughly impressed after reading some of these stories. While the Christian portion of the article was pretty interesting, I’m going to stick to the Muslim & Jewish differences here as they stood out the most to me. And again, this is all just from what I read in the magazine, I don’t claim to be an expert or anything ;) Here’s what I’ve learned:
Financial Management & the Muslim Family:
- Interest cannot be earned, nor paid. (according to the Qur’an, where riba is generally understood to mean “interest”). As you can imagine, this would be quite hard on the majority of us Americans!
- This means no credit cards, no mortgages, no car rentals, and even limited amounts of diversification within your retirement portfolio (since you can’t invest in bonds or any stocks involved in forbidden activities such as lending, gambling, and serving/making alcohol)
- Education may be an exception, but for the most part it’s going to take some massive creativity to finance big ticket items & expenses.
- Charitable donations should roughly equal 2.5% of your net worth. (if you follow Islam’s rules on zagat) Not sure how the net worth is calculated, but it seems that most Muslims give more than that allocated % anyways.
Financial Management & the Jewish (Orthodox) Family:
- Everything consumed must be kosher. That in itself didn’t mean much to me, but apparently it can get REAL expensive REALLY fast. We’re talking $9 grape juice and $14.99 brisket by the pound (instead of $1.99/lb). Talk about a budget buster!
- Meat & dairy products must be kept separate. That means potentially having TWO sinks, TWO ovens, and even TWO dishwashers! I’m sure there are ways of going about it without picking up 2 of everything, but needless to say it would be a bit more daunting.
- Cannot do anything classified as “work” on the Sabbath. Even riding in a car. Which means, unless you really enjoy hiking, it’s a good chance you’ll need to live within walking distance to your place of worship. Which also means you’ll pay a higher price for your house since you and everyone else in your religious community needs to live close by!
I’m sure that’s just the tip of the iceberg, but that alone is enough to wow me. Not only are the differences between their faiths and mine (Christian) so large when it comes to the role of money, BUT they are practicing it here in the U.S. where it’s even MORE challenging than it would be in a place that shares their religion on a much larger scale! I’m seriously impressed.
I would love to hear if any of you practice these religions – or any others – and how it affects your personal finances. Is this article right on? Is there anything missing that plays a major role in your finances? I find it interesting that no matter where our faith lies, we are all challenged to manage our money to the best of our abilities :)
PS: Some of my favorite tools:
|Personal Capital (FREE) -- If you’re looking for a robust financial tracker, Personal Capital is the way to go! They’re like Mint, but on steroids and have much better tools for investment and net worth tracking. // Full review|
|Digit (FREE) -- A super easy (and automated) way to save. Every day Digit analyzes your income and expenses and will push money aside for you any time it sees extra sitting there. I've saved over $4,000 myself using them so far! // Full review|
|Acorns -- Having trouble finding money to invest? Check out Acorns – they round up all your transactions to the nearest $1.00 and drops the difference into an investment portfolio for you. Easy way to start investing! // Full review|