Let’s talk about religion and money.
Religion can be defined as “a cause, principle, or system of beliefs held to with ardor and faith.”1 Those that practice a religion likely know that it can sometimes feel like an anchor in a storm and can sometimes feel like a problem in and of itself.2,3 The dichotomy between the positive and negative aspects of religion is also true in regard to finance. Previous research in this specific aspect of religion has shown both good4 and bad5 outcomes. This is why Dr. Ashley LeBaron-Black and her colleagues decided to study the ways in which religion can both help and hinder finances.
In their study, the researchers reached out to religious leaders across Ireland and the United Kingdom. 172 participants were interviewed for 30 minutes to 2 hours. Analysis of these interviews revealed four ways in which religion made finances more difficult and five ways in which religion made finances less difficult.
How Religion Made Finances More Difficult
The first way in which finances were made more difficult was that religion increased financial obligations. For example, regular charitable donations (such as tithing) and pursuit of religious experiences (such foreign proselyting missions) increased the participant’s expenses. Second was that religion required time and sacrifice. Attending religious meetings, volunteering at church, and religious practices (such as praying) all increased participant’s time spent in religious activities.
Third was that religious values clashed with work. Some participants avoided certain career fields, worked fewer hours, and settled on achieving less in their career in order to maintain their religious principles and practices. Fourth was that religious values clashed with materialism and that this sometimes made connecting with others more difficult. For example, many participants felt that their religious beliefs guided them to spend money on clothing, technology, experiences, and other material items differently than non-religious persons in their life. Not having similar experiences related to materialism made connecting with these non-religious persons more difficult, given that they did not share similar interest in common material goods.
How Religion Made Finances Less Difficult
The first way in which finances were made less difficult was that religion reduced materialism. With their attention set on their religion, families, and friends, many participants felt less need to have the newest, nicest, or most possessions. Second, religion brought monetary blessings, such as financial assistance from the religious community in times of crisis. Third, religious giving brought satisfaction. This involved giving goods, services, and charitable donations to those in need.
Fourth, religion improved perspectives on work. This occurred principally by shifting participants’ view from work being a chore to work being a means of giving back to others, providing for family, and doing a job well done. Fifth, religion fostered a positive outlook on financial struggles, such as viewing the struggle as a means where God can intervene or as a time for personal growth.
Despite the complex interplay between religion and finances, we can use the information gained in this study to maximize the positive outcomes of religion and minimize the negative. The following are ways to decrease financial stress while remaining faithful in your religion.
- Accept that religion can influence your financial well-being. The study made clear that religion can be both a help and a hinderance for your financial well-being, but for some, religion is held in such high regard that they do not accept their religious practices as making their finances more difficult. This view can be monetarily harmful though, because knowing and accepting that your religion may be influencing your finances for better or for worse can help you understand when and why your finances are changing. For example, counting regular charitable donations to a church as an expense allows you to factor those donations into your weekly budget. Examining your budget can then help you to determine if the amount you give is sustainable when coupled with your other expenses. When your expenses outweigh your income, accepting charitable donations as part of the cause for your increased financial stress can lead you to accept, rather than avoid, solutions that will help you balance your budget (the root problem in this example).
- Be aware of how religion is influencing your financial well-being. After accepting that religion can help and hinder your finances, the next step is to determine where your finances lie on that spectrum. To do this, you can set regular times, such as during a weekly budgeting session, to determine if there is financial stress in your life and how much of it may be caused by religion. For example, you could ask yourself what percentage of weekly time, money, and effort is going to religious, work-related, and personal life. By setting up a comparison between these areas of life, you will likely be better able to see how religion is impacting your overall financial wellbeing. If you see that religion has gone from helpful to overwhelming, you can make changes to course-correct your financial practices and improve your financial well-being.
- Seek help from a religious leader AND a financial advisor when religion is leading to overwhelming financial stress. Although religious methods may seem like the only recourse for religious problems, seeking help from trained financial professionals can assist you in overcoming financial difficulties from religion. As well, financial advisors can guide you on how your financial practices outside of religion can support your financial practices inside religion. For example, someone experiencing financial stress due to regular charitable donations to their church can be guided by a financial counselor on how to improve their net income without minimizing the size of their religious donation (such as deducting charitable donations from their taxes). This may ease the financial stress from charitable donations by ensuring that the individual’s religious and secular financial needs are both being met. Financial counseling from a group who supports religious activity can be found here, if you’re interested.
In summary, religion can be both a help and a hindrance for those who choose to practice a faith. Dr. Ashley LeBaron-Black and her colleagues found specific ways in which religion alleviates financial stress and worsens financial stress. To increase the positive financial effects of religion and minimize the negative effects, you can accept and be aware of how religion influences your finances and seek help from a religious leader and financial advisor during difficult financial times.
1Religion. (2022). In The Merriam-Webster.com Dictionary. https://www.merriam-webster.com/dictionary/religion
2Dew, J., Britt, S., & Huston, S. (2012). Examining the relationship between financial issues and divorce. Family Relations, 61, 615–628. http://dx.doi.org/10.1111/j.1741-3729.2012.00715.x
3Dew, J. P., LeBaron, A. B., & Allsop, D. B. (2018). Can stress build relationships? Predictors of increased marital commitment resulting from the 2007–2009 recession. Journal of Family and Economic Issues, 39, 405–421. http://dx.doi.org/10.1007/s10834-018-9566-7
4Bradshaw, M., & Ellison, C. G. (2010). Financial hardship and psychological distress: Exploring the buffering effects of religion. Social Science & Medicine, 71, 196–204. http://dx.doi.org/10.1016/j.socscimed.2010.03.015
5Gutierrez, I. A., Park, C. L., & Wright, B. E. (2017). When the divine defaults: Religious struggle mediates the impact of financial stressors on psychological distress. Psychology of Religion and Spirituality, 9, 387–398. http://dx.doi.org/10.1037/rel0000119