Your goals and values are an important foundation for a working budget. You consider what you need for an emergency fund, what you want to save for and how much to put away for retirement. But it’s also important to look at what’s important to you. In many cases, that can come in the form of charitable giving. You might want to give to your church, your alma mater or a cause that you have a passion for. Whatever it is, there are ways to set aside your resources to give back.
Charitable Giving in Your Everyday Life
Charitable giving doesn’t always mean spending money. If you’re not sure how to work it in with your budget, start with your time. How can you get more invested? Volunteer work, no matter how insignificant it might seem, can make a major impact. It’s economical, too. Let’s say you’re interested in helping a cause financially. If you start out by volunteering or attending events, you get a better idea of where your money should go to best help that cause. Should you purchase supplies? Send a check? Getting to know a group better will help you make more informed decisions.
You can also donate clothes and food if you’re not in a position to send money. Small acts add up, and there is always someone who could benefit from your time, talents or items.
Charitable Giving and Your Budget
You need to take care of yourself before you take care of others. Being overly generous at the cost of yourself and your family is never a good thing, so it’s important to take a look at your budget when you’re planning to give to charity.
Obviously, the best way to give financially is to do so proportionally to your debt, income and money goals. If money is tight but you want to donate a little extra to your church during the holidays, you may only be able to set aside $10-$20. You might be able to do that each month if you have extra funds the following year. It’s really about looking at what’s left over after your monetary needs have been what, and seeing what’s reasonable for you and your family.
You can also find that money by taking a critical look at where your money is going. Maybe you forgo new clothes or movie tickets this month and save that money separately for charity. Plan ahead for it like you do with other budget line items and you’ll be much likelier to have that money available later.
Getting a jump on your holiday shopping? Another great way to allocate funds without killing your budget is to use the money you have set aside for gifts. There are tons of stores, sites and products out there that donate to charity for every purchase made. Shop with your favorite causes in mind for everyone on your list, and it’s double-duty for your gift and charity funds.
Charitable Giving and Estate Planning
If there is a cause, group or school that is especially important to you, including it in your will is a meaningful way to leave a legacy. As with your budget, it’s important to prioritize and make sure other needs are met before you consider how much to give away to charity. One option is a charitable trust, which includes its own set of benefits for the recipient as well as you and your family. For example, you could set up a charitable remainder trust to provide you with income during your retired years. After you’re gone, the remainder of that money could go to a charity. You may even have the means to set up a foundation or scholarship in your name.
If charitable giving is important to you, then it’s worth the effort to budget time or money to show that passion and support.
About Your Richest Life
At Your Richest Life, Katie Brewer, CFP®, believes you too should have access to financial resources and coaching. For more information on the services offered, contact Katie today.