Giving back to the community and supporting important causes is a rewarding experience that can help initiate positive change, and give individuals a sense of purpose and accomplishment. It’s a win-win for everyone.
In fact, studies even show that people who volunteer their time or spend money on others are happier and healthier than those who do not. But that’s not all. Charitable giving can also play an important role in good financial planning by providing tax benefits for both individuals and companies. In many cases, charitable donations equal a tax deduction, which could reduce a person’s annual tax bill and save them some money!
With all the good that comes from charitable giving, consistently donating can be a financial challenge. Between juggling bills and unexpected expenses, it can be hard to find the money to help others. So, doing good requires good planning and budgeting.
Here’s how you can save to give and support a cause (or causes) you believe in!
Helpful Methods to Save for Giving
Make Donations a Fixed Part of Your Budget
If you’re serious about consistent charitable giving, consider making it part of your monthly budget. Regularly budgeting and setting aside funds for donations is one of the easiest ways to follow through on your good intentions.
One way you can achieve this is by using a modified 50/30/20 rule. This budgeting method splits your money into three categories: 50% set aside for “needs” like food, housing, transportation, and electricity; 30% for “wants” like entertainment, vacations, nights out, clothes, and gifts; and 20% to put towards your long-term savings or to pay off loans.
If charitable giving is personally important to you and you want to give back, you could reduce the amount you put toward each category. For example, you might lower your “wants,” which are limited to 30% (based on the 50/30/20 rule) by 1%, 5%, or any amount you feel comfortable with, and designate that amount to charity. So, if you make $2,000 a month and typically set aside $600 for your “wants” (30%), you could lower it to 25%, which would have you saving $100 for charitable giving each month. This would result in you donating $1,200 a year!
Store Unused Budget Amounts
Even if you’re unable to commit a fixed amount each month, there are plenty of alternative strategies you can use to continue supporting the charitable organizations that you’re passionate about.
You can add to the amount you’re able to give by donating any unused money you’ve already budgeted at the end of each month. For example, if you’ve budgeted $150 for groceries for the month, but find yourself only spending $140, rather than spending that $10 on yourself, try putting all or half that amount towards your charitable giving fund.
This can not only generate that sense of fulfillment, but it can also teach you to be a wiser spender down the line. You may even start actively looking for ways to save a little here and there on your budget to put towards a cause you support.
Get Creative with Charitable Giving
Along the same line of thinking as saving unused budget amounts, you can also have some fun by coming up with creative ways to budget for charitable giving.
One way you can save to give is by rounding up your purchases to the nearest dollar, and depositing that spare change to your favorite charity at the end of every month. Many budgeting apps can help you by calculating this amount or transferring the money to a separate account for you.
Savings from Shopping Sales
Create a system where if you buy something that’s on sale, you make up whatever the difference is by donating it. For instance, if you buy a $50 shirt on sale for $35, you put the $15 savings towards your charitable giving budget.
$1 from Coffee
Every time you buy a coffee, you could allocate a dollar to your favorite charity. Though it may not feel like a lot at first, if you tend to buy yourself a cup of coffee every morning, that amount can really add up!
As you can see, there are a number of creative ways to save to give—the key is to make it consistent and simple.
Many companies offer a gift-matching program that donates the same amount that their employees do to eligible organizations. For example, if you donate $100 to an eligible charity, your company may match it by 50% or even 100%. If you work for an employer that matches charitable gifts, your donations can make double the impact. This provides further incentive to regularly save to give.
When thinking about giving back, you may ask yourself, “How much should I donate to charity?” Ultimately, the charity you support and the amount you choose to spend on charitable giving are your own choices to make. It can vary based on the income you have available to you and the expenses you need to tend to. However, with smart planning, good budgeting, and some creative thinking, you’ll be able to maximize your giving. In the end, it’s not the amount you give but the ability to consistently follow through on charitable giving that matters most.