Giving: How to Budget for It
To give and then not feel that one has given is the best of all ways of giving.
~ Max Beerbohm
Giving is something that most of us like to do. We love to buy great gifts for our loved ones, and we want to support charitable institutions that are close to our hearts. But sometimes when we look at our budget, there just doesn’t seem to be anything left over, or we forget to include giving altogether.
When an occasion to give comes up, it can be a real budget-buster, and may even force us to take on unplanned debt. We’ve been talking about budgeting a lot lately, and the crisis in Haiti has put giving on our minds, so I thought I might go over some ways to incorporate giving – without breaking the budget.
Pay It Forward First
Paying it forward means that if I owe you a favour or debt of gratitude, you might ask me to give it to someone else instead of you. “Pay it forward first” is a twist on this expression combined with the old “pay yourself first” personal finance cliché. Basically, it means that when you budget, you could decide to take a certain amount or percentage of your net income and devote it to giving. You can budget how much you’ll spend on gifts for Christmas, birthdays, or other occasions and how much you will budget for charitable giving.
Here are a few tips on including various types of giving in your budget:
Focus Your Cash: Choose a few reputable charitable organizations on which to focus your donation dollars. Spreading your cash too thin probably won’t help as much as a few targeted donations. When a representative of another (albeit worthy) cause knocks on your door, phones you, or sends you mail, simply explain that you have a few charities that you support and you are unfortunately unable to contribute to theirs. I do this regularly, but I will also drop the occasional toonie into a container for causes like a local children’s sports team or some other worthy cause. The occasional loonie or toonie isn’t going to break anyone’s budget, and it feels good.
Christmas, Birthdays, Weddings, etc.
Create a Gift Budget: I pretty much need to buy the same amount in gifts each year for the same people, so it’s kind of silly that it took me until last year to really sit down and write out a little “gift budget”. I keep it in the “Notes” section of my computer, so I don’t have to try to remember how much I’m supposed to spend on my kids, parents, nieces, nephews, etc. for various occasions. If I know I have an occasion coming up that is not annual, like a wedding or baby shower, I include an amount for that event.
I even have a separate sub-budget for Christmas. It has only taken me 20 years to realize that every year, some little unexpected expense comes up, like a new set of lights is needed, or extra cash for “libations” that we normally wouldn’t keep on hand. This goes into a “Christmas: Misc.” category in Quicken as well. It makes the holiday season much more enjoyable when you can go out shopping and know exactly what you can (and can’t) afford.
Add a Cushion
OK, here I go with the contingency plan thing again. This is something that I’m adding just this year in light of recent events. When a catastrophic event occurs somewhere in the world, most of us want to be able to help in some way. The reality is that the fastest, easiest, and most realistic way for most of us to do that is simply to donate money. It’s much better if you can do it quickly, without worrying about whether or not you can afford it.
When I made our donation to Doctors Without Borders last week, that money was not in the budget. It didn’t matter because we wanted to help right away, and we’re willing to give up something else later in order to do that. Still, this isn’t the first time something like this has happened. We have had 9-11, Hurricane Katrina, the Indonesian Tsunami, and many more donation-worthy events over the past decade, and it seems like they just keep coming. From now on, I’m going to include a little extra in our giving budget each year.
Do you budget for giving? Do you have any tips to share?