(This post is of my own opinion, belief or thought and does not necessarily reflect that of FaithLife Financial, its’ partners, or affiliates.)
That question can sound almost like an oxymoron. After all, isn’t my financial plan about accumulating money effectively for the needs of my family and myself, as well as providing protection against the unforeseen?
Yes, but for many Canadians, there’s another element that’s often overlooked. As Canadians, we are known for our generosity, as is usually demonstrated when catastrophes like the Fort McMurray fire arise. For those of us who attend a place of worship, regular giving is a common element of that attendance.
We love to help by giving our time, talent and resources to those in need, or in a worse position than ourselves. But can we afford to do so?
Too often, when our hearts persuade us to give financially, many charity websites make it easy – just use our credit card. But what’s the impact of that? Can we really afford it? Do we later regret our generosity?
Another situation arises when we really want to give to people in need, but we are forced to acknowledge that we simply cannot afford it. We then tend to berate ourselves for not being able to help.
Why not make our giving one of our financial goals? There are a number of advantages:
- In doing so, we tend to think more of others than ourselves, maintaining a sense of humility;
- We are less likely to become inwardly focused, something that can lead to greed;
- We acknowledge that what we have is a blessing, and we are called not to hoard what we’ve been given, but to be stewards of it; and
- We can set an example for others in our circle of friends and communities.
So how do we do this? Here are four ideas.
1. Make giving a priority
Most financial advisors will encourage their clients to save first, then spend what’s left. Why not let our giving follow the same sound advice? What if we gave first, then saved, then spent what was left? We can set up automated debits to coincide with payday, so the money is given before we can miss it. If our giving is to a place of worship, some may feel uncomfortable using automate debits. In such cases, set the money aside each payday and contribute it when you next attend. It can have a beneficial impact on our finances when we think of others first and develop a spirit of generosity.
2. Set a target
Let’s set a target percentage of our household income that we would like to give away. The percentage or dollar amount should be something that makes sense to us, based on our beliefs and personal feelings. Once we establish the goal, we can approach it just like every other financial goal. What percentage or amount are we giving today? How can we move closer to our goal this year? Here’s an additional thought: why don’t we also set a percentage or amount of our time that we want to contribute, not just our money?
3. Start a spontaneous giving account
In addition to our normal monthly giving, consider setting up a savings account or investment with money we eventually intend to give away. Wealthy people sometimes set up foundations, but we can do the same thing on a smaller scale. If we deposit $25 or $50 or $100 each month into a savings account or investment, we can accumulate dollars that can be used when special events arise, such as a national or international disaster, a community project, a special program at our favourite charity, a mission trip, or a capital program at our place of worship. This monthly amount can count toward our percentage of giving goal. When it comes to buying larger ticket things for ourselves, we all need to get better at saving first, then spending, rather than spending now and financing the cost. The same tactic can apply to your giving account.
4. Consider planned giving strategies
If you have a strong monthly cash flow, talk to a financial advisor about charitable annuities and charitable life insurance. These are other ways to give that can easily be accommodated in our financial plan.
If there is not a generosity element in your financial plan today, talk to your advisor about adding this component.