- Date : 30/09/2020
- Read: 4 mins
Sound financial planning can help you contribute towards good causes consistently – without burning a hole in your pocket.
It’s been rightly said that true happiness lies in giving back to society. But it’s not always easy to budget for charity, especially when you are living from pay cheque to pay cheque. Amidst all the financial obligations – such as rent, groceries, medical expenses, saving, and investing – charity often takes a back seat.
However, there are some easy ways to factor charity into your budget. Here’s how:
1. Decide on a cause that’s important to you
Identify a cause that you feel passionately about – it could be education, animal welfare, healthcare, or anything else you believe in. Do some research and find an organisation that aligns with your values. Alternatively, pick an initiative and contribute to it directly at an individual level. For instance, you could consider donating groceries or paying for someone’s school textbooks if they can’t afford them. That way, you will not only be certain that your money is not being misused, but also develop a closer association with something that matters to you. If you’re donating to causes that excite you, you’re more likely to prioritise it in your budget and stay committed to it for the long haul.
2. Dedicate a part of your income to donations
After ensuring that you have covered your fixed expenses and savings, and made room for discretionary spending, determine how much money can go towards charity. Try to find a balance you’re comfortable with and leave some wiggle room to make your donations. An easy approach is to earmark a certain percentage of your take-home salary as ‘donation money’. Put this money in a separate savings account so you’re not tempted to spend it.
3. Giving something is better than not giving at all
You don’t need to stretch yourself thin if finances are tight. Every little bit makes a difference. For instance, if you go shopping when a sale is on and happen to get a 30 percent discount, it’s an unexpected windfall that you can donate without feeling the pinch. At times when money is hard to come by (say, when you have just started out on your professional journey), and you are still inclined to give, choose something to sacrifice. This might require some negotiation with your spending habits. Think of something that is easy to forgo – maybe skipping a night out with friends – and giving that cash to charity instead.
4. Set up automated donations from your bank account
A smart move to make sure you are following through on your donation commitment is to sign up for recurring automated donations. Not only will this take away the onus of remembering to contribute a certain amount at intervals, it also ensures your donations are consistent and timely. When you don’t need to ‘actively’ set aside a sum to donate, chances are you won’t feel the pain of parting with your money.
5. Time your donations strategically
Whether you choose to donate monthly, quarterly, or annually, time your contributions in such a way that they don’t feel like a drain on your income. To make giving easier, donate at the beginning of the month, quarter, or year (depending on how often you decide to give) or as soon as you get paid. If you donate right away, you won’t get the chance to spend it elsewhere.
6. Contribute non-monetarily
Don’t have enough money to spare but still want to give? There’s plenty you can do without spending a lot. Give away items like lightly used clothes, food, or medical supplies to those in need. Help raise money for organisations by spreading awareness about their cause and get more people involved. You may be able to raise more money for charities by pooling in with others. Check with your employers if there’s a company program that can match your donations with an equal amount.
Claim tax deduction
Many donations to charity offer tax breaks by reducing your taxable income. Check if your donation is eligible for such a deduction.
Giving back to society can be extremely rewarding. Even if you don’t think you have the financial resources, there are ways in which you can contribute and make a difference. Look at these 8 Smart ways to put your tax refund to good use.