Giving is good for you—but it needs a budget

Paying it forward

Research suggests giving back is healthy and can even relieve stress and anxiety. But how can you budget for it, and how do you decide where to give?

Studies show that giving is beneficial to your mental health.Disclosure 1 It can improve sleep, relieve depression and anxiety, and make you happier. Giving gives us a sense of purpose. It directs our attention beyond our immediate worries and helps us focus on others.


had given during the spring of 2020.Disclosure

Disclosure Q2 2020 Truist National Financial Confidence Poll.

In the wake of the COVID-19 pandemic and the fight for social justice, you may be feeling more compelled to give. A recent poll of Americans showed that 42% had given during the spring of 2020.Disclosure 2 But how can you give, save, and live within your budget?

Here are some tips on how to do it. 

Align your giving with your values

There is a sea of worthy recipients out there, so finding the best place to give can take some work. To get started, make a list of values, causes, or societal problems that are most meaningful to you. Which issues spark a fire in you? What types of community impact bring you joy? 

Local or global giving

With a narrowed-down list of prominent issues or causes, consider the geography of where you could contribute the most help. Is it important for you to give locally, in your immediate community? Or do your intentions take you to other parts of the world? Or both?

Giving to individuals and institutions

Traditionally speaking, donors mostly give to nonprofit organizations that are certified by the IRS. This is because donations to these organizations are tax-deductible, although primarily for big donors. More recently, people are giving to individuals who are doing work for causes they value. Apps like Venmo, Cash App, Patreon, and PayPal are great ways to support your favorite artists, activists, or workers for your favorite cause. It’s not tax-deductible, but it’s arguably just as important as giving to an institution.

Giving on a budget: Think in percentages

As with your other spending, giving needs a plan. It’s usually best to think of giving a percentage of your budget, rather than an amount. If you receive a raise or bonus at work, your giving can reflect that. Or if you start making less money, your giving can respond accordingly.

Some financial advisors suggest budgeting with the 50/30/20 rule. That is, 50% of your budget is for housing, utilities, and food. 30% is for things you want, like vacations, gifts, or dining out. 20% is for saving or paying off debt. In this budget framework, giving could come from that 30% category.

While donating 10% of your income is a great goal, it’s not great to sacrifice savings or debt payments. Instead, think of what you could sacrifice. Most of us can afford to do without something. Go through your expenses, find what that is, and instead allocate that expense to your favorite cause.

No matter how much you decide to give, there are a few ways to ensure you do give.

Automatic giving

Many organizations can set you up with recurring donations. Instead of giving one lump sum, they can spread your donation throughout the entire year, with 12 monthly payments. 

Giving, compounded

Some employers have matching giving programs. You make a donation; they match some or all of your gift amount. It’s a great way to get more out of your giving. 

Cashless giving

There are many ways to give without spending any money at all. Most organizations will ask for your money, or in-kind donations—non-cash contributions such as goods, services, time, or expertise. So reach out to a local institution and ask for ways to volunteer your time or talent.

In the end, the benefits of giving aren’t dependent on the amount you give, but on your intention. Start small. Be thoughtful. And make a plan to ensure you’re giving in a way that’s smart and fulfilling. It may just make you happier, too.

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