Incorporating Charity into Your Budget
While budgets are important for keeping on top of where our money is going, it’s equally important to give back to those who need it most. Not only does giving back to the community positively impact society, but it also brings fulfilment and purpose to the life of the giver. To that end, detailed below is how to go about integrating charitable donations into your budget, whether you give to a Palestine emergency appeal or sponsor a child.
Understand Your Financial Situation
Before you can commit to charitable giving, you need to understand your financial health. This involves renewing your income, expenses, debts, and savings. You can achieve this by outlining all sources of income and expenditures. Budgeting apps and simple spreadsheets are some of the simplest things to keep on top of your budget. Once you understand where you’re at, it becomes much easier to determine how much you can afford to give to charity.
Set Clear Goals
It’s important to understand exactly what it is that you want to come from your charitable giving. You need to be passionate about the cause you’re looking to help, and popular options include education, health, and environmental sustainability. If you establish clear goals, it’ll help you to remain focused and motivated. This also makes it easier to choose the right organizations for you and measure the impact of your contributions.
Decide on the Amount
It can be tricky to decide how much you’d like to give. The most common guideline is allocating a certain percentage of your income to charity. Depending on earnings, many people choose to give anywhere from one to ten percent of their yearly income. When you’re new to charitable giving, it’s a good idea to start small and gradually increase the amount you’re giving as you become more comfortable with your budget.
Choose the Right Charities
Not all charitable organizations are the same, meaning you need to do your research and choose charities that align with your goals and values. Charity Navigator, GuideStar, and Better Business Burueau’s Wise Giving Alliance are just some of the websites that provide ratings and reviews of different nonprofits, and this can help you make informed decisions.
Incorporate Giving into Your Monthly Budget
After deciding how much you’d like to give and selecting your charity, you can then go on to incorporate charitable donations into your monthly budget. You should treat these contributions like any other recurring expense. This way, you’ll be able to make giving a regular habit rather than an afterthought.
Use Employer Matching Programs
There are many employers that offer matching gift programs in which they match the contributions made by their employees. This is a great way to maximize your donations without additional costs. You can check with your HR department to find out whether your employer offers a program like this.
Automate Your Donations
It might be an idea to set up automatic donations through your bank or directly on the charity’s website. By automating your contributions, you’re able to simplify the process and ensure consistent giving. It also helps to maintain discipline and avoid the temptation to not donate in certain months.
Track and Review Your Contributions
Not only does keeping track of your donations allow you to manage your budget, but it also lends a helping hand during tax season. This is because a number of charitable contributions are tax-deductible, and with a detailed record, you’ll be able to make the tax filing process a lot smoother. You should also take the time to periodically review your contributions so you can rest assured that they’re still in line with your goals and financial situation.
