Planning Your Giving
By Daniel Rodriguez | Dr. Budgets
For many of us giving, whether to charity or to our friends and family, is very important. Even though our heart is in the right place, it can be easy to get carried away (how did you do on Black Friday this year?). This is why planning your giving is so important. In my spending plan and the ones I create for my clients, I have line items for gifts and charitable contributions to create room for generosity.
It is easy to get swept up in the excitement of the sales around this time of the year, which can disrupt even the best of intentions when it comes to sticking to a “giving” budget. Add in birthdays, weddings, baby showers and other special occasions that come up during the year, and you can see how quickly the gift-spending adds up. It is important to plan for these expenses at the beginning of the year so you can allocate enough money to your gifts budget. I often see budget amnesia when it comes to this area of people’s spending. Birthdays and the holidays happen every year, and yet many people fail to plan for these inevitable expenses. This lack of planning can then lead to spending your entire holiday bonus, or worse yet, getting into (or deeper into) credit card debt. So my tip is to plan for this expense as you would for any other expense.
Planning your charitable contributions is also very important. It feels as if charities are asking us for money left and right this time of the year. If you don’t deeply think about which charities matter to you and why, then it can be easy to give aimlessly. My wife and I have a few charities that we give to consistently every month. We have also made room in our spending plan to give when our friends or family members raise money for a cause they believe in. Creating flexibility in our spending plan allows us to give without having to take from other areas in our budget or sabotaging our goals.
When you create your spending plan for next year, think about planning your giving. Think about the gifting and charitable contributions you are planning to do during the year, then put a realistic figure in those categories. This will allow you to be generous while simultaneously achieving your other spending and savings goals. As for the remainder of the current year, do the best you can by determining how much you will spend on gifts during the holidays, then stick to it! If you have any questions contact me or leave a comment in the comments section below.