Do you regularly give to charities or tithe at your place of worship? Are you on firm financial footing or up to your eyeballs in debt? How to approach giving as a part of your budget is complex. Some financial experts advise you should make giving a priority in your budget, no matter your current financial circumstances. I agree with the idea, but only in part.
Philosophically, I am 100 percent on board with the idea that giving back is important. The practice of gratitude and recognizing the blessings we have, no matter how meager those blessings might be, is of paramount importance to both a fulfilling life as well as being financially successful. But don’t forget there are many ways to give back, and not all require monetary donations.
Giving When You are Deeply in Debt
Early in my career, I had two clients who came in to discuss their financial planning, and both were in similar situations. Each client was deeply in consumer debt, and both practiced spending that was out of control. In reviewing their budgets, I realized both were also tithing a fairly significant amount of their income each month.
Having these two clients at the same time made me think about the conflict giving can create when you’re trying to adhere to a budget. First, as a disclaimer, I consider myself to be a spiritual, but not religious, person. However, I do have respect for others’ beliefs and priorities. My family and I also are big fans of charitable giving. In that vein, I questioned my clients a bit further and found that both believed tithing was something they should do.
As gently as I could, I pointed out I didn’t think that God wanted them to be in debt in order to tithe. I suggested that they cut back on their tithing level for a while and instead give more of their time. After getting themselves back on firm financial footing, they could resume a higher level of financial tithing. The relief on their faces was clear.
My advice might offend some people, but I would still give it today. When you are in deep financial distress, you must cut back on your expenses to dig your way out of the hole. If cutting back on financial giving is abhorrent to you, you must make deeper cuts elsewhere to accommodate that priority.
It all comes down to priorities.
Giving When You are Financially Stable
On the other hand, if you are managing your financial affairs well on a monthly basis, I encourage and applaud the practice of giving back through charitable donations or tithing. In the cases of both of those clients, they were going further and further into debt because their expenses outpaced their income.
If you’re on top of paying your monthly expenses and you are making progress in paying off your debt, then by all means include some sort of charitable giving in your budget.
In our household budgeting, we treat giving like we do savings goals. Each month, I carve out the amount needed to fund our savings target, as well as the amount needed to fund our annual giving goal.
The Bottom Line
The bottom line is to be sensible with your giving, considering your current financial situation. We all have periods in our lives when money is tight, and cuts must be made. During those crunch times, consider giving more of your time in lieu of money, until you are back on your financial feet again.
What are your thoughts about giving as part of your monthly budget? Do you cut back when money is tight,