Hi Friends, today I’m bringing you a great guest post from Kayla over at Shoeaholic No More. Kayla is a mid-20s single girl living in the Midwest, USA. She is focused on paying off her consumer and student loans, while simplifying her life and closet. You can join her on her journey at Shoeaholicnomore.
When I first started contemplating getting out of debt, I borrowed Dave Ramsey’s Financial Peace University from a friend of mine. One of the first things he said that really struck me was that you should NOT stop giving to charity while paying off debt.
I thought about this long and hard and in the end, I decided I was going to continue giving to charity while pursuing my quest to becoming debt free. Since I started my journey to becoming debt free, I’ve been giving to several fundraisers in my community for people who have been diagnosed with very serious illnesses, some are even terminal. I decided that if I stopped giving while I was trying to get out of debt, it’d be just that much harder to get started again when my debts were gone. Plus, giving makes me feel good!
Though I don’t give 10% of my post-tax income as Dave Ramsey suggests, I do allocate a small amount of cash each month to give away. Since I only give $10/month sometimes I wonder if this small amount is even worth it. Then I figured out that if everyone in my community gave $10/month to various causes, we’d have over $70,000 worth of donations made each month, and this is a conservative estimate! I finally decided that instead of being disappointed that I can’t give more, I should be excited that I give what I can.
Another key to my giving strategy is that I built it into my budget rather than just giving whatever I have “leftover” at the end of the month. Much like savings, I made putting money aside for charity a separate line item in my budget. This strategy really helps keep me accountable so I don’t spend the money on something trivial, like eating out or a new piece of clothing that I don’t truly need.
What about tax benefits? As I said before, I’ve been giving to fundraisers for individuals in my community, not qualified non-profit organizations with a tax ID number. To me, it’s worth it to give to these causes even though I’m not getting a “tax benefit” because I get to see the impact of my donation and the donations of other community members every day. Our donations are being used to pay expensive medical bills, hotel stays for the patients and/or their families, and in some cases are being used to help feed, clothe, and provide shelter since wages have been lost due to illness.
I’m sure if you try hard enough, you can find a few dollars in your budget to donate. Pick a cause that’s near and dear to your heart, one that’s important enough for you to make a few small sacrifices in order to save some money that can be used for donating instead of self-indulgences. Don’t get me wrong, I still splurge on eating out or a coffee every now and then, but I decided finding a little room in my budget for giving is important too.
I may not be able to give 10% of my income but I know I’m making a difference and once I’m able I want to give freely and willingly.
Do you think giving to charity is justifiable if you’re still in debt?
Note from KK: Giving is definitely a topic near and dear to my heart. I not only think charitable giving is justifiable, I also think it’s incredibly important. Although I couldn’t give a lot of money to charity when I was in debt, I could (and did) donate my time to a bunch of different charities and causes. I also donated clothing to a shelter for homeless women and used coupons to buy food for our local food pantry. If everyone gave a little the world would be a much better place!
Image: Steven DePolo