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BUDGETS CAN BE a contentious topic. Some people swear by them. Others argue they’re unnecessary if you easily spend less than you make. No matter which side you take in this debate, I’d advocate budgeting for one item: kindness.
I’ve always enjoyed reading news stories about strangers who left unusually large tips for their waiter. After reading such stories, I’d daydream about where I’d leave large tips if I was that rich. One day, as I was reading one of these feel-good stories, I realized I had $100 in my wallet that I’d received as a birthday gift. At that moment, I knew exactly what I was going to do with the money.
The next time I went out to eat, I paid my modest bill and left a $100 tip. As I was getting ready to leave, the waitress stopped me and asked if I’d made a mistake. I smiled at her and said, “Nope. That’s for you.” Her gratitude and my generosity-fueled dopamine rush confirmed that I’d invested my birthday money wisely.
At that moment, I resolved to leave a $100 tip for a stranger every year on my birthday.
I kept up that annual tradition for several years until I had an epiphany. If I enjoy leaving a $100 tip so much, why am I only doing it once a year? After sitting down with my wife to review our monthly budget, we determined that we could set aside $100 every month to spend on a random act of kindness.
How we’ve spent that $100 each month varies. Sometimes, we tip our waiter or hairdresser. Other times, we contribute to a GoFundMe or CaringBridge fundraiser. On occasion, we use the money to buy a gift for a friend out of the blue.
We’ve set two rules for ourselves. First, the $100 can’t be used to cover any of our typical expenses. That means we can’t use it to pay for a birthday gift that we already planned on purchasing and it can’t go toward the normal 20% tip at a restaurant. Second, any unused portion of the $100 rolls over to the next month.
We’ve been setting aside $100 each month for random acts of kindness for several years now, and we’ve noticed three benefits. First, there’s the visceral joy that comes from surprising someone with an unexpected act of generosity. Don’t just take my word for it. A quick Google search turns up a variety of sources supporting this.
Second, giving away money regularly has increased our financial contentment. To give, we have to consciously decide what amount of money we currently have that’s more than we need. The act of deciding has profoundly changed how we view our finances.
Third, knowing that we have $100 every month to give away has helped us develop greater empathy for and interest in those around us. Is someone having a hard day? Are folks going above and beyond what their role requires? Every time I’m out in public, I’m now more interested in getting to know those around me, because an opportunity to show kindness can present itself at any moment.
If you’re interested in trying this out for yourself, here are some tips. First and most important: budget for kindness. I’ve found that if you allocate the sum ahead of time, it’s much easier to part with the money.
Next, pick a dollar amount that works for you. It doesn’t have to be $100. It could be $50 or even $20. Finally, pick a frequency that you think you can sustain. Annually, quarterly or monthly are good places to start.
In my experience, random acts of kindness that are $50-plus seem to have the biggest impact on the recipient. I’d recommend decreasing the frequency of your gifts so you can increase their size, until you feel comfortable giving away at least $50 at a time.
Keep in mind that this type of financial generosity doesn’t come with any tax benefits. If you give away significant sums each year, it makes sense to direct most of your generosity toward tax-exempt organizations, such as churches and other nonprofits. But I can confidently say that the return on investment I receive from giving people unexpected $100 gifts far exceeds the tax advantages I’ve given up.
Austin Dorenkamp wears many hats including husband, father, software engineer, program manager, landlord and therapy dog handler. He’s even been called an ice cream sommelier. If he’s not giving those around him unsolicited financial advice, Austin’s likely cracking a joke or driving in a time-efficient manner. Check out his previous articles.
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It’s great to hear about generosity like this. I wondered have you considered giving to charities that do a lot for people in poor countries as well, where the money goes a lot further? See e.g. https://www.givewell.org/charities/top-charities
A great idea to make it part of the monthly plan (if within your means). Pitching to my partner and implementing.
Austin you are sooo cool! Spread some smiles over the miles!
My daughter in law told me of her early job at a fast food place stationed at the drive through. People would give $20 in the till to pay a 10.75 bill and say, “put the overage to the next in line, if you will.”
That would be passed on for several cars! Hek Yeah!
What a great idea, Austin! You’ve made lots of readers sit up and take notice today. Me included. I’ve got some $100s in my desk that were a gift from a relative. You’ve inspired me to talk to my wife about dispensing them.
I know exactly what you mean about that dopamine rush. No matter what mood I’m in on Friday morning at 10am, I’m smiling and feeling good by noon — because I spend those two hours delivering for Meals on Wheels.
By the way, it’s not just dopamine. According to a long-ago article in Scientific American, generosity also rewards the giver with the feel-good chemicals oxytocin and serotonin.
Not sure if layaways are still done at retailers, but back in the days of K-Mart it was a way for cash-strapped parents (or a single parent) to set aside Christmas gifts for their children and try to pay them off in time for Christmas. What a joy it was to pay off one of the layaway tabs and have the layaway department call the customer to tell them that a “Secret Santa” had just paid the balance due.
Your money does buy happiness—yours and the recipient’s.
Austin…you epitomize the Good Samaritan—“one who acts selflessly to benefit others, even if a total stranger.”
I love the idea of budgeting for random acts of kindness! Thanks.
Another great humbledollar post!
Thanks Austin!
If their finances allow it, a lot of people give money in acts of kindness.
For us – when possible – we give to local and regional food pantries. Also to local and regional homeless shelters.
We know we’re extremely lucky in terms of our financial situation.
Yes, some of it did come from spending less than our income. But, we do KNOW, that the majority of our investment success, and financial situation, was just simple good luck in terms of timing.
So we do our best to help those who – for what ever reasons – have not enjoyed the good luck we have had.
When I used to travel a lot for work, I’d have to stay over some weekends, and I ate breakfasts alone at local diners and small restaurants. I made it a habit to look around at the other patrons, and pick out someone, or a couple, or even a family for whom I’d pick up their tab. I’d tell the waiter or waitress, pay their bill quietly (with a good tip), and I made clear that he or she shouldn’t tell them who it was who paid for them. I was usually gone by the time they left anyway, but I assume it made the day for most of them.
Hey Martin,
Yes, I totally get this as I was in my home town a year ago,having some dinner with my Sis and Brother and he called the waitress over whispering something. As we left, we walked past a table where an elderly couple were very surprised! That waitress was explaining to them, “This is Montana and in our little town it’s a common thing to teat strangers like family.” Of course if they were from Glendive, it wouldn’t have been a surprise. Welcome to Montana! 😉
Austin, Great ideas, thanks! I’ve tried to be sure I have 3 or 4 $20’s in my pocket to share with the bagger at the supermarket or the cart-collector in the parking lot or anyone who’s doing a good job of making life easier for the community. Then I offer monthly contributions to the local food pantry and a non-profit nursing home that took good care of a family member in the past. It’s a lot more rewarding than any form of ‘retail therapy.’
Great story Austin! Due to the last major tax law overhaul the first $20,700 we give each year to deductible organizations does not reduce our tax bill. We started a donor advised charitable fund several years ago and plan to take advantage of the qualified charitable donation in three years when RMDs take effect for us. We have a combined state and federal marginal rate of about 28%, which means that for any deductible gifts we make beyond $20,700 each year, it costs us $72 to give $100, whereas if it is not deductible it costs $100. So any gifts we make, other than to our donor advised fund and QCDs, I ignore whether the gift is deductible and give to wherever it makes sense to me.
Austin, this is a wonderful idea! Though I do planned (tax deductible) giving, I also try to show kindness by contributing to my local food pantry and patronizing local vendors, even though they are more expensive than the large stores outside my town. Your plan reminds me of the pleasure I got a couple times in the past when I made secret cash gifts to people by hiding it where I knew they would find it but not know where it came from. Quite a rush that I still sometimes savor. I like your plan: do this kind of thing regularly. Thanks.
I love this so much. Thanks for this uplifting suggestion!
Great idea and I’m sure much appreciated.
Since COVID I’ve taken to tipping 25- 30%. I tip in cash and give folded to the server so it doesn’t disappear at the table.
I’ve observed that many of these folks can use the money and I have noticed three basic types.
The young person perhaps paying for school or even stuck in the job. The middle-age single mother or must work married women who needs the income to get by and the older person, generally a women who should be retired instead of waiting on me. I often engage them in brief conversations to try and understand a bit.
In any case, passing it on, as you point out, is a great idea and probably brightens a day more than we sometimes realize.
Great article. The only true happiness is the joy or happiness you have provided for someone else.
What a nice article!