FREE NEWSLETTER
I’m curious how folks have balanced considerations of financial security and charitable giving, particularly (but not only) those who share the Christian faith.
I’m in my early 40s. I have a wife (like me, a public employee) and two young children, and I have the opportunity to take a higher-paying job within my organization in the coming months. I don’t anticipate increasing my spending with increasing income, at least not to any substantial degree. Rather, I’d either increase my savings, increase my charitable giving, or both. Whether or not I take the job, this opportunity has got me thinking (as I continually do) about my savings and giving rates.
In general, it’s incredibly hard for me to know how much to save for retirement or potential future financial hardship — with or without a salary increase. What if I lose my job and have a hard time finding comparable pay at a job I don’t hate? What if one of my kids ends up needing a great deal of financial help? What if future returns are very far below historical averages? What if my Social Security benefits are considerably less than projected? What if I or my wife need considerable long-term care? And on and on. All such questions suggest that its a good idea to save more now (as do many verses of the book of Proverbs — e.g. “A good person leaves an inheritance for their children’s children, but a sinner’s wealth is stored up for the righteous”).
On the other hand, I’m certain that have more savings and opportunity than most people in the world, and various retirement calculators suggest that I’m on the right track. Moreover, and more importantly to me, the author and perfecter of my faith commands us not to worry and not to store up treasure on earth and to give to anyone who asks. He proclaims, “You cannot serve both God and money,” and he ever emphasizes care for the poor.
I tend to obsess over moral issues. At the same time, it is human nature to err on the side of hoarding and self-protection. Also, for what it’s worth my understanding of my faith is not that we give to others in order to earn God’s favor, but rather as an act of faith in and thankfulness for God’s provision and an act of care for others.
What do folks think about balancing saving and giving?
p.s. I currently have only sporadic Internet access — please don’t be offended if I don’t respond to others’ comments.
I relate to many of the comments made. Early in our marriage, my wife and i wanted to give 10% to our church, but the cost of living with two small children made that seem impossible. So we decided that, whenever we got a raise in pay, we would give 20-40% of the new money to our church. We still got more take-home pay than before, so there was little pain in reducing slightly the amount of new money.
We noticed that our giving level of around 2% of income slowly rose each year because of the new money being allocated at a higher level. In short, it took us a little over 20 years to reach our 10% goal, but we kept using the same process. It was good to note that we were able to contribute over 25% of our income last year to religious and charitable causes, and every year for over 50 years we have had more take-home pay than the year before while giving away more money than we did the year before.
Baby steps can add up.
How much and when you give, for most of us, somewhat depends on what stage of life you are in. In our family’s early (working) years, saving for retirement was the paramount goal. We contributed a reasonable amount to charities, but securing our retirement came first.
We have been very fortunate, and have (like many Humble Dollar readers) arrived at a point that we have far more than we need (or want to spend on ourselves and family), and now, in retirement, we are “making up for lost time” in our charitable giving. We give at least 20% of our annual gross income to charities through Qualified Charitable Distributions from traditional IRAs, and plan on giving at least 20% of our estate to charity (again, through bequests from a sizable traditional IRA).
We firmly believe that those of us that have been blessed with good fortune have an obligation to contribute to the betterment of society – and, it makes good sense, tax-wise!
Time, talent and treasure are the basis of our charitable giving as a family. There have been times in our life when we made heavy time investments in specific charities we believed in. Some religious, some not. Our financial gifts are channeled through our Fidelity Charity Fund. We’ve been able to fund it with appreciated stock and it works for us.
To me religious or not, we all should contribute to the well being of our brethren who are poor. And not necessarily to one organization, but many that are close to our hearts. Giving back is for all of us to ponder.