4 Benefits of Giving & Why It's Good for Your Budget
You know cucumbers and kale, fresh air and water—all these things are good for you. And giving? Well, it might just be like blue sky in your budget and sunshine for your soul. There are benefits of giving!
When you look at someone’s budget (a thing you can do quite often these days with YNAB Money Snapshots), it’s very easy to tell what a person cares about: they spend money on it. And here at YNAB, we preach this all the time (it’s our soapbox and we will stand upon it): your budget represents your priorities!
And we want to take that one more step further at how giving is just one further extension of showing your priorities. A lot of people are thinking about giving right now, so we thought it was a good time to talk about it. If there is a cause you care about, does your budget show that?
The Benefits of Giving
We’re going to go over four of the benefits of giving and explain why it is good for your budget, good for your soul, and lay out some groundwork if you want to give but don’t know where to start.
1. Giving Extends Your Reach
You only have 24 hours in a day, and a third of those hours are ideally spent sleeping (OK, or scrolling through your phone). You might wish you had a svelte set of octopus arms or an energy level powered by a lithium ion battery, but the reality is you just can’t (and shouldn’t) be trying to solve all the world’s problems. You’ll burn out!
When you siphon some of the dollars you earn toward a cause you care about, your reach is extended—without demanding more time from you. Your wish is granted for svelte octopus arms—and they’re not nearly as unsightly as you would think.
2. Giving Takes the Focus Off of You
Sometimes, in the innocent quest to optimize your money, it can consume you. At some point, an unyielding focus toward wealth accumulation might leave you drained and jaded.
We don’t talk about greed much (outside of Enron executives and predatory lenders), but it’s a dangerous little poison that can creep into anyone’s brain to make your money mentality turn toxic.
When my view of money turns toward something along the lines of “you can pry it from my cold, dead hands,” I’ve found that giving tends to warm up, unfurl, and bring some life back into those metaphorical fingers.
When you give some of your hard-earned money away to a cause you care about, it pulls your gaze up from the tiny world of your budget transactions and into a larger, lovelier story of good.
3. Giving Helps Others
No need to state the obvious here. When you have money and give it to someone who needs money, that is a helpful thing to do. It feels good. But before we take on the savior mentality though, it’s important to take stock of some of those forces that may have helped put you in one position and another person in a more disadvantaged position.
Read more about the headwinds and tailwinds powering the wealth gap.
4. Giving is Contagious
If you’re a parent, you better believe your little mini-me’s are soaking up your actions like a sponge. It doesn’t matter if you tell your kids outright or not that you give, they’ll pick up on it. Your generosity will teach them to be generous, no additional curriculum needed.
Not just that, but we’ve heard some cool stories about group giving—a circle of friends united around a cause and sending their money accordingly, or taking part in a matching gift to pair smaller donations with a larger benefactor.
How to Set Up Giving in Your YNAB Budget
We see Giving categories set up a couple different ways in people’s YNAB budgets, and of course, gold stars for all—there’s no wrong way to do this.
In the example below, this budgeter gives the same amount monthly and puts it in a category group of essentials along with their mortgage. All giving and donations rolls up into this one category.
In the next example, this budgeter fits recurring donations in their Quality of Life category group for recurring gifts and adds another category in their Just for Fun category group called “Spontaneous Giving” for one-off gifts to buy a friend coffee, or to buy dinner for a friend who lost a family member.
In the last example, a Category Group is set up for all giving. Each organization that gets recurring monthly donations gets its own line, with an extra category for one-time donations. This makes tax time a lot easier (for those who itemize deductions).
Want to Give But Don’t Know Where to Start?
I chatted with Chrissy, a YNAB team member who used to work in the non-profit sector.
“If you want to start giving money away but don’t know where to start, look at local organizations,” she says. “Supporting locally is often more powerful than supporting at a national level—your dollars have more room to make an impact.”
For any organization you would consider giving to, do research and vet how they are spending the dollars they’re already getting. Many nonprofits are required to file an annual report with the IRS that lays out how much money they bring in and what they use that money for.
“Compare their operating expenses to how much they’re spending on client programs and services,” Chrissy says. “And ask yourself: does this organization’s work line up with my priorities?”
One-Time vs. Recurring Gifts
When you’re looking at a one-time gift or more ongoing support, know that any gift is welcome. But do consider this from the organization’s perspective: when an organization knows you’re setting up a recurring gift, they’re able to plan. “When a non-profit knows you are giving on an ongoing basis, they can create more sustainable programs,” Chrissy says.
But I Don’t Have Money to Give!
Giving financially isn’t the only way to support a cause you care about: you can give of your valuable time too. Find a cause you are passionate about and see if there are any volunteer opportunities or resources you can offer at a related organization. The benefits of giving your time often include getting to witness the impact of your efforts.
Whether you’re continuing to give, expanding your giving, or you’re giving for the first time, know that there’s no amount too small, and it’s just one more way to line up your priorities with your life.
If you’re interested in starting a budget that can help you explore the benefits of giving, try a free trial of YNAB and start matching your money up with what matters most to you.