How to Become a
More Generous Giver
It's safe to estimate that 99.9% of the personal finance content online has the goal to grow or maintain your money.
Today we’re going to talk about the 0.1%: Giving Money Away
Giving away money is a crazy concept.
Both because “I earned it, it’s mine” and also because we often feel we can’t afford to.
When surveyed, most people think they “will start giving one day, but not yet”.
“Once I earn more” | “Once I’m in a house”
While those are logical, well-meaning intentions, data shows that “one day” simply doesn’t come. We always find more reasons to wait, even as incomes rise.
If you earn $50k-$100k, you probably think you’d be more of a giver if you made $400,000.
Would it surprise you to know people making between $100-$500k give nearly 1/3 less as a percentage of their income than those earning $50k-$100k?
Those earning $400k probably think they'll start giving more when they earn $1,000,000.
Nope.
As a percentage of income, those earning $500k-$2,000,000 give nearly identically to the $100k to $500k range (3.1% and 2.9% of income).
Everyone thinks they need just a bit more to start being generous. Reality says otherwise.
And this is a problem because giving is a great thing.
Few things unite every religion and worldview like the command to be generous.
Each commands it and tells us the beautiful secret of giving: It’s good for us, too!
So, how do we start? Small and early.
Like saving, building the giving muscle early in your career will strengthen it over a long period of time, even if you initially start small.
Each year, I speak to college classes and nearly every student thinks they’ll be incredibly generous one day.
But we likely won't wake up one day and start giving away 20% of our income.
Most of us couldn't take that sort of lifestyle hit after getting used to spending that 20%.
If you plan to give one day, start small and grow over time.
Start with 1/10th of 1%:
If you make $50,000 that’s $50.
$100,000 that’s $100, etc.
Give to causes you care about. Take pride in knowing you are helping to make a difference.
$100 can
- Make adoption free for a new pet owner at an animal shelter
- Pay for a family’s Christmas dinner at a local food pantry
- Give needed medical supplies to doctors in disaster relief efforts
Convinced to give but not sure how you'll afford it? Budget for it.
It sounds crazy to budget for something like giving, but if you don’t plan it, it won’t happen.
Make a “giving fund” so you can confidently contribute to a cause without stressing what it will do to your budget.
Like investing, generosity compounds.
Give for four months in a row and you have a new hobby.
Give for four years in a row, and it becomes part of who you are.
Are you naturally a generous person? Here are some ideas on how to radically give:
- Give every additional dollar away once you hit a certain income for the year
- Every few years give away a percentage of your net worth in addition to your income
- Become a mega-tipper: Never tip less than a set amount ($25, $50, $100, etc.) no matter the cost of the meal
Everyone’s situation will be different.
My goal is always to provoke thoughts, not prescribe an exact solution.
However, if you’re reading this in the U.S., you've been brought up in a culture that has a bias against generous giving.
Perhaps this gives you a nudge to act ever so slightly outside of that culture.
