My in-laws are content with their lives. Whenever they desire something, be it a new car or a trip, they proceed to acquire or book it immediately. They prefer a simple lifestyle, which allows them to live comfortably within their means. Their frugal tastes leave them with spare money to indulge in their desires without necessarily having to save beforehand. Hence, gifting them becomes a little tricky. We want to give them presents that hold meaning, and while they graciously accept whatever we offer, we seek to provide more meaningful gifts.
This led us to the concept of charitable giving as a gift. My in-laws support several causes, and we decided to allocate the money set aside for gifts to these causes instead. Sometimes, the charities provide a card to give, other times we arrange it ourselves. This method of gifting appeals to us, as it’s quick, adaptable to our budget, and meaningful for the recipient.
Importantly, our charitable contributions aren’t limited to gifts alone. We also donate to causes that touch our hearts. Whether donating as a gift or to an important cause, you experience benefits, not just sentimental but financial as well.
When choosing to donate to charity, you naturally spend less than when shopping for gifts. By giving your gift budget a definitive direction, you eliminate overspending or sacrificing the quality of gifts. Your gift budget is simply split evenly among the recipients.
My husband and I have been dealing with significant student loan debt for over a decade. Still, early in our marriage, we decided to contribute 10% of our pre-tax income to our church, a prevalent practice among the Christian community. This decision not only helped us manage our finances better but also significantly increased our financial discipline.
Charitable giving also provides tax benefits. Donations are deducted from your taxable income. Therefore, ensure you select a charity that is recognized by the IRS to avail these benefits. Additionally, if your income borderlines a particular tax bracket, your charitable contributions could help lower not just your taxable income but possibly the tax rate you pay as well.
Further involvement with the charity you contribute to could lead to volunteering, exposing you personally to the cause. This direct engagement may nudge you to reevaluate your own lifestyle choices and shift towards simplicity. Not to say that it’ll make you completely relinquish materialistic pleasures but it might just lead to increased financial security, giving you an opportunity to clear debts, save for retirement, or set aside money for your children’s education.
To maximize your charitable contributions, primarily budget your donations. Confirm that your chosen organization is recognized as a charity by the IRS, maintain records of all donations, research the organization to ensure your donations are used efficiently, and if you’re passionate about a cause, support it without necessarily expecting a financial return. Squadgiving may not just be a way to evade taxes or save money on Christmas gifts, but you’d be surprised at the financial benefits that come along with it.
How has your pocket benefited from your charitable donations? Do you donate to charity as a means of gifting others?
