Why Giving Should Be an Important Part of Your Budget
Two weeks ago I booked a plane trip to Haiti. In November I will be joining my cousin Jennifer and three others to visit and support the work of Underdog Social Ministries, tour a local church and school and help out at an orphanage. We will also be helping the organization brainstorm ideas and initiatives to gain additional support for the work they are doing.
One of the main reasons I wanted to get out of debt was to be able to travel the world to find people and causes that needed attention. I have a personal mission to serve the world and being debt free has allowed me to give in bigger ways that I have ever imagined.
But giving doesn’t start when you get out of debt; in fact, giving should always be a part of your budget at any given time. It’s an important part of who we are as human beings. So why is giving so important? There are many reasons but here are my top three reasons:
- Giving is good for your health. Research has shown that giving to others actually promotes improvement in health. A 2006 study by Rachel Piferi of Johns Hopkins University and Kathleen Lawler of the University of Tennessee showed that those who showed social support to others had lowered blood pressure than those who didn’t. And research recently published in the Journal of Economic Psychology by Baris K Yoruk, an associate professor of economics at the University of Albany-SUNY found that donating to charity can improve a donor’s physical and emotional well-being.
- Giving connects us with others. When we give to others, it connects us on the most basic human levels, especially when we are actively taking care of a person’s physical and emotional well-being. Think of the time you have donated to a GoFundMe campaign to help with holiday presents or paid to attend a benefit for a sick child. Your financial donation connects you with that person – you have a vested interest in helping them improve and seeing them progress.
- Giving focuses on something greater than ourselves and promotes an attitude of gratitude. When we budget to give to others and intentionally give to those who are in greater need than we are, it allows us to take the focus off of ourselves and put others needs before our own. It can also instill gratitude for the gifts and resources we have been entrusted with and, in turn, we focus on using those resources wisely.
The act of financial giving is a powerful witness and connection as human beings. Making giving a priority in your budget actually demonstrates that you are being a good steward of the gifts you have been provided. It shows that you are willing to put someone else’s needs ahead of your own. And in managing those resources wisely to include giving, you are establishing a pattern and a heart to give so much more when you get out of debt.
Giving money away, particularly the act of spending it on others, also makes you feel richer and makes you happier.
You feel richer because you’re creating cognitive dissonance in your brain. You may not feel like you have much money left over at the end of the month; however, if you’re giving money away, then you are telling your subconscious that you *do* have more money than you thought. You have enough money to give away, so you *must* have extra money.
Furthermore, giving money to someone else (rather than spending it on yourself) helps you feel a social bond. We’re happier when we have stronger social ties than when we live in isolation, and helping others builds those social ties.
Finally, if you are concerned about your budget and whether or not you’ll feel tighter at the end of the month, and how much pain you’ll feel because of it, you’re falling victim to something called the region-beta paradox, which is a psychological phenomenon where we think that we’ll experience more intense pain for a longer period of time over a given negative event than we actually will. Hedonic adaptation allows us to quickly adjust to that more limited budget.
Additionally, because we’re giving and we’re happier because of it, we’re creating a virtuous cycle. We want to earn more money so we can give more of it away. That drives Warren Buffett, Bill Gates, and Dave Ramsey, and it’s excellent motivation because it will align with your personal values.
To read more about the psychological effects of saving: https://www.jeanchatzky.com/wednesday-welcome-jason-hull/
To read more about the region beta paradox: http://myfinancialanswers.com/are-your-employees-financially-prepared-they-dont-think-so/
Thank you for all the great insight and resources – much appreciated!