With an unemployment rate that hasn't been under 7% since 2008 and with businesses struggling to grow for the past several years, some economists are predicting that this is the new norm. Even if your view isn't quite as pessimistic, it's important to accept that, at least for now, this is a reality. However, that doesn't mean that you have to halt your charitable efforts or contributions. Everyone hopes our country eventually reaches a new heyday of widespread business expansion and a wealth of job opportunities, but until then, here's how to maintain your charitable efforts.
1. Budget Your Finances
If you're going to continue to donate to charity, budgeting is a must. Create a basic Excel spreadsheet to track your finances or use a free online budgeting tool like the website Mint - one of the most popular. Whatever method you choose, be sure to detail your expenses, weigh them against your income, and always look for ways to save. Start by clipping coupons for groceries and cutting back on personal purchases. Then, research the competition for all your monthly services and consider switching if you can save money. Bundling services such as phone, cable, and Internet under a single provider can save you money, as well.
2. Donate Your Time
If you still find yourself cash-strapped, understand that your time is just as valuable to charitable organizations as your money. Check with your church or look on the Internet for ways you can serve locally without a specific monetary donation. Contact a nearby chapter of the United Way or the American Red Cross to find good places to volunteer and how you can help.
3. Adopt a Moderately Minimalist Lifestyle
I'm not advocating that you sell your car and all your furniture, but by getting by on less, you can donate more. Stick with your current wardrobe, avoid the temptation to add services like high-speed Internet and a 500-channel cable TV package, and consider canceling your home telephone service. You don't need that latest smartphone, and going from a 50-inch flat-screen TV to a 70-inch won't make that much of a difference. The short-term gratification you enjoy from any upgrades pales in comparison to the satisfaction you get from donating to those in need.
4. Sell Your Clutter
Are all your old cell phones stored in a drawer? What about a no-longer-needed GPS or digital camera? All of these products can be sold on the Internet by opening an account on eBay or Amazon. If you still have those old college textbooks, list them too. Price your items cheap to make quick sales and set your profits aside strictly for charitable giving.
5. Pay Down Your Debts
Work toward paying down your credit card debts and once you get them behind you, you'll have a wealth of funds to donate. Total up your balances, use the monthly surplus your budgeting efforts have helped give you, and come up with a time-bound goal for when can be totally debt-free.
Conclusion
Now that you know how to free up your funds, let's decide on the most effective places to donate them. First, make sure your money goes to a cause you truly believe in. After you've narrowed the field down, look up any potential charities on the website Charity Navigator or GuideStar and investigate their maintenance costs and expenses. No less than 60% of donated funds should be going to the actual charitable activity. Be sure to keep solid documentation of all your donations and give only to IRS-approved organizations so you can get a tax deduction. Living a generous life is important, but that doesn't mean you shouldn't benefit from it through reduced tax liability.
What ways can you think of to be more generous in our new economy?
Ken Danley lives in Virginia and frequently donates his resources and time to causes he believes in. He also writes about strategies for budgeting and managing money.
Publication date: January 29, 2014