Giving to Charity While Paying Off Your Debt

It’s hard to know which numbers to listen to, when crazy big figures are screaming at you from all sides. First there’s your debt, that 4, 5 or 6-figure number, but then there’s the fact that over 800 million people in the world live in a slum, and that number is growing. There’s the fact that your credit card has a high interest rate, but also that the tiger population is down 97%. You’re supposed to have more than a million dollars by retirement, and your nephew wants you to buy a $25 candle for his school’s fundraiser.

Your conscience wants to do one thing, but your financial security begs for another. It definitely can be maddening.

So ok, take a breath, and we’re going to talk about how donating to charity can actually help you get out of debt faster. And no, this is not about math. Money issues are just as much about emotions as they are about digits. You didn’t charge new jeans on credit because the math made sense.

Here are 5 things to remember when getting started in finding a balance between charitable giving and paying down debt:

1.    Donating to charity will help you remember that your money has power. Instead of going out to eat for lunch, you might realize that you could instead give someone in a developing country glasses, empowering them to see. Remembering that the dollars you might throw away on movie tickets could mean a real life change for someone else will help you be more intentional with your spending.

2.    You’ll see your own situation in a new light. Our culture can sometimes trap us in a bubble where we see more extremely rich people than regular people. Soon we can find ourselves thinking, Why don’t I have a designer purse and she does? We forget facts like more than 700 million people live on less than $1.90 a day. When we feel sorry for ourselves because we are in debt, we forget all the people who are truly powerless to take hold of their own financial situations. There is a difference between being broke and being poor, and donating to charity can remind us that there are always people suffering real poverty.

3.    Giving makes you happier. While being in debt can get you down, giving to others will lift you back up. Research has shown that you’ll get most of the boost if you give to someone in person, but donating in general also makes you feel good. One idea might be to keep $5 in your wallet every month to give to someone you see who needs it.

4.    Be as smart with giving as you are with saving. Don’t just give to a pop-up “charity” after a disaster – it can be hard to tell if some of these organizations are legitimate. Instead, check out Charity Navigator to find out which non-profits consistently put their cash in the hands of those who need it most. Here’s a great list to get started.

5.    Give something other than money. If you’re extra tight on cash, consider donating items to the thrift store, especially a store that supports a cause you believe in.  And as the adage goes, “time is money”, so think about donating your time to a charitable organization such as Habitat for Humanity or an animal shelter.  Your help can often be as valuable as a cash contribution.

Remember that you can start with as little as $5 or an hour of your time every week. Around the world and across cultures, charitable giving is honored as an act of humanity. Giving to others will remind you what all the money is for in the first place.

The materials on this blog are provided for informational purposes only and do not reflect the opinions of ChimpChange LLC or Central Bank of Kansas City, Member FDIC. Several of these blog posts may contain links to content on third party websites which are provided for your convenience, please note that linked sites may have a privacy and security policy different from our own, and we cannot attest to the accuracy of information. ChimpChange LLC and Central Bank of Kansas City do not guarantee nor expressly endorse any particular product, service or third party content.