I want to make the argument that giving on a regular basis will actually increase your net worth. Intuitively, this may not make sense since giving away money means you’ll have less money. But let me propose 2 reasons giving can actually increase your net worth.
Giving makes us better at budgeting and living below our means.
The natural tendency for most people is to live at your means. This is true even as your salary increases over time. We certainly experienced this. A lot of times people will say they can’t afford to give right now because the money is tight, but once they start making more they will be able to give. Now, don’t get me wrong. This could be true in some situations. I recognize that I have a lot of privileges that others don’t. However, the larger problem I see with this is that if you can’t afford to give now, that means you are living paycheck to paycheck. So what makes you think if you haven’t budgeted to give now, your habit will change when you start making more money?
So you see by first learning to budget in your giving, you will also be learning how to live below your means. And this will pay off with huge dividends over the years as your income increases. You will be able to save more because you’ve learned how to stick to a budget. And perhaps, you will even avoid lifestyle inflation.
Giving changes our perspective about money.
When we realize that there are so many out there who are not nearly as well off as we are (you are top 1% of the world if you make 34,000 or more per year) you begin to see things differently. This can help to take the focus off what you want and instead turn it to others. You begin to realize you probably don’t really “need” a new car this year, the old one you have will work just fine. The point is not to feel guilty about what we do spend (one could certainly say I spend an exorbitant amount of money on myself when compared to most of the world), but to begin to increase our contentment with the things we already have. This perspective will help you to change your spending patterns as you spend less on yourself.
Here’s a video recap of this article. Go easy on me, this is my first one:)
There are certainly a lot of reasons you can make for giving, from making the world a better place to helping those in need, to increasing your personal satisfaction and happiness. For us personally, we give out of a conviction that everything we have is a gift from God. We believe we are to be good stewards of the money that has been entrusted to us.
Giving is an essential part of our investment strategy and has helped us to manage our expenses. We started giving 10% of our salary per month since our first jobs out of college. We still struggle with life style inflation but I’m certain learning to stick to a tithe has helped us to better manage our budget over the years.
How about you? Has monthly giving made you better at budgeting?