Personal finance often feels like it’s just you, your partner, and your money journeying up the mountain to reach your financial goals. It’s easy to get laser-focused on your money, your dreams, your goals, your debt reduction. Now, don’t get me wrong, this laser-focus can be a great thing. It can ensure you’re not measuring yourself by any other yardstick but your own. However, it can also leave you blind to the needs of others.
Stay with me on this mountain-hiking metaphor. If everyone headed up the trail with the same amount of gear and provisions, you could just focus on your own journey. But if 2020 has taught us anything, it’s that we can no longer ignore the multi-faceted landscape of privilege and prejudice that creates deep disparities in wealth throughout the U.S. Nor can we ignore the reality that sometimes a trek is waylaid by chronic illness, divorce, or job loss. Particularly if we are in a position of privilege, we have to be mindful of the journey of others.
So how do we broaden our perspective to remember we’re not climbing the mountain alone? Giving is a great way to start. There are a variety of ways to incorporate giving into your financial life even as you are working to achieve your financial goals. In other words, you don’t have to wait until all of your needs and wants are satisfied before you can begin helping others on the trail.
Here are a few simple ways to help your neighbor without taking your financial plan off course:
Become a Recurring Giver: Even a modest monthly contribution to an organization you’re passionate about keeps its mission on your mind and helps the organization meet its regular cash flow needs. While a $100 spontaneous gift might be a tough hit to your budget, a planned gift of $10 a month ($120/year) will barely register on your financial radar screen.
Tip: Not sure what organization to give to? Take a look at the ones you’ve given to in the past or find a reputable charity that aligns with your values using a site like Charity Navigator.
Start a Giving Fund: While giving to charity can help on a macro level, it feels really good to be able to respond when micro-needs arise. My husband and I set aside money in a savings account so we can be generous when we feel moved to help. For instance, this year we’ve used this money to buy flowers for a loved one who had a medical procedure and given one-time gifts to charities working to alleviate systemic racism (before we were ready to commit to a recurring gift). In the past, it’s enabled us to leave extra generous tips, treat financially-strapped friends out for a meal, contribute to disaster response efforts, and so much more.
Tip: Because our recurring gifts are part of our monthly budget, we replenish our giving fund using extra money that we bring in: 10% of the profits of my side hustle, and a percentage of any windfalls (like tax refunds), go into this fund.
Pay Attention to What (and Where) You Buy: There are plenty of ways to care for those in need (and the earth) that don’t involve giving money. Take the time to articulate the values and causes you care about. It’s impossible to tend to every issue as you shop, but it can be helpful if you have a few key ones to guide you. Because my husband and I both care deeply about sustainability, we try to buy things that are sustainably made and/or sourced from companies that not only profess this value but act on it. Our shopping takes more time, but I find the process of slowing down helps us to avoid overspending and really feel confident about the ways we are using our money.
Tip: Shifting your strategy to buying products in line with the causes and values you care about is a long process. Start small and grow. Consider starting with a category (like commiting to eat at Black-owned restaurants) or a specific product (like making sure all of your chocolate is ethically sourced).
Investigate Your Bank and Investments: Outside of owning a home, most of us have our largest amount of wealth through investments, which means what happens with the money we save is often where we can make the most impact. Take a close look at the companies who manage your investments: Do their values match your values? How are they investing your money? Do they focus on positive social outcomes as well as making a profit? These are important questions not only for your investment companies but also for the bank or credit union you use. Curious about socially responsible banking? Check out this article from NerdWallet. And don’t discount the emotional return you’ll get knowing your savings are financially supporting things that matter to you.
Tip: A few thoughts as you do your research. First, don’t be suckered in by nice language; ask for receipts. In other words, if you can’t see clear evidence of these values being lived out, that’s a good sign they may not be. Second, if a financial professional at any of these companies can’t clearly answer how and where your money is invested, that’s a big red flag. It should never be so complicated that it can’t be explained. Third, you don’t have to sacrifice your values to earn a profit. The socially responsible investing movement is all about finding ways to make money while doing good. It is possible!