Welcome to week 1 of the budgeting series. For the next 7 weeks, I will be discussing a different aspect to think about when it comes to budgeting. I hope that it will give you a new perspective on how you can start dividing up your money so that every bit of it is put towards something meaningful and useful, rather than wasted.
This week I’m getting-going with giving to charity. If you are debt free, up to 10% of your monthly income could be put towards a charitable venture. If you’re not out of debt yet, I’d keep this money for buying gifts for family and friends for when its birthday/Christmas time etc. You could divide your 10% between the two. Don’t worry if you don’t have a full 10% to give yet, its something to aspire to and build on.
The money-pie method, for those of you who haven’t seen the post yet, is a method I learned from Ann Wilson, The Wealth Chef, and is a way in which you can allocate your monthly income so that your money is given specific jobs to do. The allocations of your money (in percentage of income) include:
- Essentials (50-60%)
- Charity/giving (5-10%)
- Fun (5-10%)
- Education (5-10%)
- Investing (10%)
- Saving for big events (10%)
- Debt and emergency fund (5-10%)
Mine varies every month, but I’m getting closer to the targets as time goes by. When all my debt has gone, this will improve my ability to allocate even more.
Charity begins at home
The UK might be a small country of over 65 million people, but we have BIG hearts. According to the National Philanthropic Trust-UK (NPT-UK), 61% of people give to charity on an adhoc or regular basis. £185 million in 2015 was raised just from bake sales!
The Charities Aid Foundation (CAF) released 2017’s world giving index recently, and this showed that the UK ranks 11th out of the world’s top-20. We’re more likely to donate our money than our time in volunteering (64% vs. 28%) We have dropped a few percentage points though over the years as our giving seems to be getting less overall.
And that’s not all, the CAF-UK Giving Report for 2017 shows that women are more likely than men to give their time or their money to charity in the UK, but when men do give, they tend to give a larger amount in one go.
So although the UK as a whole is generous, we still need to remember to look after ourselves!
This analogy is used a lot, but when you’re on a plane going on holiday, who do they tell you to sort out first with the oxygen mask if it is needed? Yes that’s right, YOU! And the reason for this is very obvious. Without oxygen, you’ll lose consciousness within seconds, rendering you completely useless to anyone, including your children, so that’s why you have to sort yourself out first before others.
And the same goes for giving to charity, or buying presents for your friends and family. Every year, Brits spend huge amounts of money on Christmas presents – each of us spend on average £500 more in December. I’m surprised its only this much!
If you don’t have a budget for this, the credit card can be a tempting lure, and if you already have debt, this only deepens the hole you’re in. It takes time to build up, so divide how much you think you’ll need into the number of paychecks you have left. You may not need to put as much into the pot each month as you think!
The same goes for charitable giving. While its great to give your money to the latest donkey sanctuary (for example!), if you’re in debt, you’re actually putting yourself and your family at a massive risk and disadvantage. Why not volunteer your time at the donkey sanctuary instead, and put that monthly £10 in your debt-fund. Don’t forget that you can pledge some of your money in your will when you die. This is still helping the charity, but you’re not making life hard for yourself now.
Once you’re out of debt and earning money by investing, then you can most certainly start to give more freely (and as a developed nation, we have a moral duty to do so). I have some charities below who I give to when I can.
“The best way to help the poor is not to become one of them” – Lang Hancock
Things I’ve done
I have done two charity events for the Genesis Research Trust, a charity that is amazing because they provide financial support for research in women’s health, such as IVF, premature birth, polycystic ovaries, endometriosis and recurrent miscarriage. I have some amazing memories from the treks that I went on to support them. With a combination of my own giving, and with the generous giving of others, I have raised over £6,000 for this charity, and will most likely get involved again in the future. I have some pictures for you here:
The charity takes people all over the world, so not only do you have a lot of fun, you’re raising money AND AWARENESS for an awesome cause too.
Another brilliant organisation that I was introduced to recently allows you to lend money to projects around the world through crowd funding. The projects are posted by people looking to improve their business, bring in more money, and therefore improve their lives for the better. You also get your money paid back to you, so its not charity exactly. What you are doing is using your money to help support someone’s livelihood who may have otherwise been able to do so. Check out kiva.org to get involved!
What else can you do?
And so what if you don’t have extra money to give because you have to pay the charity that is you and get your debt blitzed? Just give your time. Learn to knit and give tiny hats to the local hospital to keep premature babies head’s warm. Donate your breastmilk! Offer to help out in a local primary school. Visit the elderly in a care home, offer to do a neighbour’s shopping for them. If you own a business, use your product or skill to raise money. You could give away something to a raffle or, like my hairdresser, go out and do haircuts for the homeless.
Whatever it is, I guarantee you’ll make a difference to someone, somewhere.
Once you’ve sorted yourself out financially, you then have the satisfaction of being about to give freely without putting yourself at risk. In fact, by giving, you’re opening up the channels to bring more money into your life. Karma most definitely exists.
Women are natural leaders in this area! Lets start showing the world what we’re made of and bring wealth into our lives so we can get out there and help far more causes. Get started by working on yourself and get a grip on your debt and your savings.
Go to week 2 – Budgeting for fun!
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