A topic that comes up quite frequently while getting out of debt is whether you should continue giving or start to give to those in need. Are the dollars you're giving better utilized for getting out of debt or should you start / continue to give to the causes near-and-dear to your heart? In this week's blog we share some insight on how best to make this decision.
Getting out of debt is hard work! Some might even argue that losing weight is easier than getting rid of the six-figure student loans many doc's have hanging around their necks for a decade or more after graduating medical school. So why should you continue giving while getting out of debt if it's only going to delay becoming debt-free? Or why should you consider starting to give while you're getting out of debt?
There are many kinds of benefits to giving. Two types of benefits to giving include financial benefits and spiritual / wellbeing benefits.
Financial benefits of giving.
Let's start with the most logical financial benefit - tax deductions. Most organizations (social advocacy, churches, charities, etc.) fall under a tax code that allows you to deduct your donations from your taxes each year. While many of you who are still deeply in debt are not thinking about avoiding taxes, if you continue to follow our advice a day will come when you become a debt-free millionaire doctor, and the challenge of minimizing your tax exposure will be helpful in building future wealth. Learning these tactics earlier rather than later can give you an advantage when you have some significant wealth to manage.
The sad truth is taxes could eat away over half your income (possibly even more in high tax states like CA, HI, OR, MN, IA, NJ, VT) each year if you don't have a tax management strategy!
We're all for paying our fair share in taxes, but do you think you could do a better job using your money to help others than our federal and state governments? We think so too!
Spiritual / wellbeing benefits of giving.
There is a growing body of research that suggests giving is also good for your health and wellbeing. Research conducted by the National Institutes of Health showed study participants who chose to donate a portion of $100 given to them activated pleasure sensors in the brain.
Try the experiment yourself by listing a small amount of money in your monthly budget to random acts of giving and see how it makes you feel. If you're not comfortable giving cash do what Scott does and keep a couple $10 gift cards to McDonalds or Starbucks in your wallet and when you see someone in need give it to them and see how it makes you feel, or better yet, see how it makes those you are giving to feel!
One gives freely, yet grows all the richer; another withholds what he should give, and only suffers want.
Speaking of your budget, having a line item for giving may help you stay focused on keeping to your plan, so you don't fall short on those you plan to give to.
Giving is also a great lesson to teach your kids. The last thing most of us want are children who grow up to be selfish and never share with others and giving is a great way to teach them how to use what they've been blessed with to help those who are less fortunate.
You'll also tend to find more meaning in your life by helping others financially. When you give you get to become part of something greater than yourself. Your giving from an individual perspective may not amount to much, but when you stack your dollars on top of the dollars of many other people it can quickly add up to big money that leads to big change in a positive way.
Finally, if you truly have nothing to give, which we would argue is rarely the case (who can't spare a few dollars in their budget each month), consider giving your time to those in need.
There are so many great ways to give your time not only from a professional perspective using your advanced training as a physician, dentist, pharmacist, etc., but also as a person who is willing to spend time loving on those who don't get much love. Find somewhere to volunteer like your child's school, a local homeless shelter, church, temple, or mosque.
This world, especially in recent times, has become so divisive and uncivil (turn on Fox, CNN, or MSNBC any day of the week to see what we mean). We've forgotten how to disagree with one another, but still love each other, and giving of your time and money can help begin to bridge the gap between us.
If you want to go fast, go alone. If you want to go far, go together.
When we focus on those in need, we take our eyes off the labels we put on one another, and instead start to come together for the good of all people no matter their views on the hot topics that divide us. Only when we come together can we grow as a society, and giving your time and money is a great starting point to heal the pains of this nation and step into situations where you might be forced to connect with those you might disagree with. We can all agree that this world needs more love, and that love starts with you, your money, and your time.