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Charitable contributions may be the last thing you have on your mind during tough times.
But, the truth is, giving away money, time, and items is always a good idea.
Here are the top 3 reasons to consider making charitable donations this year…
#1 Tax Deductions
You are going to give a portion of your money to someone. The government is going either to take more than you think is fair, or you will give money and tax deductible goods to the charity of your choice.
If you itemize your deductions, you will definitely want to donate money. Each year, when I do my taxes using a Tax Cut program, I always calculate our taxes without the charitable deductions first. Then, after viewing my refund or what I owe, I plug in the amount of my charitable contributions — which includes a church tithe, as well as clothing and housewares donations. It is immediately apparent that I get a good deal of the money I donated back.
If the gifts are deductible, the actual cost of the donation is reduced by your tax savings. For example, if you are in the 33% tax bracket, the actual cost of a $100 donation is only $67 ($100 less the $33 tax savings). As your income tax bracket increases, the real cost of your charitable gift decreases, making contributions more attractive for those in higher brackets. The actual cost to a person in the lowest bracket, 15%, for a $100 contribution is $85. For a person in the highest bracket, 35%, the actual cost is only $65. Not only can the wealthy afford to give more, but they receive a larger reward for giving. — Charity Navigator
Religious people give charitable donations for several reasons:
Some want to support the work of their church.
Some believe that by giving, they open themselves up to receive.
Still others feel it is their spiritual obligation.
I have personally struggled with the whole "to tithe, or not to tithe" scenario myself. But I’ve discovered that I love helping others, so I have set myself up to be used financially when I did not give through the church.
Now when I meet someone who needs help, I can point them to the church that I have given my money to — knowing that they have the means and also a process set up to help people who aren’t just looking for free money.
Growingyourchurch.com offers 5 reasons Christians should tithe. Their reasons include: to advance the religion, to foster fellowship with church members, to be obedient to God, to deny oneself, and to experience personal blessings.
#3 It Just Feels Good
Like I just mentioned, I used to give money to anyone I thought had a need. I did it because I could and because I was in a position to share. It just felt good. While I learned to not hand out money to individuals, helping someone in need has always made me feel happy.
It is a fact that givers are happier people than non-givers. According to the Social Capital Community Benchmark Survey, a survey of 30,000 American households, people who gave money to charity in 2000 were 43% more likely than non-givers to say they were "very happy" about their lives. Source
However, you are advised not go broke giving money to charity. You don’t want to give just because you are asked, but instead you’ll want to sit down and plan out your charitable contributions. You should give the bulk of your contributions to one charity that you are very familiar with.
I have been a certified tightwad striving for financial freedom since I became pregnant with my first child — and I decided to find a way to stay home with him full-time. I enjoy sharing my personal experiences in my journey back to financial health and planning for a future — which will include sending 2 kids to college and early retirement.