Charitable Giving On a Budget

a group of people that are in a charity uniform gathering objects.

In our experience, people are generous, and it’s important for most of us to give to causes that we find important. Unfortunately, if you aren’t organized with your budget, charitable giving can undermine your personal finances.

Generosity is great, of course, but if you’re generous to a fault you can end up in a position where you aren’t able to help anyone–including yourself. We want you to consider some ways to be charitable while maintaining a responsible budget.


Charitable giving must be a carefully planned part of your household budget. The dollars you donate to causes should be laid out well in advance and set aside for a specific purpose. Having a carefully controlled, limited amount you set aside for charity doesn’t make you a bad person in any way; in fact, it’s because you’re a good person that you need to budget carefully. If you don’t, you’ll end up giving more than you can afford and creating an unstable financial situation for yourself.

Pay Yourself First

If you are behind on your bills, struggling to make ends meet, or facing potential foreclosure, then YOU are the charity. There’s no shame in devoting yourself to repairing your own personal finances before you help others. Your first order of business should be to get yourself out of financial trouble and balance your own budget. Only when you are financially healthy can you be of real help to others. And when you are back on your feet financially, you’ll be positioned to make up for the time you spent struggling to get caught up.


Economist Tim Harford writes that if you can afford it, you’re better off giving money than volunteering for a charity. Simply put, the dollars you give are usually more valuable to a charity than the hours you spend volunteering. If you can get overtime, you’re better off working a few more hours and giving that money to the charity of your choice.

However, many clients we counsel don’t have extra money and cannot work overtime when they want to. For many people who have tight budgets, volunteering is the only way they can help a charitable cause. It’s a fine way to give of yourself without disrupting your personal finances.

Choosing a Charity

Another economist, Steven E. Landsburg, argues that it makes more sense economically to pick one charity and focus all of your contributions toward them. Most of us split our charitable giving up among many different organizations or causes, but it makes more economic sense to make one larger contribution to the top charity on your list. We like this idea because it makes budgeting easier, and because budgets are so essential, we want everyone to make that part of their personal finances easy to deal with.

When choosing a charity, always start by consulting the Better Business Bureau. Go to and look up charities on their site.

Use the internet to check out organizations you want to give to or work with. If they sell your contact information to other businesses or charities, consider going somewhere else. If they don’t value your privacy, find another charity that does.

Also, don’t be pressured by telemarketing calls or strangers stopping by with home visits trying to sell you something for the charity. Sure, you can buy cookies from the local youth group or help the school band fund their operation, but beyond that you need to be cautious.

Friends and Family

A common form of giving involves helping friends and family members make ends meet. While this is important for people who care about the people in their lives, be careful of giving too much. Just like with other forms of charity, if you wreck your personal finances helping others, everyone will end up worse off. Be sure to only give what you can afford, and make it clear to your loved ones that there are limits to what you can give of yourself.

Apart from helping friends and family, you can also get them involved in your charitable activities. Invite others to volunteer with you and you can increase your contribution without draining your checking account. And consider donating “favors” to charity. For example, say you helped a friend move and they want to pay you back. Tell them they can repay you by volunteering for a particular charity and they’ll be even. Again, you’ve managed to make a contribution without donating actual money. It’s a great strategy for people who want to help others, but don’t have the extra cash or time.

Remember, if charitable giving is important to you, it should be part of your financial plan. Once you’ve set out how much you can afford to contribute, don’t exceed that amount. Maintaining the health of your own personal finances must come first; only after you’ve got your own finances in order can you make a meaningful contribution to the cause of your choice.

If you need help creating a budget that lets you give more generously, call us today for free credit counseling and expert debt advice.

Article written by
Melinda Opperman
Melinda Opperman is an exceptional educator who lives and breathes the creation and implementation of innovative ways to motivate and educate community members and students about financial literacy. Melinda joined in 2003 and has over two decades of experience in the industry.

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