Budget for family vs. charity

[MamaChu]

Does anyone have any suggestions for how to properly balance one’s spending for the good of one’s family vs. the needs of charity? I know that 100% of the money I earn should be used to glorify God, but I am having trouble figuring out how to put that into practice. My husband and I do better financially than the average American family, which means we do better than the great majority of the rest of the world, and I feel the weight of the saying that “to whom much is given, much is expected.” We live frugally, shopping at second-hand and discount stores, in an effort to be good stewards of what we’ve received, and are constrained in that we have significant student loans to repay. Eventually, we would like to get to the point of donating 10% of our income to charity, though currently we give less than 5%. Whenever we find ourselves with some extra money, say, from our tax refund, I debate how we should use it. I don’t want to end up like the rich man who ignored Lazarus at his doorstep. At the same time, I am daunted by the projected price of college by the time my kids turn 18. When I do the calculations, my current savings for them are far from on track from reaching even 30% of the tuition sticker price. I have no doubt, praise God, that I will be able to send them to college somehow. But so many colleges have a poisonous culture these days that I want to be in a financially sound enough position that I can ensure they go to a college of our choosing, one where we know they will flourish spiritually as well as academically. How do I balance the future needs of my own children, with the much more urgent needs of the poor around us? How can I ensure I am being generous and trusting enough in God’s providence, without neglecting my responsibilities as a parent?

 

[pensmama87]

I think there is not a clear-cut answer to this question.

One piece of advice I heard for those who wish to increase charitable giving is to do so gradually. So, if you give around 5% now, maybe next year you could try 6%, and so on.

I do think retirement is significantly more important to fund than children’s education, so make sure you are contributing enough there first. I would think you could invest some of the money too which would hopefully give you a greater return than interest in a savings account. There are state tuition plans where you can put in at current tuition rates, and similar private plans as well.

Dave Ramsey’s Smart Money, Smart Kids is a very good book and it addresses saving for college - including how to maximize scholarship opportunities and teaching your children to work and save.

 

[jmjZelie]

I am especially interested in this question, too, because as our family continues to grow (we are expecting our sixth baby now) it becomes ever less likely that we will be able to “bring the full tithe” like it says on the offering envelopes, let alone contribute “enough” to charities.

 

[1ke]

I don’t know where the idea that you have to save money so that you can pay the full burden of your children’s college comes from. There are so many options, from dual credit while still in high school, to online schools, to scholarships, to work-study, to the military, to technical programs that are not 4 years, to any number of options that don’t involve you worrying unnecessarily about something 10+ years away. There could be significant structural changes in education by then.

 

[mommy_k]

Does anyone have any suggestions for how to properly balance one’s spending for the good of one’s family vs. the needs of charity? I know that 100% of the money I earn should be used to glorify God, but I am having trouble figuring out how to put that into practice. My husband and I do better financially than the average American family, which means we do better than the great majority of the rest of the world, and I feel the weight of the saying that “to whom much is given, much is expected.” We live frugally, shopping at second-hand and discount stores, in an effort to be good stewards of what we’ve received, and are constrained in that we have significant student loans to repay. Eventually, we would like to get to the point of donating 10% of our income to charity, though currently we give less than 5%. Whenever we find ourselves with some extra money, say, from our tax refund, I debate how we should use it. I don’t want to end up like the rich man who ignored Lazarus at his doorstep. At the same time, I am daunted by the projected price of college by the time my kids turn 18. When I do the calculations, my current savings for them are far from on track from reaching even 30% of the tuition sticker price. I have no doubt, praise God, that I will be able to send them to college somehow. But so many colleges have a poisonous culture these days that I want to be in a financially sound enough position that I can ensure they go to a college of our choosing, one where we know they will flourish spiritually as well as academically. How do I balance the future needs of my own children, with the much more urgent needs of the poor around us? How can I ensure I am being generous and trusting enough in God’s providence, without neglecting my responsibilities as a parent?

If you are saving to educate your children to become spiritually mature Catholic’s, then you are being good stewards of your money. Perhaps once or twice a year in addition to your weekly contributions to church, you can budget in and send a donation to a charity that helps the poor.
You can also add one or two additional items to your grocery cart and bring this to the food pantry, or buy some extra baby neccessities for a mother’s home. This type of donating is not felt as much on the budget or education savings.
This is what we do.

 

[Viki63]

One thing to consider is sending your children to a community college for the first two years, then they could transfer to a four year for the last two. Community colleges are much less expensive, and provide good education in the basics, and IMO focus more on education than politics or social stuff like four year universities,

A friend of mine has studied tithing extensively, and has come to believe that if we tithe, putting God first, that frees Him to use the other 90% of our income to help us achieve our (and His) goals for us. I’ve been doing it for awhile, kind of haphazardly, meaning I don’t tithe obsessively, but our finances have greatly improved since we started.

.

 

[Catholic1954]

Does anyone have any suggestions for how to properly balance one’s spending for the good of one’s family vs. the needs of charity? I know that 100% of the money I earn should be used to glorify God, but I am having trouble figuring out how to put that into practice. My husband and I do better financially than the average American family, which means we do better than the great majority of the rest of the world, and I feel the weight of the saying that “to whom much is given, much is expected.” We live frugally, shopping at second-hand and discount stores, in an effort to be good stewards of what we’ve received, and are constrained in that we have significant student loans to repay. Eventually, we would like to get to the point of donating 10% of our income to charity, though currently we give less than 5%. Whenever we find ourselves with some extra money, say, from our tax refund, I debate how we should use it. I don’t want to end up like the rich man who ignored Lazarus at his doorstep. At the same time, I am daunted by the projected price of college by the time my kids turn 18. When I do the calculations, my current savings for them are far from on track from reaching even 30% of the tuition sticker price. I have no doubt, praise God, that I will be able to send them to college somehow. But so many colleges have a poisonous culture these days that I want to be in a financially sound enough position that I can ensure they go to a college of our choosing, one where we know they will flourish spiritually as well as academically. How do I balance the future needs of my own children, with the much more urgent needs of the poor around us? How can I ensure I am being generous and trusting enough in God’s providence, without neglecting my responsibilities as a parent?

It sounds like your student loans are a financial burden to the family budget. It might be wiser, in the long run, to put the extra money in paying them off first and then redo the budget, splitting up the extra money between the college fund and charitable giving. When they are older, your children should contribute to their college funds; it will help make up for the deficiency, and they will appreciate their education more if they are made part of the process. :twocents:

 

[Xantippe]

I think there is not a clear-cut answer to this question.

One piece of advice I heard for those who wish to increase charitable giving is to do so gradually. So, if you give around 5% now, maybe next year you could try 6%, and so on.

I do think retirement is significantly more important to fund than children’s education, so make sure you are contributing enough there first. I would think you could invest some of the money too which would hopefully give you a greater return than interest in a savings account. There are state tuition plans where you can put in at current tuition rates, and similar private plans as well.

Dave Ramsey’s Smart Money, Smart Kids is a very good book and it addresses saving for college - including how to maximize scholarship opportunities and teaching your children to work and save.

Yes. And the OP’s student loans are also important.

Basically everything is important.



Not to give the OP a Dave Ramsey overload, but it could help a lot to read his Total Money Makeover and work through the steps one at a time. That’s the great virtue of DR–that there’s one thing to do at a time, so it doesn’t feel overwhelming. Here’s a quick overview of the Baby Steps:

daveramsey.com/baby-steps/?ectid=gaw.daveramsey-babysteps2

Saving for college starts after the family has paid off all non-mortgage debt (including student loans), saved a 3-6 month emergency fund and started retirement perking along.

That brief list doesn’t cover every eventuality, but it gives you the general idea. Also, insurance should be in place from the beginning. DR also encourages charitable giving along the way, but doesn’t insist upon it in particularly desperate situations. And of course, there is a tax offset from a lot of charitable giving…

More personally, we’re basically in the some position as the OP, with a few nuances. Namely, we paid off our non-mortgage debt some years ago, for a number of years we gave 10% of take home (but it’s probably down to 8% now, as we are prioritizing kid visits to very elderly great-grandparents), and we’re looking at a third kid starting private school in 1.5 years and a first child going to college in four years. I can hear the clock ticking right now. Long term, the outlook is very good, but we’re looking at some pain in the next 4-8 years because we’re trying to do a lot of different things at once. In the baby steps, we’re kinda sorta doing steps 4 and 5 at the same time, but aren’t really doing either at full throttle.

Our giving is set at the beginning of the month, we do any personal giving (for instance gifts to young families with new babies in our community) and then the rest goes to Caritas, our parishes, our kids’ school and other charities. When our kids are launched, we hope to eventually move closer to 20% giving.

A lot depends on individual circumstances.

 

[Xantippe]

Does anyone have any suggestions for how to properly balance one’s spending for the good of one’s family vs. the needs of charity? I know that 100% of the money I earn should be used to glorify God, but I am having trouble figuring out how to put that into practice. My husband and I do better financially than the average American family, which means we do better than the great majority of the rest of the world, and I feel the weight of the saying that “to whom much is given, much is expected.” We live frugally, shopping at second-hand and discount stores, in an effort to be good stewards of what we’ve received, and are constrained in that we have significant student loans to repay. Eventually, we would like to get to the point of donating 10% of our income to charity, though currently we give less than 5%. Whenever we find ourselves with some extra money, say, from our tax refund, I debate how we should use it. I don’t want to end up like the rich man who ignored Lazarus at his doorstep. At the same time, I am daunted by the projected price of college by the time my kids turn 18. When I do the calculations, my current savings for them are far from on track from reaching even 30% of the tuition sticker price. I have no doubt, praise God, that I will be able to send them to college somehow. But so many colleges have a poisonous culture these days that I want to be in a financially sound enough position that I can ensure they go to a college of our choosing, one where we know they will flourish spiritually as well as academically. How do I balance the future needs of my own children, with the much more urgent needs of the poor around us? How can I ensure I am being generous and trusting enough in God’s providence, without neglecting my responsibilities as a parent?

I feel like getting to 50% is doing pretty well.

 

[Xantippe]

I don’t know where the idea that you have to save money so that you can pay the full burden of your children’s college comes from. There are so many options, from dual credit while still in high school, to online schools, to scholarships, to work-study, to the military, to technical programs that are not 4 years, to any number of options that don’t involve you worrying unnecessarily about** something 10+ years away.** There could be significant structural changes in education by then.

Well, it does come on very fast when you’re trying to do other stuff at the same time.

 

[Maximilan_Kolbe]

From what I remember from DR’s books and reading Phil Lenahan’s (of Veritas Financial Ministries) budgeting books for Catholics, they tended to lump at least private Catholic/Christian education costs with charitable contributions in terms of a percentage of your budget, which they target at 10%.

This is not a hard and fast rule, but something we personally factor in. Of course, one may be able to curtail spending in other areas to still achieve their charitable funding goals, but I personally think authentic Catholic educations is vital for my children. For many folks, college is too far off to adequately take care of now, while tuition for K-12 is a present reality. I like the 529 plans for college, which with interest can really make a dent in college 18 years from now, but for parents who choose Catholic schools, there isn’t much one can do in terms of tax benefits. I personally put some education expenses for K-12 away in a relatively safe, low growth account to use time and interest to help it grow. Nothing is totally safe of course in this sort of scenario.

The bottom line is that we try to balance our charitable donations with our education costs, and the costs of the latter are extremely high, especially here in the mid-Atlantic, for three children (soon to be four).

The importance of being charitable with our blessings is vital, is a gift to God, to others, and a vital lesson to impart to our children. Likewise, determining the best environment to raise holy Catholic children (however each family decides to do that) is a mandate for parents, IMO. Again, how one chooses to do this is up to the parents, be it public education, private education, or homeschooling - all can be done to raise holy children. But the overall mandate to me is the same, regardless of the method.

 

[Xantippe]

From what I remember from DR’s books and reading Phil Lenahan’s (of Veritas Financial Ministries) budgeting books for Catholics, they tended to lump at least private Catholic/Christian education costs with charitable contributions in terms of a percentage of your budget, which they target at 10%.

This is not a hard and fast rule, but something we personally factor in. Of course, one may be able to curtail spending in other areas to still achieve their charitable funding goals, but I personally think authentic Catholic educations is vital for my children. For many folks, college is too far off to adequately take care of now, while tuition for K-12 is a present reality. I like the 529 plans for college, which with interest can really make a dent in college 18 years from now, but for parents who choose Catholic schools, there isn’t much one can do in terms of tax benefits. I personally put some education expenses for K-12 away in a relatively safe, low growth account to use time and interest to help it grow. Nothing is totally safe of course in this sort of scenario.

The bottom line is that we try to balance our charitable donations with our education costs, and the costs of the latter are extremely high, especially here in the mid-Atlantic, for three children (soon to be four).

The importance of being charitable with our blessings is vital, is a gift to God, to others, and a vital lesson to impart to our children. Likewise, determining the best environment to raise holy Catholic children (however each family decides to do that) is a mandate for parents, IMO. Again, how one chooses to do this is up to the parents, be it public education, private education, or homeschooling - all can be done to raise holy children. But the overall mandate to me is the same, regardless of the method.

DR doesn’t count private education as charity. He’s actually kind of anti-private school (at least financially speaking). And I kind of get that, because he does get a number of calls from people who can’t afford their kids’ private schools.

As I mentioned upthread, for quite a while, we used to give 10% of take home. But then my grandparents (age 90 and 94) started getting frail, so we have been prioritizing getting our bigger kids out to see them, so that they will have memories of their great-grandparents. I always feel that any visit could be our last and I wish we could go more.

Also, my sister has a son who is in high school, and she is starting to hear the clock ticking on her son’s time at home. She feels like there were so many things she’d hoped to do as a family with him before he leaves home, and there’s so little time left. My oldest is already an 8th grader, and I already feel the same way–it’s only going to get harder to pull together a family trip.

There are a lot of things to balance.

 

[1inICXC]

WoW, this really resonated with me as we are in a similar situation And share these concerns.

I don’t know if we’re doing enough and I know we can always be better stewards of our time, energy and money but here some of the decisions we made:

We shop at higher-end stores but ONLY during end-of-season sales when we can purchase stuff for next year at a 50,60,70% discount. If I need in-season items then only lower-end or second-hand stores.

We do not save up for college funds. Both DH and I put ourselves through college on our own. Our kids will do the same. It’ll be HARD work and they already know it. They’re all under 10 but we have already discussed tha in a couple of years they can start doing odd jobs for friends and family and they are excited about it. They will also have to study hard to qualify for scholarships. Or, they can always choose to skip college and simply join the work force early- OT start their own venture- to gain experience and move up the ladder while everyone else still has their head in the books. I’m completely open to either option.

We run a ministry with chastity and pro-life resources for youth which we have been funding from our own money for the past 7 years. We are at a point where growth is now necessary so we will probably start asking for donations as well.

We vacation in moderately priced destinations. We limit our eating out/ordering in to a couple of times/month

We don’t take our kids to lessons, we teach them the basic sports ourselves.

We own a second-hand minivan, we are renting a modest home.

I was raised in poverty so I’m definitely the one who likes to tighten belts and live below our means. I want our kids to not be materialistic so I try to not attach any importance to what we “want” . It has always been about what we “need” from day 1. When they were little and we’d go shopping I always had my list with me and they knew that anything that wasn’t on that list was not necessary so they learned very quickly not to ask for what they want. When it came to toys, I considered that whatever they got for their birthdays and Christmas was more than enough - my husband always finds “special occasions” to get them more however

Hope some of this is useful. Thanks again for this great question!

 

[Ridgerunner]

DR doesn’t count private education as charity. He’s actually kind of anti-private school (at least financially speaking). And I kind of get that, because he does get a number of calls from people who can’t afford their kids’ private schools.

There are a lot of things to balance.

This reminds me of an event many years ago. I scraped together money for an end-of-year donation to the parish. It was close to the end of the year, so I delivered it to the parish pastor personally. I apologized to him that it was so little.

Without looking at it, he said “but it isn’t ‘so little’. You are putting your kids through Catholic School, and there is no telling what benefit that will be to them or to the Church years from now. What you have given is all right.”

Made me feel better, but I never forgot it. Peoples’ situations vary. I wouldn’t give a nickel for some of what passes for “Catholic education” nowadays, though in some schools I certainly would. The children one presents to the world matters a lot, and what they are taught matters in their formation.

I look at my wife’s sister’s children. Not one is in the Church anymore. Not one. What was missing? I think I know some of it, but I’m sure I don’t know all of the reasons why that happened. I do think their schooling was part of it.

I don’t separate “charity” from “family”, mentally. I do contribute to my two parishes and to other charities, but it’s not 10%, and that’s for sure. But what is “income”? Is it gross, is it net? And what is “net”? And what is “charity”?

For some people, it’s easy to know what “net” is. It’s right on their paycheck. For me, it’s not, since more of my income comes from investments than from work. But my major investment IS my work, because I’m self-employed. So what’s “net income” to me?

I once donated some sum I don’t now remember to build a concrete block house for a family in Haiti under some Church project or other. Is it less charitable to give my daughter a sum of money for a down payment on a house for her, just because she’s my daughter?

If she wrecks her car, can’t afford another one, and has to drive in order to work, is it less charitable to give her at least a down payment than buying chickens for a family in Santo Domingo so they can have a source of income?

I admire those people who have stable incomes and few demands on it, and who live modestly in order to be generous. I do. But I think sometimes there is a hazard of our being uncharitable toward people we know in order to be charitable to those we don’t know.

 

[Burt_Macklin]

As I mentioned upthread, for quite a while, we used to give 10% of take home.

I always wonder what people are calculating 10% giving on as most of the time they don’t specify. 10% of take home wouldn’t be so bad. Say if you earn 100k a year I figure your take home pay would be probably be around 63k after all deductions. So about 525 a month to charity.

 

[Xantippe]

WoW, this really resonated with me as we are in a similar situation And share these concerns.

I don’t know if we’re doing enough and I know we can always be better stewards of our time, energy and money but here some of the decisions we made:

We shop at higher-end stores but ONLY during end-of-season sales when we can purchase stuff for next year at a 50,60,70% discount. If I need in-season items then only lower-end or second-hand stores.

We do not save up for college funds. Both DH and I put ourselves through college on our own. Our kids will do the same. It’ll be HARD work and they already know it. They’re all under 10 but we have already discussed tha in a couple of years they can start doing odd jobs for friends and family and they are excited about it. They will also have to study hard to qualify for scholarships. Or, they can always choose to skip college and simply join the work force early- OT start their own venture- to gain experience and move up the ladder while everyone else still has their head in the books. I’m completely open to either option.

We run a ministry with chastity and pro-life resources for youth which we have been funding from our own money for the past 7 years. We are at a point where growth is now necessary so we will probably start asking for donations as well.

We vacation in moderately priced destinations. We limit our eating out/ordering in to a couple of times/month

We don’t take our kids to lessons, we teach them the basic sports ourselves.

We own a second-hand minivan, we are renting a modest home.

I was raised in poverty so I’m definitely the one who likes to tighten belts and live below our means. I want our kids to not be materialistic so I try to not attach any importance to what we “want” . It has always been about what we “need” from day 1. When they were little and we’d go shopping I always had my list with me and they knew that anything that wasn’t on that list was not necessary so they learned very quickly not to ask for what they want. When it came to toys, I considered that whatever they got for their birthdays and Christmas was more than enough - my husband always finds “special occasions” to get them more however

Hope some of this is useful. Thanks again for this great question!

If you have a higher income, your kids are going to get penalized heavily for the fact that you don’t help with college. Their financial aid will be calculated based on your income.

(Of course, disregard if your income is moderate.)

 

[Burt_Macklin]

If you have a higher income, your kids are going to get penalized heavily for the fact that you don’t help with college. Their financial aid will be calculated based on your income.

(Of course, disregard if your income is moderate.)

Assets and savings are penalized much more than income. So kids from high income families might be penalized but not nearly as much as kids with a bunch in savings.

On one hand it makes logical sense. Why should anyone help you pay for college if you have the money to do it yourself? But on the other hand what is the point of being an ant if the grasshopper is the one who reaps the benefits? If you’re saving for college education you might be better off putting those savings into a retirement account or paying off the equity in your house.

 

[Xantippe]

Assets and savings are penalized much more than income. So kids from high income families might be penalized but not nearly as much as kids with a bunch in savings.

On one hand it makes logical sense. Why should anyone help you pay for college if you have the money to do it yourself? But on the other hand what is the point of being an ant if the grasshopper is the one who reaps the benefits? If you’re saving for college education you might be better off putting those savings into a retirement account or paying off the equity in your house.

There is that.

And, in fact, the standard advice is to prioritize retirement over kids’ college savings.

 

[1inICXC]

If you have a higher income, your kids are going to get penalized heavily for the fact that you don’t help with college. Their financial aid will be calculated based on your income.

(Of course, disregard if your income is moderate.)

We don’t know what our income will be in 10 years from now but I would encourage them to pursue scholarships based on academic merit. At the rate things are going I wonder if colleges will even still be relevant in 10 years from now. There’s so much you can learn on your own these days.

 

[Xantippe]

We don’t know what our income will be in 10 years from now but I would encourage them to pursue scholarships based on academic merit. At the rate things are going I wonder if colleges will even still be relevant in 10 years from now. There’s so much you can learn on your own these days.

That reminds me. When I was a kid, growing up in the Assemblies of God, our pastor told us the world was probably going to end within the next 20 years.

That was 25-30 years ago, and as it happened, the world did not end.

Whatever happens with education, the way things have been trending the last 10-20 years, parents have to expect that it will probably take considerably longer than they expect to get their nestlings fully fledged and out of the nest. Look around at the parents of young adults you know and consider how many of them have 24-30 year olds who live at home and/or are on the family dole. During the housing bust, for instance, my aunt and uncle found themselves supporting a 30ish married son with both a master’s degree in architecture and a master’s in structural engineering who had just bought a house before the bust. He eventually got on his feet and seems to be doing well now, but the family dole era dragged on for about two years as I recall. You can look around and see similar things happening with many other parents of young adults.

So, I would discourage parents from believe that tra la la they can just do nothing and expect to have a self-supporting adult as soon as their child turns 18. College or no college, it may be a long road until they have a financially independent adult, so plan accordingly.