Retirement planning advice often recommends saving as much as possible, including maxing out 401Ks. But we turn into rich fools when we aimlessly accumulate more wealth without a plan or purpose. Like other financial goals, we should approach retirement intentionally with a specific goal in mind. That should include a financial finish line that guides contributions.
To celebrate the first anniversary of my journey of generosity, let’s play a personal finance game. I call it “Financial Independence vs. Radical Generosity.” In this article, I’ll weigh the costs and benefits of a $10,000 charitable donation against the impact the same dollar amount would have had on my personal finances. Through this exercise, I show that it’s possible to make room in your budget for generosity and not worry about your financial future.
My son came home from school with an urgent request: We must go to Toys R Us now before the store closes. He doesn’t understand why the retailer is going out of business — only that the toys will soon disappear. My son’s plea taught me about the psychology of spending: Sometimes we make financial decisions that lack rationale, but they make perfect sense in the moment. It’s only when we question our own motivations that we make better money moves.
Radical generosity is a journey that starts with small steps, and I don’t want to ever make it feel impossible. It’s an attainable personal finance goal, regardless of income, but it requires vision and an intentional approach to budgeting that creates room for increasing levels of giving over time. Here’s how you can make room for charitable giving in your budget and climb the ladder of generosity.
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