Living on Credit ... and ... Making Charitable Donations

[Angela Shelley]

While surfing the internet on the topic of "financial freedom", I found that most of the personal finance experts offer the following advice:

"Pay a certain percentage of your income to charity"

I imagine that the readers of self-help, how-to-get-rich books are those who are looking for solutions while living on credit. I disagree with the advice about making charitable donations as long as there are bills to be paid.

My question:

What would happen if everyone in the US who was living on credit would STOP making charitable donations and use the money to pay off their own bills?

[supernova]

1. Because it's a tax deduction

if you itemize, you can deduct charitable contributions. I suspect that's why most money gurus pitch it.

Wether it's worth it for everyone to do that though, is an individual thing. You'd have to do the math or let an accountant do it for you.

On an ethical level, it's certainly good to donate some money (not more than you can reasonably afford, obviously) to a charity that you agree with.

edit: I heartily support going debt free as much as it's possible. And there are plenty of other things you can do before giving up a charity donation to a cause you support. Eat out less. Don't get cable, do your own hair, lower the thermostat, etc.

[unpossibles]

2. I will probably get flamed for this, but

while I fully respect devoting time, money, and/or energy to charity and do it myself, I've also noticed that "charity" has become an excuse of right winger to feel better about supporting programs which hurt the non-rich. In other words, it's easier to complain about welfare and socialism when you can say, "see? I gave my money to the poor by choice!" or whatever. Much like with unplanned pregnancies, I'd rather try to reduce or even prevent poverty than to slap a bandaid on it.

As for your OP, I agree that it doesn't make financial sense if you're paying more in interest than you're saving in tax write-offs, but charity is not just about saving money. Or shouldn't be anyway. Do the books say to do this while poor or after getting rich with their scheme (said with a trace of irony - it seems the most successful get rich scheme is to sell books about how to get rich)?

[Naturyl]

3. You won't get flamed by me.

I think you're absolutely right. Poverty and other systemic social issues are best addressed by government rather than by private charity. I don't see why you'd get flamed for saying so on a Democratic message board, especially when we should have learned this lesson long ago from FDR.

[Angela Shelley]

5. Yes, they say to incorporate charity into the payment plan

from the very beginning.

Even if you can deduct the donation from taxable income, if you are making the donation with borrowed money, then you are actually harming yourself (which also isn´t what charity is about).

I agree, alot of people use the word "charity" to pep up their image, but they don´t want affordable health care programs for their fellow citizens.

[terisan]

6. If you are going without basics or borrowing to live, donate time or skills.

Charity doesn't just mean official tax-deductible giving.

Too many official charity have huge fundraising costs.

[Cleita]

4. I find charity a RW concept anyway.

Charity doesn't help everyone who needs it and cherry picks recipients. Pooling resources and setting up social programs for everyone would eliminate the need for charity in the case of dire needs. The rich who can afford to help out would be taxed to pay for the programs aiding the needy. This way no one who can't really afford to help someone worse off than them would be under pressure to do so.

[dysfunctional press]

7. i don't live on credit, but i don't give much to charity.

except time and effort when i can.

i can't spare the cash, because i'm on total lifetime disability, due to the adult onset of an undiagnosed spinal condition. when i became 'officially' disabled, i found that a long past employer had taken fica deductions from my check, but never actually forwarded the money to the government, so the ssa couldn't give me credit for those payments. since i was fairly young when i became disabled, 38, my wage-earning years were cut drastically short, so my disability payments are already lower than they would be if i would have worked a normal lifetime- and because of that, the missing fica payments amounted to 12% of what would/should have been my total, so my monthly check is that much lower yet again. i consider that missing money to be my monthly donation to charity...it's just too bad i can't claim it as such on my taxes.

[kaybea]

8. It's code for tithing . . .

Some of the frugality and simple living websites I frequent are populated by fundie mothers who are looking to stretch a buck so that they can stay home and indoctrinate (sorry, "home school")the next generation of Christian soldiers.

These women will admit to being financially strapped but when they publish their budgets and monthly incomes, the first thing off the top, non-negotiable, is the tithe of their gross income. In some cases this is a figure greater than their rent or other major life expenditure. Church is the most important thing to them. Oddly enough, the aspect of charity in their tithing is hardly mentioned, but upkeep of the building, and the minister's salary figure prominently in their justifications. Right-wing "charity" circle-jerk, like so many of them are.

[Angela Shelley]

9. This is also a political topic,

for example, because Mittens pays into such a plan, without asking where the money is going to, and he calls himself a good businessman.

He advocates social structures which ask their members to pay into the system, even if they need the money to take care of themselves or their families.

What do you think, should we start our own religion?

[wuushew]

10. The power of compounding interest is awesome

Certainly more than most people would ever pay in taxes.