The movies have given us a lot of catch phrases about making money -- "greed is good" and "show me the money" come to mind. Now, try to think of one about being charitable with your cash. For whatever reason, giving money away just doesn't appeal to many screenwriters. If it does appeal to you in real life, the 10 percent rule is one way to manage your generosity. Ten percent is a common starting point since it is the amount traditionally associated with tithing in religious settings.
Multiply your monthly income by 0.9. This isn't just to test your dusty math skills, but to determine just how much you can live with minus the 10 percent. Unlike a tax situation, it's up to you to decide if the donation comes from your gross or net income. You'll also have to have a talk with your partner, especially if you have a joint account. Is the 10 percent coming out of just your income or his too?
Enter the amount remaining after you give 10 percent as your monthly income in a spreadsheet.
Work out your budget on the remaining 90 percent of your income. Enter necessary costs such as rent, utilities, transportation, debt payments, insurance and groceries first. Allocate remaining money in categories of discretionary spending, such as purchasing clothes, eating out or taking vacations.
Research each charity you plan to give to with a resource such as Charity Navigator. Potential charities include those that provide food, health care, education, religious services and local assistance. With each one, check what percentage of your contribution goes toward overhead costs, how much the leaders of the charity are paid, and whether the organization is financially transparent overall. In addition, confirm that the organization has tax-exempt status since charitable giving can be to your advantage come tax time. Ask the organization itself, and check its facts through the Internal Revenue Service website.
Give the gift right after you get your paycheck. You can also set up automatic contributions with many organizations, such as The Salvation Army, American Cancer Society and Feed My Starving Children.
- Save the receipts from your charitable donations if you would like to use them for a tax deduction. Charitable contributions are only accepted on itemized returns, and there are strict rules about receipts for verification depending on the value of the gift.
- How to Get My Tax Return Close to Zero
- Child Support on Tax Returns
- Kentucky State Tax Refund Information
- About Married/Filing Jointly Income Tax Returns
- FAQs About Tax Returns
- Can You Claim Mileage on Your Tax Return if Your Job Pays for Mileage?
- Can Anyone Prepare a Tax Return for Someone Else?
- What Is a Schedule C Tax Return?
- Can a Husband & Wife Filing a Joint Tax Return Both Contribute to a Roth IRA?
- How to Amend a Kentucky Tax Return