Is your giving enslaved to your spending?
If I asked you what percentage of your income that you give, and what percentage of your income that you want to give, would that number be different?
Why?
After helping hundreds of people with their giving, one thing has become incredibly clear of the average American: Giving is an afterthought of our financial strategy.
Most peoples’ giving is completely dependent not on their income, as you might think, but actually on their spending. I’ve heard almost every reason not to give:
“Bad timing… I just bought a car. It’s nice though!”
“Once we’re done with this kitchen remodel.”
“We have two kids in college. Two!”
“We have a big Europe trip coming up in June.”
The thing is, all of these people wanted giving to be a bigger part of their lives. They want to have an impact on the world, to make a difference with their lives and to leave a lasting legacy through their giving, but they feel stuck. And to be honest, they are stuck. As long as the greatest priority in their lives [making a difference] is an afterthought in their budget [giving], they won’t be able make a global impact or leave a lasting philanthropic legacy. Their global impact is enslaved to their spending habits. “Help some random person in extreme poverty gain access to clean water, or spend a fun weekend in Austin? Hm…”
If that’s you, I want to help. Because guess what:
Your giving can be independent of your spending.
Some of your friends have already figured this out. They give like crazy to the causes they love, all the while maxing out their 401(k) and going to Europe several times a year. No, they aren’t making significantly more than you, from my experience. They just do one little thing that helps their impact be independent from their spending.
You too can make an incredible impact with your life and still spend money. You can help someone in extreme poverty gain access to clean water and still go on that weekend trip to Austin.
How? I’ll show you.
To help you, I created a very simple, yet very helpful, financially strategy. This strategy will not only help you give more and make a greater impact with your life, but it will help you with all of your finances, including your saving, investing and spending. It will free your impact from the bondage of your spending.
This strategy has not only helped Claire and I give more towards what we are passionate about, but it has made giving significantly more fun! As average millennials, this financial framework has transformed our home’s giving from a guilty, stingy [and frankly pathetic] afterthought, into a joyful, generous and fun plan.
I call it the ‘IGSIS’ financial strategy.
‘IGSIS” is an acronym that stands for Income, Give, Save, Invest and Spend, in that order. You start by writing out [or typing in Excel, if you’re an Excel junky like me] the words Income, Give, Save, Invest and Spend, vertically in that order from top to bottom. Then to the right of the words Give, Save and Invest, you write out the minimum percentage of your income that you want to go to each, in that order of priority, starting with giving. Whatever percentage is left after you Give, Save and Invest, you can Spend. It’s that simple.
So, for easy math, let’s say your household earns a take-home income of $100,000 per year and you set a minimum of 10% that you want to give, 10% that you want to save, and 10% that you want to invest. That leaves you $70,000 you can spend, and now you have at least $10,000 to give and you just increased your savings by $10,000 and invested $10,000! Pretty cool, right?
Your ‘IGSIS’ financial strategy would look something like this:
And you can play with these numbers for whatever is right for you. If you don’t need $70,000 to live on and you want to give more towards the causes and people you love, you can increase how much you give.
Let’s say that next year you get a raise and your household earns $120,000 in income [Congrats!] and you want to give more towards what you love. You could increase your giving by fifty percent (from 10% to 15%, from $10,000 to $18,000) and increase how much you save and invest by twenty percent (from 10% to 12% each, from $12,000 to $14,400 each) and still have more money to spend than you did last year.
Wait… what.
That’s right. You could almost double the amount that you give, increase how much you save and invest, and still be able to add a $3,200 vacation to your budget. Bon voyage!
It would look something like this:
Some people set what is called a ‘financial finish line’ on their spending and give the rest away. As their income goes up, they keep their lifestyle and spending budget the same. This enables them to give more towards what they love. For example, if your income went up 20% over two years [Seriously, you’re crushing it in this hypothetical example, great job!], you could increase your giving by 200%.
200%! In two years!
If this interests you, you can learn more about this method from my friends Cody and Kealan at The Finish Line Pledge.
So that’s the ‘IGSIS’ financial strategy than can help you give more towards what you love and free your impact from the bondage of your spending.
Want to give well? We’ll help you.
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Author: Lane Kipp, ThM
Lane is the founder of All Access, a non-profit organization dedicated to helping end spiritual and physical poverty by helping you give effectively. Lane is a graduate of Dallas Theological Seminary with a Master of Theology (ThM) degree and a graduate of Texas A&M University with a B.S. in Ocean Engineering. Lane and his family live between Dallas and Fort Worth.
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