“3 Weeks of Thankfulness – Week 2″

We are in week 2 of our 3-week series on Thankfulness as we lead into the Thanksgiving holiday.  If you recall in Week 1 we focused on how thankfulness can produce patience, which is a great trait when it comes to our personal finances.  This week we will be diving into how thankfulness promotes feelings of generosity, which in turn can lead to better finances.  Ultimately, being thankful (grateful) for what we have and understanding how lucky we are is a step in the right direction to leading a healthier life.

Generosity Forces an Evaluation

Making generosity a priority in your financial plan usually involves giving of your time and resources to causes that you care about.  Usually this involves some sort of charitable giving, and these decisions force us to re-evaluate and adjust our spending accordingly.  Knowing a charitable donation is a priority can help clients be motivated to track their spending and reduce their expenses so that money is available for these donations.  However, if you find that money is consistently running short when you’re ready to be generous, it can also force you to re-evaluate your budget to be more in line with your values. Additionally, we find that when our clients having a “giving” mindset, it tends to spur them on to be disciplined and motivated in other areas of their life.

Generosity can help your Tax Situation

Although the recent increase in the standard tax deduction ($24,400 for married filing jointly in 2019) has meant that a lot of previously itemized charitable donations aren’t as valuable come tax time, there are still benefits from a tax perspective.  For individuals who must take required minimum distributions (RMD’s) from a qualified retirement account, making a qualified charitable distribution (QCD) can be a good way of avoiding income tax on these withdrawals and will ultimately lead to a lower taxable income.  Making a charitable contribution from a non-qualified account can also be a good way of donating highly appreciated assets which would normally be subject to capital gains taxes when you sell.

Generosity reduces our attachment to money

If you are only ever focused on earning money and then holding onto it for dear life, it can become crippling.  While it might not always come down to a math exercise (like the tax benefits), giving can be healthy for the heart.  By deciding to donate a portion of your money to charitable causes you can release the grip that money can sometimes have over your life.  Money is a great thing, but we want you to control your money rather than have your money control you!

We want to encourage you to think about ways to be generous as we enter this holiday season.  Not only will it be good for your heart, but it can also be good for your wallet.

November 22, 2019