In Debt, You Should Stop Donating

It’s a great feeling to give money to charity but sometimes it may not be the responsible thing to do. When I first took responsibility for my debt and realized that my belt needed some serious tightening, figuratively of course, I started working hard to plug all the leaks in my finances.  One area that got hit hard was charity.

I’m not religious but I love the idea of Tithing as it’s known in Judaism and Christianity; in Islam Zakaah is a similar concept.  I think it’s a noble thing to give over a portion of your personal earnings / wealth to charitable causes and it is something we should all strive for.

Giving to those who are less fortunate is more than a self-gratifying action, it’s something that really does keep millions and millions of people in this world alive or at least leading a better life.  Charity provides services and needs for so many people that an immediate stop would probably make the earth spin off into the universe!

However when in debt there is a good case for stopping ALL giving money to charity, that even means not putting a quarter in the Salvation Army bucket at Christmas.

When you are in debt you are burdening yourself and others.  Letting money out will only lengthen your stay in debt hell; you are more of a burden on society in debt than out of debt, or at least the society I would like to see.

If one-by-one we can climb out of debt and get ourselves into a position where we can help others, then gradually we should be able to form a system where all of those around us pull out of debt too.  A positive start is to stop being charitable in the traditional sense!

If you are in debt just take a look over the last year and try to figure out how much you have given to charity.  You may have been slipping change into the box at the local store everyday or have more substantial donations setup via monthly direct debit.

If you are a giving person you may be surprised how much cash you let out.  Plug that hole, get yourself out of debt and then think about how you can give back.

You feel bad about stopping cash donations?

Money isn’t everything; if stopping your monthly donations makes you upset then you can replace it in other ways.  Giving away your old stuff to thrift stores and GoodWill is one way, and volunteering is another.  You could volunteer to be a big sister / brother, distribute charity leaflets or even work in a thrift store for a little time each month.  There are ways to help without spending.

Concentrating on getting out of debt is a charitable thing to do.

What do you think?

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  1. Andy R on January 4, 2012 at 1:29 am

    Hmmm…if you are in debt, should you stop paying taxes until your debt is clear? No? Why not? Because it is an obligation.

    Most people give to their church because they view it as an obligation – a first claim on their income.

    Taxes are a legal obligation and, for most people, a grudging necessity. “Giving to God” is a moral obligation and a joyful privilege.

    This ought to get some good chat going both ways.

    • Forest on January 4, 2012 at 11:00 am

      Hey Andy, does the giving have to be monetary though? What if you can give your time until you get out of debt?

      • Andy R on January 4, 2012 at 2:58 pm

        @Forest – Yes, the giving involves $$ and here is why:

        1) At least from a Christian perspective, giving is the first claim on your income. It is only then that the rest of the budgeting process starts.

        2) Many of the arguments that put “me first” like “me getting out of debt” and “me happy makes others happy” are the skin of a reason stuffed with the crumpled newspapers of selfishness. I know that won’t make some happy, but there you have it.

        3) Volunteering time to charity is good and surely desperately needed. But if you needed to go on a diet would you stop all eating and just exercise instead? What I mean is that charitable giving ought to be an essential of good budgeting so don’t give up the best thing (charity) in order to accomplish a good thing (debt reduction).

        • Forest on January 4, 2012 at 3:02 pm

          Thanks for your views on the Christian aspect Andy. I still don’t think getting yourself out of debt so you are in a better position to help is wrong at all but i’m not following Christian rules myself. I do myself give and try to help, not in the slightest telling anyone to be uncharitable.

          For me I feel like every extra cent of interest paid to the banks / lenders is an extra cent of money that in the future could go towards people who really need it. For this alone I think it’s worth tackling those debts first.

  2. John Hunter on January 4, 2012 at 2:55 am

    I disagree but it is something people in too much debt should consider. I now only have debt for my mortgage (I certainly wouldn’t suggest no charity with a mortgage). But I have also had debt for a car in the past. It was simple to cover with my income, I see no reason to avoid charity with sensible debt you can cover with your income.

    Certainly giving your time is often even more valuable than your money. I would see it as perfectly fine to chose to give your time due to your finances.

    I think, we in the rich world (USA, Europe, Japan…) seem to think we have it hard. We don’t. I am skeptical of attempts to retain privilege and not help those less fortunate. For that reason I wouldn’t suggest stopping gifts to charity until finances were seriously messed up (much worse than a bit of manageable debt).

    • Forest on January 4, 2012 at 11:01 am

      I agree John, I lived in Egypt for two years and saw the whole start of the ongoing revolution. USA, Europe, Japan, we do have it comparatively easy… That isn’t to say we should all sit down and shut up though, there is always something worth fighting for, always something that could be better.

  3. Beth on January 4, 2012 at 8:27 am

    I agree with John — if you can’t donate money, find a way to donate your time. I think it’s important for all of us to find a way to contribute to our communities and help those less fortunate.

    I find Zakah a really interesting approach because you aren’t give a % of your income, you’re giving a % of your accumulated wealth (I think basic housing and transportation doesn’t count) It’s very different to have a budget where money you don’t really see goes off to church/charity rather than looking at the total of your investments, savings and goods (like jewelery) and giving a portion of that.

    • Forest on January 5, 2012 at 3:16 pm

      Hey Beth, I totally agree, your personal time is as valuable as money. Zakahh is very interesting.

  4. Emily Hunter on January 4, 2012 at 8:51 am

    I think that giving money is a sort of lazy way out of charity, anyway. I think that I’m the personal debt queen and I don’t give to charity because I believe that a strong foundation will help me help others. What I do to make up for that is to give my time to people within my circle who need it. I figure, if they’re happy, I get happier. 🙂

    • Forest on January 4, 2012 at 11:03 am

      Well it depends what you do with your time. If you work hard then theoretically giving money is like giving part of your time…. In some cases it can be lazy and something people do because they feel obliged, not because they care.

  5. Ortavia on January 4, 2012 at 9:39 am

    You can’t reap what you don’t sow. Tithes, offerings, and charity are much more than just an idea, it is a law by which this world is governed by; not man’s world and law, but God’s. You get what you give; cause and effect; actions produce consequences, etc.

    [Remember] this: he who sows sparingly and grudgingly will also reap sparingly and grudgingly, and he who sows generously [that blessings may come to someone] will also reap generously and with blessings.
    2 Corinthians 9: 6

    “Concentrating on getting out of debt is a charitable thing to do”- tell that to your neighbor who comes by needing $5 dollars to make up the difference to pay their light bill. What do you say? “No, but how about I go volunteer at Goodwill to show my charity to you instead.”

    I have a bias opinion because I decided to stop listening to man’s way of doing things; deciding to tithe, give, save, and spend some on myself, and still managed to pay off 2 credit cards totaling roughly $5,000, a dell account 2,900, at student loan at 1,600 amongst other bills, within a year, half of that time being only part-time making $430 every two weeks. So, I don’t know what this person is talking about. 🙂

    • Forest on January 4, 2012 at 11:05 am

      Hey Ortavia, in moments of desperation if you have the means to help then of course it is absolutely the right thing to do. I don’t however think a church or anywhere could begrudge you for not giving when you, yourself are in need of getting out of debt, especially if you volunteer time and help in exchange until you are back on your feet…. Definitely a question to ask a minister and I wouldn’t be surprised if they agreed with me.

  6. W-at-Off-Road-Finance on January 4, 2012 at 9:58 am

    I think some charity is worthwhile even in debt. Not because it makes monetary sense (it doesn’t – charity never makes monetary sense) but because it makes spiritual sense. Charity is a habit – if you don’t do it when (relatively) poor, you likely won’t do it when rich either.

    I would cut the last of charity only if it were absolutely required to get a positive cash-flow budget. Then you ARE a charity case…

    • Forest on January 4, 2012 at 11:06 am

      Hey W, that is part of the point, you need to get out of debt to eliminate the possibility of becoming a person in need. When you are in debt you are in need of help but you could be in a position to help yourself. You can still give to charity with your time.

  7. Ian Brennan on January 4, 2012 at 10:40 am

    My experience tells me it is not how much we give, but how lovingly we give. Love given, unconditionally, always returns many times over, and in many, many forms. Want help with that debt? Try showing love for another, especially when there is no expectation of reciprocation.

    • Forest on January 4, 2012 at 11:07 am

      Absolutely Ian, you have to be genuine with every cent or second you give. It should never be begrudgingly done because you feel it’s an obligation.

  8. Jean on January 5, 2012 at 1:30 am

    It’s a good point about burdening yourself and others by increasing your debt in charity when you are strapped for funds. I also agree about needing to be a one hundred percent genuine with your charity and not for satisfying any other reason such as creating goodwill or a tax return, etc.


  9. Ellen on January 5, 2012 at 9:00 am

    Great post. I completely agree with it, and like that you came up with alternate ideas for donating time/goods you no longer need instead of money.
    I seem to remember that Dave Ramsey posted he still tithed when he was in debt, and I took issue with that. You are welcome to tithe if you want, but not with other people’s money – which is what you’re doing if you’re in debt.

    • Forest on January 5, 2012 at 9:08 am

      Hey Ellen, that is a fantastic point that I could have done with highlighting. When you are in debt you simply don’t have any money, it’s all someone elses!

    • Beth on January 5, 2012 at 5:46 pm

      Interesting point… But doesn’t that depend on the debt? I continued to give when I had student debt, and I plan to continue when I take on a mortgage. So I shouldn’t be doing that because it’s the bank’s money?

      This part of the argument isn’t making much sense to me. I don’t agree with putting off helping people who are in need today if I’m able to do so.

      • Forest on January 6, 2012 at 7:17 am

        Well what you define as debt as such needs to be your personal choice I guess. The post provides a concept and an idea that you can take at any angle you want.

        Personally, after the mess I got into, I have decided not to take debt in any form on again. If I buy another house I am going to save up and buy cash.

        • Beth on January 6, 2012 at 4:56 pm

          The only debt I’d consider taking on is a mortgage. Even a one bedroom condo goes for more than $150K were I live (and that’s cheap compared to surrounding areas.) I can’t imagine being able to pay cash for a home even if I gave up donating and saving for retirement!

          If anyone has any suggestions, I’m all ears 🙂

  10. Louise Armstrong on January 5, 2012 at 3:14 pm

    Hmm,I’ve often wondered this myself and the answer for my husband and I has been to continue to give no matter what our financial situation. I think it depends on the nature of your debt. If you’ve put your life on hold while you struggle to pull yourself out of crushing credit card debt, it might be wise to stop charitable giving for a while. On the other hand, if you’re entrepreneurial, like us, you tend to be in debt from time to time as a matter of course, and don’t necessarily see it as a negative thing. To me, charity is not always formalized and includes giving cash to homeless people and paying for swimming lessons for kids of a less-fortunate family. Volunteering on a local level is just as good as giving money but when it comes to humanitarian crises caused by famine or natural disasters, money is the only thing that will help.

    • Forest on January 5, 2012 at 3:18 pm

      Hey Louise, I agree there are some times when giving what you can over-rides all. If it is a local disaster you can give your volunteer time, if distant sometimes money is all you can do…. But you could take creative routes like collecting donations for a charity from local business or organising a charity drive if you really don’t have the cash.

      Entrepreneurial debt would be kind of business debt as such and many treat that differently.

  11. Louise Armstrong on January 5, 2012 at 3:27 pm

    Forest, you can also sometimes volunteer time in order to raise money. For example, I am on the fundraising committee for my kids’ school. We’re not writing cheques to the school but we create events that enable people to spend money, 100 % of which goes to fund school programs.

    On this issue of donating cash, it’s a cliche but my mom always said money is “made round to go round” and I can honestly say that it has been my experience that the more I share with others, the more comes to me.

    • Forest on January 5, 2012 at 4:13 pm

      I do agree Louise, you gotta be donating your cash though! As another commenter pointed out when you are in debt you are not giving your own money to charity! Lets all get clean of debt then we can help the less fortunate much more effectively 🙂

  12. Juan on January 6, 2012 at 8:17 am

    This is a hard question to answer. I would have to argue that if the debt load is overbearing, then yes it would be best to not donate. Though if the debt load is not overbearing then I think it could be a good idea to continue donating.

  13. Edward on January 6, 2012 at 10:58 am

    I’d like to know at what point charity became so entangled into the personal finance sites and blogs. Some of the “get out of debt” blogs I’ve read insist that folks should be forking over 10-20% of their pay to charity. …20%?!! Are you crazy? Screw that! Nobody has an “obligation” to give to charity–absolutely none whatsoever. …None! (You hear me, Andy R?)

    That said, I do give. How much, how frequently is nobody’s business but my own.

    I think this is a great article and a good reality check, Forest.

  14. Forest on January 6, 2012 at 11:17 am

    Ha ha ha, thanks Edward. I agree it isn’t an obligation, it is something you should do from your heart if you really care about something.

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