This guest blog was written by Chris Budd who wrote the original Financial Wellbeing Book, and also the Four Cornerstones of Financial Wellbeing. He has written more than 115 episodes of the Financial Wellbeing Podcast and founded the Institute for Financial Wellbeing.
Financial wellbeing is about having a financial plan that will make you happier, not just wealthier.
For this to be achieved, the plan should take into account all aspects of the sources of wellbeing in our lives. Some of those sources are common to all of us; some will be unique to each individual.
One of the most significant sources of wellbeing is kindness. In financial terms, this could take many forms. One of them is how we give.
What is philanthropy?
The technical term for the giving of money is “philanthropy”. This can conjure images of billionaires setting up foundations. But philanthropy can be just a £10 per month donation to the Red Cross, taking old clothes to the charity shop, or donating time to help local community causes.
Each of these can be a great opportunity to increase your wellbeing.
Adding philanthropy to the agenda
The British approach to discussing philanthropy tends to be rather bashful. We don’t really like people who are deemed to be “flashy” with their money, and discussing one’s own giving plans can feel a little boastful.
As a result, clients might not mention it to their financial advisers, and financial advisers may not mention it either.
Why not solve this by asking your financial adviser to add it to the agenda of your next meeting?
A philanthropy plan
To make sure your philanthropy has the maximum impact on your wellbeing, it is important to have a plan. This applies to the giving of time as well as money (a friend of mine, aged in his late 50s, was reducing his hours to a three-day week, and chose to spend his working week three days in a salaried role, one day working in his community, and one day working for a charity).
To create a philanthropy plan that maximises wellbeing, there are three golden rules:
1. Plan how you will spend your money and your time
Well-thought-out and planned giving is likely to bring you joy, whereas giving by reaction is more likely to be caused by feelings of guilt.
Build your giving into your financial plan. Perhaps make a regular donation; many charities will offer member benefits. If you have a lump sum you wish to donate, you could ask your financial adviser how much you could afford to give.
2. Research your giving
Give to something that aligns with your interests, values, and beliefs. This is why people run marathons to raise money for charities that have helped their loved ones.
It might be worth taking time to list your values and then seek causes that align with them. Remember, this relates to how you spend your time, as well as your money.
3. Understand the impact your giving will have
For example, if giving to a charity, understand the outcomes of that charity. Who will your donation be helping, and how?
This is why the bigger charities who advertise include pictures of those who will be helped. They know that donating is more joyful – and so more likely to happen – when the person who is giving can connect with how their money will be used.
Giving can be joyful
Giving can be a joyful thing. Adding philanthropy as an item on the agenda when meeting with a financial adviser can lead to more meaningful uses of your money, which will increase your financial wellbeing.
In the words of Archbishop Desmond Tutu: “Joy is your reward for the giving of joy”.
Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.
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