This Week In Your Wallet: November 29, 2011
As I write this to you on Cyber Monday, my email inbox is getting bombarded with offer after offer, deal after deal. But as much as I love some of the goodies I’m seeing — Gilt Groupe put up new deals every three hours today, everything at the Loft is 50% off and free shipping abounds — I actually went out and did a little holiday shopping in the brick and mortar stores (knocked my nieces off the list, got a few little things for my kids and my husband). But I wasn’t in the mood to spend money on myself.
Maybe it was Scott Pelley’s Hard Times Generation piece that aired on 60 Minutes Sunday night — a sad but insightful look at some of the families that have been forced to live in their cars in light of the recession. Maybe it was hearing that more than 16 million American children are currently living in poverty. Or maybe it was just seeing the first of the Salvation Army volunteers outside my area department stores. Either way, I’m making plans for my year-end charitable giving. And I’ve decided that one of the gifts I give my kids will be a check they can make out to the charities of their choice.
But, as this Wall Street Journal article reminded me, many charities are as cash-strapped as we are, and potential philanthropists have to do their due diligence. You don’t want to give your hard-earned money to an organization that is just months away from going under. Here are their tips for responsible giving:
- Look at the charity’s numbers. A Form 990 can tell you whether or not a charity is in the red. Simply go to that charity’s website or FoundationCenter.org, and use the form to determine the charity’s net assets.
- Give a little at a time. Not only is this easier on your own wallet, but making incremental payments will give you time to get to know the organization before you make too large of an investment.
- Get involved. The best way to really learn about a charity is by doing more than cutting a check. If it’s a local charity, swing by its headquarters or volunteer for a day. If the charity is farther away (or you don’t have time to visit), try to talk to someone who has been involved with the organization. Listening to their take will give you a better sense of what you’re getting into.
Finally, make sure you donate to a group that has proven its 501(c)(3) or tax exempt status. Doing this — plus getting a receipt from the organization — will ensure that you get a tax write-off come April. And then everybody wins.
Now here’s a look at the other headlines of the week:
Bad financial habits? Blame your parents.
According to a new survey released last week, parents can have a huge impact on whether their children are less likely to save or are more likely to be savers and have a 401(k). The latter group, described by the survey as “doers,” are more likely to live within their means, follow a budget, track their expenses and automatically deposit money into savings. Seventy-four percent of “doers” reported having parents who not only taught them the importance of savings but also led by example.
This survey wasn’t the first time I had heard something like this — a few weeks ago, I found a study that came out of the University of Arizona and said that parents are the most important factor in building financial capability in their children.
If you have children, this might seem like a lot of pressure. But don’t stress — setting a good example is easier than you think. First, make sure you have a good foundation (reading this newsletter is a start!). Then, slowly incorporate money lessons for your kids into everyday life. This means explaining that an ATM isn’t a magic machine with endless money when you go to use it, or taking your kids grocery shopping with you and showing them how you stick to a list. Doing this will create a strong money foundation that will last them a lifetime. I wrote about this in the New York Daily News a few weeks ago. For more tips on how to build financial literacy (and how to set a good example), you can check out my column here.
The danger of saying “Just this once…”
This New York Times article is worth sharing for the graphic alone. But the message is pretty good too, and it’s this: we’re enticed by words like “two for one,” “free prize with purchase” or “no money down.” Coupled with a bad day — or a long stretch of self-control that “needs” rewarding — we tell ourselves, “no big deal, it’s just this once.” But far too often, “just this once” turns into “oh, just one more time” and “I promise, this is my last shopping spree. For real!” In other words, we rationalize bad money choices to the point that they can become bad money habits. So the next time you’re tempted to splurge on a cashmere sweater because it’s on sale “just this once,” remember: 50% off is still 50% on. For more on why saying “just this once” is not so good, you can check out the full article here.
Have a great week!
Jean
