When I ask money experts or psychologists how we can feel better about our own financial situations, they almost always have the same answer: Become more generous.
In a recession, giving to others becomes even more important, first because people and charities need more help, and second because we can use the psychic boost when we're feeling down on our own luck. But consumers typically reduce their giving by about 2.7 percent during longer recessions, according to the Center on Philanthropy at Indiana University. (The average household typically gives about $2,247 a year.)
Here are six ways to get your giving in gear:
- Develop a plan. Many of us give haphazardly throughout the year, donating $30 for a friend's walkathon and $100 at a school auction. But Lisa Endlich, author of Be the Change, says that's a mistake. "It doesn't make you an effective giver. You don't know how the giving is being used, and it's not something that's integral and important to you," she says. "People do their best giving when they focus on what matters to them the most," Endlich adds.
- Find what matters to you most. Endlich recommends that people ask themselves what one or two things matter most to them and what will affect others most. Inspiration can come from almost anywhere; I became interested in the problems affecting Indian streetchildren after watching Slumdog Millionaire and was moved to donate to a related charity.
- Learn everything you can about your chosen cause. Bill Gates recently shared this advice for would-be philanthropists with the New York Times: “The key thing is to pick a cause, whether its crops or diseases or great high schools... Pick one and get some more in-depth knowledge,” by traveling, reading, or volunteering.
- Don't think you can't make a difference. Nicholas Kristof, author of the Times op-ed featuring Gates, encourages everyone to get involved. "The only difference between you and Mr. Gates is scale," he writes.
- Make sure your money is being used well. Before giving your money (or credit card number) to anyone, do some online research to make sure it's legitimate. One helpful site is Charity Navigator; just type in the name of the organization and see what pops up.
- Don't forget about non-monetary ways to give. Donating time, used clothes, and even blood can change someone's life, and also makes you feel good. "The needs in our own communities for basic services, such as clothing and shelter, are sky-rocketing, so we all need to think about it. There are people in the developing world who are already living on a knife's edge. We need to focus on meeting those basic needs," Endlich says.