Counting the Cost of Generosity
Perhaps you’ve heard that Warren Buffet calculates the cost of purchases in terms of what that money could yield in the stock market over many years. It’s a different way of thinking that can turn that daily lunch out into a $150,000 proposition. Last we looked at the art of the alternative—the idea that we can often find similar, less expensive options that allow us to have our financial cake and eat it, too.
But this week, let’s count the cost of a different type of spending: giving away money. Most people agree it’s good to be generous. People have widely different approaches to how, where, and what amount to give. But one thing we all ought to do is count the cost of our generosity.
For example, if you give away 10% of your income, how does that deflate your lifestyle? What kind of car could you be driving? What kind of upgrade could you have in your home, what you eat, or your vacation plans?
What might your investments look like after 30 years of an extra 10% monthly contribution? How might your net worth change if channeled that “extra” money into debt payoff? How different might your kids’ college funds looks?
This exercise isn’t meant to be self-congratulatory. Instead, it’s a great way to give wholeheartedly, with eyes and “pocketbooks” wide open. It’s valuable to fully understand what the trade-off is and deem it completely worthwhile to give instead of keeping it all for yourself. Without counting the cost, it’s easy to give rotely, perhaps because it’s the “right” thing to do–which is good, but might fall short of giving cheerfully and enthusiastically.
We’ve counted the cost of our generosity. We know what our giving means in terms of net worth growth or what kind of car we could drive. And our conclusion isn’t to give ourselves a pat on the back, but to affirm what a good investment we are making through giving. It’s a way of resolutely calculating that the potential lifestyle or net worth inflation is garbage compared with sharing what God has given us.
I encourage you to count the cost of your generosity. Perhaps you’ll even find yourself wanting to give more as you face the alternative destinations for your money and realize they pale in comparison. I share this because it hasn’t made us feel deprived, greedy, or self-righteous, but only more determined, excited, and blessed.
The Cost of Keeping
While you’re already calculating, why not consider the cost of keeping it all for yourself? Sure, you’d save more, invest more, or live larger. But what would you miss out on?
You won’t get to inflate the lifestyle of those who actually need it.
You won’t get to increase your real worth.
You’d miss out on the well-documented psychological benefits that come from giving, particularly those who give at least 10% of their income.
You’ll never see the surprising ripple effect a gift can set in motion.
You won’t get to partner with organizations and causes you care about.
You’ll miss out on an important and much-needed way to be an agent of change in the world.
You won’t get to experience the joy of entrusting your resources back to their Source.
You’ll likely leave the most important factor in your finances—your heart—untouched.
You won’t learn the financial discipline that consistent generosity can teach.
You leave your heart vulnerable to greed.
You could reinforce entitlement in yourself and your children.
Counting the cost of giving vs. keeping is a powerful way to make informed decisions about your money. Maybe the exercise will even motivate more generosity. We won’t know the full impact of our gifts in this life, but we can be confident that when we give wisely, both the giver and receiver will benefit:
“Give, and it will be given to you. A good measure, pressed down, shaken together and running over, will be poured into your lap. For with the measure you use, it will be measured to you.” (Luke 6:38)
What do you think of counting the cost of generosity? What other benefits might we miss out on if we don’t practice generousity?