Canadians, as a group, are kind of cheap when it comes to charitable donations. As Globe and Mail tax expert Tim Cestnick noted in a recent column, just 20.5 per cent of tax filers claimed donations on their tax returns in 2016, and the median donation was $300.
A suggestion on how we can do better: Parents, create a culture of charitable giving in your family. Some research from a U.S. charity suggests there’s a double payoff from doing this – children of charitable parents tend to be generous themselves, and giving is correlated with higher levels of family harmony. In a survey of 3,000 people, those who grew up in a tradition of giving considered themselves closer to their families and more often rated themselves as very happy.
A study of charitable giving has shown that people understand the importance of donating. So why don’t they follow through? Partly, it’s shaky personal finances. I’ve seen a steady flow of polls this year showing high levels of financial stress, even though the economy is in pretty good shape. There’s also a lot of cynicism about how efficiently charities spend money, even though there resources out there to find good charities.
There are financially generous Canadians – they’re the ones who give enough to drive up the average amount donated in 2016 to as much as $2,250 for people aged 65 and older. You might just raise happier, more generous kids if you follow their lead.
Here’s the latest Statistics Canada report on donors and donations:
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Rob’s personal finance reading list…
The $5-million retirement
All about the backlash to U.S. personal finance expert Suze Orman’s trashing of F.I.R.E. Orman said you need $5-million – that’s US$5-million – to retire. For a lux lifestyle, maybe. For a comfortable Canadian lifestyle, that’s a big overshoot. Note: Public health care in Canada reduces (not eliminates) the need to cover health-related costs in retirement.
So, how much money do you actually need to retire?
A financial planner looks at how issues like longevity, taxes, inflation and the power of compounding must be considered in answering this question.
Stuff you hear in every stock market correction
A roundup of all the clichés that coming pouring out when stocks fall. Give this a read if you were freaked by the downturn last month.
It’s OK to splurge when…
Personal finance expert Ramit Sethi writes about how he organizes his money. “Every month, the money I earn gets automatically put toward my bills, savings, and investments. Afterward, the rest of my money is left up to me to determine how I want to spend it – guilt-free.” This caught my eye because I do exactly the same thing.
Don’t mess with the IRS
The snowbird’s guide to foreign ownership, health care and U.S. taxation (for Globe Unlimited subscribers).
Today’s financial tool
Test your economic and financial knowledge by taking a test created by the Canadian Foundation for Economic Education. The CFEE will report on the overall results at the end of November, which is financial literacy month.
Ask Rob
Q: How is the Canada Pension Plan monthly amount calculated? Is it based on the total earnings over one’s lifetime, or do they look at the five top-earning years or can the final work years' income affect the amount?
A: This question is covered in the Q&A that accompanies an online calculator we developed to help readers decide the right age to start CPP retirement benefits. “If you take the CPP at 65 and older, your retirement benefit is calculated using your highest 39 years of earnings from age 18 to present, ignoring other factors. At age 60, your best 34.8 years are used."
Do you have a question for me? Send it my way. Sorry I can’t answer every one personally. Questions and answers are edited for length and clarity.
What I’ve been writing about
- This is a definitive sign you have overborrowed and owe too much
- The case for 30-year mortgages as a financial stress reliever for new buyers
- The ‘blazingly simple’ portfolio that just keeps on winning (for Globe Unlimited subscribers)
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Rob Carrick