by Maurie Backman | Updated July 25, 2021 - First published on Oct. 20, 2020
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At a time when so many are having financial problems, millennials are stepping up.
Many Americans are rethinking the way they spend money during the coronavirus pandemic. Some are cutting back on non-essentials. Others have been forced to cut back on necessary purchases, like food. But recent data from payment app Zelle reveals that almost 75% of millennials aged 25 to 34 have also found the cash to be charitable. Specifically, they've either offered financial aid to friends and family, or they've donated money to charity.
In fact, millennials, on a percentage basis, have been the most generous of any age group during the pandemic. And that's a nice thing to hear at a time when there's so much negative news.
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Maybe you haven't given much money to charity this past year. Or maybe you do have extra cash in your bank account, but you wonder if you can do more.
As admirable as it is to want to be generous at this time of national crisis, do keep in mind that you shouldn't let this drive you into debt. Rather, you should take care of your own essential needs and then donate extra money to others. Racking up a credit card balance in the course of giving just doesn't make sense.
That said, there are ways to be generous outside of parting with cash. Perhaps money is tight right now, or you're earning enough to cover your basic expenses but have little to no money in your emergency fund. If that's the case, consider keeping your cash but donating your time instead. You can offer to watch a neighbor's children for a few hours so he or she can pick up an extra shift at work. Or you might collect food and supplies for a local food bank. The possibilities are endless, and if you're committed to making a difference, you can do so without giving up money you need for yourself.
People who give money to charity often do so because they want to help those who are less fortunate. Chances are, that's what's motivating millennials' recent behavior. But if you're able to part with some cash during these trying times, you might reap some tax savings as a result.
Normally, financial donations to registered charities are tax-deductible, but only if you itemize on your tax return. If you claim the standard deduction, you can't write off your donations. This year, however, there's a new rule in place. The CARES Act, which was passed in late March to provide relief during the coronavirus crisis, allows you to take a $300 deduction for charitable donations. You can take it even if you don't itemize on your taxes.
A tax deduction exempts a portion of your income from taxes. In this case, if you were to deduct $300 for charitable contributions, it means that $300 of your income would not be taxed. In other words, if you give $300 to charity, you won't get all of it back; but you will get a portion of it because you won't pay tax on that income.
Again, snagging a tax break isn't the only reason to be generous. But knowing the new rules may make it easier for you to give just a little bit more.
The fact that millennials are being so charitable during the pandemic is the kind of hopeful news we all need right now. If you're in a good place financially, or are saving money due to lifestyle changes the pandemic has forced upon you, it pays use your good fortune to help others. And if the opposite holds true -- you're struggling right now -- don't hesitate to speak up. At a time when so many people are eager to help others, sharing your financial problems could result in many generous offers that help you through.
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