These days, a common phrase when it comes to the topic of financial health is, “if I only knew this when I was younger.” Especially in my line of work as the Director of Development & Outreach for Jewish Free Loan, I hear both clients and donors alike express that they wish they knew more about financial literacy beginning at a younger age. While some very basic skills are discussed in school and some individuals have the privilege of majoring in degrees that include finance and accounting, most are expected to learn these lessons from their family or through firsthand experiences.
In an effort to best prepare our children and the younger generations for success, it behooves us to have conversations about financial literacy and financial best practices, but how do we begin? Charitable giving is an excellent topic to not only teach about the importance of tzedakah and giving, but also as an entry point for building strong financial health and decision making.
The Arizona Charitable Tax Credit allows for residents of Arizona to receive a dollar-for-dollar tax credit on their Arizona state income tax return. By making a donation to a Qualified Charitable Organization of your choice, you can receive a dollar-for-dollar tax credit of up to $400 per individual or $800 per married couple filing jointly. There are numerous Jewish and nonsectarian organizations throughout the state who qualify for the Charitable Tax Credit and who offer a variety of different services and help to those in need. By donating to an organization of your choice through this program, you can begin demonstrating and teaching about financial health and the importance of giving.
First, set the example and discuss your giving habits. When it comes time for you to make your charitable gifts, let your children and family members know what causes are important to you. Explain what organizations you give to and why you choose to do so. In some cases, this may also be a great opportunity to teach about the Arizona Charitable Tax Credit which can lend itself to starting a conversation about filing taxes. This topic alone will give you a great point of entry to have an in-depth conversation about fiscal responsibility.
Next, explain that in order to give, you must also save. After explaining your giving habits, find time to explain how you have been able to save that money. Charitable giving not only requires introspection and intention for choosing an organization you deem worthy, but it also requires prioritizing other expenses and responsibilities. It’s important for children and family to understand what other items take priority and why. These conversations give real life examples of what younger individuals might be able to expect in their future, thus better preparing them to not only budget for the necessary expenses, but to also make charitable giving a normal occurrence in their financial cycle.
Now that you’ve introduced a few basic topics, see what questions arise. Hopefully a natural discussion will flow from here. Who knows, this could even be a learning opportunity for you as your children or family members bring up their own topics to consider.
As the year begins to come to a close, please consider making a charitable contribution to an organization of your choice. Whether the donation is made for general support or to take advantage of the Arizona Charitable Tax Credit, your generosity will impact the local community and potentially the financial health of future generations. Together, we can use this time of year as a chance assess how we can better support our children and the community as a whole and provide valuable lessons in financial literacy. Please visit jewishtaxcredit.org for a list of qualified Jewish organizations or azdor.gov for a full list of qualified organizations.
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