In our society charitable giving is greatly encouraged. It is promoted in a fashion that suggests if you don’t give you are a heartless cretin who only cares for him or herself. How could you not give to the starving children? How can you not tithe to your church?

Well, there are a lot of reasons not to give that are directly associated with a charity/church. The charity/church could be incredibly inefficient and waste most of the donated money or in a worst case, be outright corrupt. It could provide a quality service, but this service might require recipients to jump through too many hoops or force them to do something that should be a free choice. These should all be concerns and anyone giving should heavily research the charity/church.

However, before you even choose a charity you need to examine your own financial situation. How can you possibly give money away if you are in a poor financial position yourself?

Make sure these are checked off before you give away any money:

1. If you have ANY credit card debt you carry from month to month stop reading now, as you are in no condition to donate to anything.
2. If you have a car loan you should not donate any money.
3. Have at least 6 months of expenses saved up. The total should be based off of what you spend now, not what you will cut from your expenses if you lose your job. If you have children you should have 1 year of expenses saved up, as your children might be the starving children on the commercial if you are not financial secure.
4. Your Roth IRA should be fully funded…100% no exceptions.
5. Fully fund your 401k (if it is good). If you aren’t funding it fully, but believe you are putting enough in to both your IRA and 401k, then use this calculator (http://finance.yahoo.com/calculator/retirement/ret-02 ) to determine if you are currently putting enough away and if your current balance is roughly equivalent with the one provided by calculator. If you are falling short, do not think you will make it up later, as you won’t. Hardly anyone does.
6. If your 401k isn’t good and you are saving in a taxable account use the Dinkytown Investment Returns Calculator (http://www.dinkytown.net/java/InvestmentReturn.html#calc) to determine if you are on track for your retirement goals. I use a different calculator here, because of taxes.
7. If you have children, and have done all of the above, fund a 529 college investment program. In the words of Jim Cramer, “Allowing your kids to start debt free is the best gift you can give your child.” This makes them less likely to need a charity, which reduces the burden on the charity.
8. If you expect a major expense in the future (purchase of a car, baby on the way, new house, etc.), and you don’t have a substantial down payment (50% for the car, a few thousand for the baby, 20% for the house, etc.) outside of everything else, you should not donate.

I know these rules will seem overly harsh to many people, but how can you pretend to take care of others when you aren’t taking care of yourself. Your ultimate goal should be to take care of yourself first. By taking care of ourselves first, we are taking a burden off of society and keeping the decision making power over our lives.