What Is Your Givings Rate?

Givings Rate

I wondered how so many could be in so much pain
While others don’t seem to feel a thing
Then I curse my wiseness and I get so damned depressed
In a world of suffering, why should I be so blessed?

-Brett Dennen



In the personal finance community, we speak about the need to increase our savings rate often.  Focusing on increasing your savings rate can allow you to achieve financial independence sooner rather than later.  But what about your givings rate?  Should we focus on giving while pursuing financial freedom?

What is a “givings rate” you might be thinking.  You won’t find the term in Investopedia because I made it up.

To calculate your givings rate, I suggest basing it on how you calculate your savings rate.

How to Calculate Givings Rate Example

Givings Rate

(Givings/Disposable Income * 100) = Givings Rate

As you can see from the formula above, these two things are needed to calculate your givings rate:

  • Givings (Amount you give annually)
  • Disposable income (Total income less taxes)

Last year Mr. Fat FI had a disposable income of $100,000 and donated $2,000 to charity.  Given this information, calculate his givings rate.

If you used the powers of mental math to arrive at an answer of 2%, good for you!

(2,000/100,000 *100) =2%


*To calculate your savings rate, just replace “givings” in the formula above with the amount you save annually*

Now let’s move on to discussing why this number is important!

Why Is Giving Important?

It is my belief that as our financial lives improve so does our power to have a positive impact on society.  Growing up as a child, my grandmother taught me the importance of giving.

She did not sit me down and lecture me.  I learned through her actions.

Whenever she cooked food, she would offer a plate to those living closest to her in the small, rural town of St. Gabriel, La.

She would also give money to those in the community who needed it most.

Unfortunately, my grandmother is no longer with us in the physical form.  However, her spirit of kindness lives on through me!

As my financial life has improved, I have realized that deciding whether I should max out myHSA out or contribute more to a deferred account is a first world problem.

I sometimes ask myself this question from Brett Dennen’s song There is So much more:

“In a world of suffering, why should I be so blessed?”

-Brett Dennen

My grandmother’s response would be, “J.O. remember to help others in need. Granny loves you!”

“Grandma, I know that but giving will have to wait until I hit my FI number.” would not be an acceptable reply to her response.  She would want me to give now rather than later!

Giving Now versus Giving Later

I would argue that you should give now versus giving later while on the path to financial freedom.  You should give now because you have the power to help mitigate suffering in this world now.

Let’s imagine for a second that you know some children who have fallen on rough times.  These children are doing every thing in their power to help their families out but sometimes they come up short.  Would you help the kids out or tell them you will give later when you have achieved financial independence?

Are you having trouble empathizing with such a situation?  Let me help you out by sharing one of Dee-1’s latest videos.  One that I found heartbreaking to watch.

Dee 1’s Heartbreaking Video

“Man, you talking about about hard work and sacrifice. Look, I’m on Bourbon Street in New Orleans one night and I met these kids who were 9, 10, and 11 years old.  You would not believe what they doing out there to make money in order to pay bills for their family.”


In Dee-1’s music video I Don’t Want to Let You Down, he tells the story of three young men using their musical talents to survive.  The kids play on Bourbon street in New Orleans with buckets in front of them for people to drop tips in.

One of those children is named Zedrick.  Dee-1 chooses to tell his story.  At the beginning of the video, he asks Zedrick, “Why do you go out there and drum?”

“To take care of myself” is his response. “I help my mom out with her bills.”  He goes on to say he uses his money to buy himself, “shoes, clothes, and stuff.”

Near the end of the video, one of Zedrick’s friends comes on to say, “Only thing I say is y’all can think what y’all want. Y’all are giving us y’all money and we using it for a good reason, to support our family!”

Would you place money in Zedrick’s bucket if you saw him on Bourbon Street in New Orleans?  I hope your answer is, “Hell yes!”

Situations like these exist throughout America and the world.  The struggle is all too real for millions.  We have the power to change that.


In the personal finance community we speak a lot about our savings rates (rightfully  so).  But I think a far more important rate is our givings rate.  As those with above average discretionary incomes, we possess the power to have a positive impact in this world.

If you cannot give more money, at least try to volunteer your time.  Teach someone an in demand skill that they may be able to monetize in the future.

Giving more may stop you from reaching your projected FI date.  Who cares?  No one will remember when you reached FI, except for you.

Before going to bed tonight, ask yourself, “In a world full of suffering, why should I be so blessed?”  Keep asking yourself this question until you can come up with an answer!

Community Feedback

  • How do you feel about giving more while you are on the path to financial freedom?
  • What organizations do you donate money and/or time to?
  • How do you calculate your givings rate?
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Author: Jerry

Jerry is a Business Insider Contributing Writer who is obsessed with personal finance. He believes you can improve your financial situation by applying principles taught by the financial independence community to your financial life.

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11 thoughts on “What Is Your Givings Rate?

    1. Thanks again for reading, commenting, and sharing, Gary! My savings rate isn’t as high as I would like it to be either but I am making progress! Just want to make sure I am not neglecting my “givings rate” while improving my savings rate!
      jobrown2787 recently posted…What Is Your Givings Rate?My Profile

  1. We’ve always given 10-12% of gross income or about 15% of net income. That was with a stay at home mom, one income, raising three kids through college and slightly early retiring. We still give that amount from our side gigs. We never had any consumer debt, paid our modest house off early and bought our cars with cash. The best way to become a multi-millionaire is to give away a large amount of your own money. It puts money in its place, which is nowhere near a top priority unless you are a sad person. We only picked the percent we chose because it was a guideline of our faith, but far from a hard rule in our interpretation. It was as good a guideline as any and I liked that it was our biggest expense, bigger than our house payment so you really felt it. And yes I was a high earner so it was pretty easy but I also think being a giver helped me earn the high income. Yours is a different percent but it is still awesome and significant, good on you for being so generous! It is the act of giving a significant chunk of your world that counts and that is different for everyone. Great post.
    Steveark recently posted…I Made $2,000 Today!My Profile

    1. Wow, that is very impressive, Steve! I am no where near giving 15% of my income but my goal is to give more once I knock out some loans.

      “The best way to become a multi-millionaire is to give away a large amount of your own money. It puts money in its place, which is nowhere near a top priority unless you are a sad person.”

      Very refreshing perspective! My grandmother’s giving was guided by her faith. I believe you should give more, regardless of your faith. If you don’t have money to donate, volunteer some of your time!
      jobrown2787 recently posted…What Is Your Givings Rate?My Profile

  2. Jerry, this topic is near and dear to my heart.

    “You should give now because you have the power to help mitigate suffering in this world now.” I love that line. I also love when you said this, “Giving more may stop you from reaching your projected FI date. Who cares? No one will remember when you reached FI, except for you.”


    1. Hey, Deanna! I am glad we are on the same page about giving :-). While I haven’t been to church in a while, I’ll never forget the lessons I learned from attending Bible study at my grandmother’s church.

    1. Hey, Tim! I am really glad you like the post :). That would be great if it became the standard!! Having a high savings rate is what allows you to give more, so I guess you could say the saving rate is equally important, right?

  3. I’m not sure how to calculate our givings rate. We use a donor advised fund, which complicates matters a bit. We’ve donated mid-five and six-figures to the fund, but typically give a low five-figure sum from it annually.

    The White Coat Investor says he gives 50% credit when you donate to the DAF and the remaining 50% when you give from it.

    I don’t worry too much about the math here, but we made it a goal to have 10% of our nest egg built up in a donor advised fund before retiring early so we’d always have a pot from which to give, even when we’re done earning money.

    Thank you for highlighting charitable giving. It’s a topic that doesn’t get enough attention in the personal finance world, and I know from experience that people tend not to read the giving posts. I’m glad to see this one featured.


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