How to Do Good and Save Money This Holiday Season

There are a lot of benefits of budgeting, and tracking your spending—I mean, obviously, which is why I won’t shut up about them.

But one of the biggest, that I don’t talk about as often as I probably should, is that when you know how much you spend, you also know how much you have left over every month. And when you have money left over, you can do fun things like give it to charities you care about.

True confession: this year is the first year I feel like I’ve Gotten It Together with my charitable giving. I knew how much I wanted to give, and I made a point of setting up an automatic monthly contribution to one of my favourite causes (and next year, I’m adding another one to the list).

What let me do all this was tracking my spending.

What prompted me to do it? (You’re about to think I’m more of a nerd than you already do, trust me.)

Filing my taxes.

See, I love filing my taxes, and if you didn’t know this, you actually get a tax credit in Canada for donating money to charity. (This might be true in other countries? I can’t know more than one tax code pals, no one who isn’t a professional tax person should ever have to do that—and if they do, you should pay them a lot of money probably.)

On top of that, if you’re a first-time donor, you get even more tax awesomeness for the cash donations you claim on your returns—and this is, according to the information available, the last year to claim that bonus.

This is the last year to claim the first-time donor super credit on your taxes.

And yes, it is officially called the First-Time Donor’s Super Credit. Anyone else picturing a tax calculator wearing a superhero cape right now? Just me? Cool.

Anyways, here’s how it works.

  • You claim a cash donation to a charity on your tax return (tax software will almost always make this painless)
  • AND you (or your spouse or common-law partner) haven’t claimed a charitable donations tax credit for any year after 2007
  • THEN you get an extra 25% of your money back, on top of your regular tax credit, on your cash donations up to $1000 this year on your tax return

And if you’re wondering why I keep saying “cash donations,” it’s because this doesn’t count against donation credits for donating things—just money.

Here’s a quick example to show you just how big of a deal this is for first-time donors.

If you donated $1000 in cash this year and your income was $50,000 (aka my favourite it’s-not-absurd-to-think-a-millennial-could-earn-this-salary number) you’d normally get $262.00 of that money back on your federal taxes. That’s according to this calculator from the CRA.

If this was your first time claiming a donation on your taxes? You’d score another $250 back on your tax return thanks to the first-time donor super credit.

You would effectively get back more than half of the money you gave to charity this year.

If that’s not a reason to add “give back” to your holiday to-do list, I mean, I don’t know what is, especially since this is the last year you can claim that first-time donor bonus.

A word of not-advice

As usual, my standard disclaimer is that taxes are hella complicated, and none of this should be considered tax advice for you. It’s just information I thought would be handy, and that I surprisingly enough had no idea was happening this year. (Hey, I’ve only been doing my taxes myself for the four years this first-time donor credit has been a thing, I thought it was a forever deal! It is not, apparently.)

So in the spirit of not-advice, I want to not-advise you to take advantage of the first-time donor credit if you’ve got some extra money lying around and want to get even more of it back at tax time. I’d also not-advise you that the deadline to make any donations you want to claim on your 2017 taxes is December 31st, 2017.

And then I’d actually-advise you to get intentional with your charitable giving, figure out which causes are close to your heart, and set up a recurring monthly donation to them starting in January.

P.S. If you’d love to donate to a cause monthly, but you have no idea where your money goes, I’m going to be running an OG Half Banked program in January: the Track Your Spending challenge. It’s one of the more painless challenges you can do in the new year, since it’s basically just observing your spending, and it’s totally free—and you’ll have all the support you need to actually follow through. The challenge is over, and thank you for everyone who participated!

This is also my last post until the New Year—January 10th, to be specific—so happy everything, merry always, and may you enjoy a sinful amount of eggnog this holiday season (it’s basically melted ice cream, and I’m drinking it in my coffee right now, don’t @ me).