Through 2020 and 2021, we learned a lot. First, and probably most important: expect the unexpected! No one could have anticipated the events of the past few years, just like we can't predict what will happen next. We also understood the value of philanthropy and coming together to support those in need.
As we look ahead to 2022 and the year to come, now is the perfect opportunity to set a strong financial and social impact foundation taking into account the lessons we've recently learned.
Create an Emergency Fund
Many individuals lost their jobs or were unable to work in recent years due to the COVID-19 pandemic. Without an emergency fund, those individuals had to dip into other savings or rely on credit cards to get by. While we hope we won't see another pandemic anytime soon, it's an incredibly important lesson to build an emergency fund that can sustain you in the event that you're unable to maintain your typical income.
There are many suggestions for how much you should save in your emergency fund, ranging from 6-months expenses to a year's salary. There isn't one perfect approach here — that will depend on your situation. It's a good idea to consider how long it would take you to find a new job if you lost yours, as well as if you have kids or other dependents, such as elderly family members, you also need to support. The longer it would take to find a new opportunity along with the more dependents you have, the higher your emergency fund should be.
Your emergency fund should be kept in a savings account where it won't be accessed or withdrawn on accident. You should never invest your emergency fund as that exposes you to risk — what if the markets are down when you need to withdraw? You can still have an impact with your emergency savings by selecting a financial provider that makes good use of your funds through green initiatives.
If you get a raise or bonus, give your emergency fund a little extra padding before splurging on a new purchase. Once you have your emergency fund in place, you can begin looking at purpose driven-investments and amplify your impact with giving.
Be Mindful About Spending & Investing
Limiting your spending isn’t just a financially-wise move, it’s also socially responsible and sustainable. By making fewer, more mindful purchases, you’re able to reduce your money spent, increase your ability to save, and decrease unnecessary waste.
Before you make a large purchase that isn’t a need, take some time to ensure it’s something you truly want, not just an impulse. Here’s a thought process you can consider working through each time you want to make a purchase:
- How frequently will you use your purchase?
- Is this item durable enough to last as long as I need it to?
- Is there a way to buy this second-hand, low-waste, or local?
Every time you want to buy something, pause and work through the above thought process. If you still want to make a purchase, or once you’ve identified an alternative, wait one week. If you still feel the same way, move forward with purchasing. If you’ve lost interest or forgotten, you’ll know that you didn’t really want it that bad after all.
When you do choose to make purchases, look for opportunities to buy from companies that align with your values. Explore the organization’s mission, values, and certifications. Good qualifiers to look out for are Certified B Corps and 1% For the Planet Business Members. It’s always a great idea to shop locally and support small businesses wherever you can. By spending money locally, you’re enriching the lives of your neighbors and community members.
Similarly, your investments should reflect your values. As a bonus, sustainable funds frequently outperform traditional ones, and present a valuable opportunity to not just grow your savings for the future, but to also support the businesses working to enrich our communities.
Learn Something New Monthly
Many industries have been forever changed by the COVID-19 pandemic, with different skills becoming more or less valuable in the workplace. It's important to continue improving and refining your skills, as well as broadening your horizons to learn new talents. You never know what could happen next, and the more experience you have in different areas will help you stay employable.
Volunteering can be a great way to make a difference while learning at the same time. Try to make volunteering a monthly habit — this is a great goal to involve your kids in as well. Explore how you can donate your time to different organizations throughout the year, learning new skills simultaneously.
For example, programs like My Money Workshop are great for getting involved by helping young adults improve their financial literacy.
Give Back Weekly
Instead of waiting until the end of the year to donate to your favorite causes, make smaller donations throughout the year. That way, your favorite organizations are able to have a larger impact sooner and can better allocate resources accordingly.
Make giving back part of your weekly budget with micro-donations. Consider opportunities to cut expenses, and contribute the savings to your favorite organizations.
Tools like bunny.money make it easy to put your savings on auto-pilot with automatic transfers and smart round-ups you can customize based on your goals. You won't notice the few extra cents you put away with each purchase, but they'll have a huge impact on the causes you care about.
Can’t Make a Donation? Amplify Causes You Care About Daily
While you may not feel like one, you're an influencer! Anytime you talk about something new or share a post on social media, you inspire those around you to learn more. You can make a difference without even spending a dime.
One of the most often overlooked ways to support an organization is by amplifying their message. Even if you can't make a micro-donation every day, explore how you can help charities reach more people through your network. When it comes to GoFundMe campaigns, sharing to social media results in an average of $15 in donations according to a previously published GoFundMe report.
Consider making a social media post about the causes you supported in 2021, the causes you plan to support in 2022, and why. You can also make daily posts sharing exciting updates from your favorite causes or highlighting an impressive impact they've had. Many nonprofits don’t have an expansive marketing budget, so spreading word of mouth organically can be immensely impactful for supporting the cause at hand.
Stop Overcomplicating Your Finances
Saving for your future while giving to causes you care about doesn't have to be challenging. The bunny.money app makes it easy for you to save money for your goals and donate to your favorite charities in a sustainable way that works for your unique financial situation.
Learn more about how bunny.money helps you Save for Good® and get started today!