I’ve written a few articles now about charitable giving in Canada as I believe in the power of generosity. However, is this concept in conflict with our basic financial needs?
We all want to know that our own needs are taken care of. In this post, we'll explore the concept of the hierarchy of needs and discuss why it's crucial to understand our own situation in the context of giving. If you find yourself wondering whether your own needs are adequately addressed, I invite you to read on and consider reaching out.
Maslow's Hierarchy of Needs is a well-known psychological theory that illustrates the different levels of human needs. At the base of the pyramid are our physiological needs —food, water, shelter, and health. Above that are safety needs, followed by social needs, esteem needs, and self-actualization needs. This hierarchy reminds us that we must satisfy our fundamental needs before addressing higher-level aspirations.
A simplified view of Maslow’s pyramid looks something like this:
Now relating this to the financial world, we can see the following hierarchy:
Similar to Maslow’s hierarchy, the base of the pyramid includes necessities for financial stability and safety. We must first establish a solid foundation by focusing on personal finance to make sure we can afford items such as food, shelter, and other expenses. This also includes maintaining a budget, managing debt, saving for emergencies, and managing risk through insurance. At this stage, we are trying to avoid single points of failure in our financial life. By attending to our financial well-being, we create a stable platform from which we can extend support to others.
Further up the pyramid, we start to move into broader concepts, especially near the top. Legacy is typically not the first need we think of or one we have to take care of. Just like Maslow’s hierarchy, more primitive needs come first before exploring deeper, emotional, and subjective needs.
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So back to my original question, where does giving fit in? It is hard to think about giving money away if we are still working on satisfying the lower levels of the pyramid. Therefore intuitively I think giving money away would fall higher in the hierarchy.
At the same time, concepts such as tithing or regularly giving money away can be incorporated into your financial life even when you might be lower on the pyramid. I think doing so establishes habits and a view of money that will carry through your entire life amongst all financial stages. I personally think giving has a place all along life’s financial journey, but I understand that looks different for everyone.
Take a moment to reflect on your current financial situation. Are you confident that your own needs are adequately addressed? Do you have a solid financial plan in place? Where do you feel giving and generosity fits for you on the hierarchy? Where are you currently on the hierarchy?
If you find yourself questioning whether your own needs are sufficiently taken care of, consider reaching out for professional advice. An advisor can help you navigate the complexities of financial planning and ensure that you are on track to meet your goals.
The main point I want to convey is that I understand it can be difficult to engage in the conversation of philanthropy without understanding if our families are first taken care of. I don’t think anyone lays awake in the night wondering how to give money away more efficiently, but I know personal finance can certainly cause stress.
