Your Money: You can do better financially by doing good
NEW YORK (Reuters) – It stands to reason that getting involved in your community helps others. But what if it helped your own bottom line, as well?
That is the finding of a new survey from financial giant MassMutual, which discovered that nearly half of the Americans surveyed in the 2018 Financial Wellness and Community Involvement Study believe that community involvement helped their own pocketbooks – not just their emotions or their sense of belonging, but their actual money.
Community can mean different things to different people, but wherever you happen to sink your roots, being connected to others appears to improve financial behaviors and decision-making. To wit, the MassMutual survey found that those who are community-minded are better at tracking their spending: 80 percent do it every month, compared with 61 percent of people who are not involved in the community.
They are also superior at putting money in an emergency fund every month (45 percent versus 30 percent), measuring their financial progress (56 percent versus 36 percent), and directing money into retirement savings (45 percent versus 29 percent).
Beside these enhanced money behaviors, there are also concrete ways that community involvement can power-boost your career and finances:
* It helps you get a job.
In one study by the Corporation for National and Community Service, researchers found that volunteering led to 27 percent higher odds of employment. And for those without a high school degree, it actually boosts your odds of finding work by an astonishing 51 percent.
* It provides a stream of new leads and business opportunities.
When 47-year-old Santa Monica financial planner Mitchell Kraus got involved with his local Rotary Club around 10 years ago, he found that the usual networking meet-and-greets did not lead to much.
But when he jumped into the club’s volunteer activities – from planting greenery to reading books to local elementary schools – he experienced a surprising byproduct: He started getting business referrals left and right.
Krause said he has had more than two dozen clients sent his way over the past decade by other attorneys and accountants in the club who volunteered right alongside him.“Opportunities started to open up when people saw I wasn’t just there to get business, but to give back to the community,” Kraus says.
* It acts as an informal social safety net.
If you are down on your luck, it helps if you have circles of supporters to turn to – whether that happens to be your cousins, your coworkers, or fellow parishioners.
In the MassMutual survey, more than half said they have supported others in their community during periods of financial stress. The reverse is also true: A quarter of people say their communities have kept them financially afloat, when they needed help the most.
* It helps you make better financial decisions.
If you are a butcher or a baker, you might not know a whole lot about what percentage to save, in what accounts to put that money, or what specific investments to consider. But if you were a member of Mitchell Kraus’ Rotary Club — and you find yourself surrounded by a group of financial planners, accountants and attorneys who like you and want you to succeed – that is a lot of financial advice you can tap.
Not only are those resources available to you, but you are likely modeling the financial habits of the successful people who surround you. That’s a financial win-win.
(The writer is a Reuters contributor. The opinions expressed are his own.)
Editing by Beth Pinsker and Jonathan Oatis