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by Moritz Linder
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Effective givingPersonal finance
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I recently realized that saving money to build reasonable wealth is a priority in my life that I want to pursue alongside giving significantly. I want to feel independence from the need to work in my current job, be confident about buying a house for a family someday, be in a position to help family in need etc.

Saving and giving are two pots I would like to balance out. I am currently completely unsure about how much I should reasonably save and how much savings I need to reach my goals. 

Can you recommend resources, rules of thumb that you follow etc. to find my personally right saving rate?

Having that sorted would make me feel much more secure about my giving.

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Charlotte Darnell

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I don't have this fully worked out for myself yet, but here are some things I've been considering recently. They're not exactly novel but might be helpful nonetheless.

1) Not having runway/savings has been really quite stressful/ inconvenient at times. I think there is some amount that does just seem robustly good to have. I don't have a clear idea of exactly how much that is though. Maybe thinking through the specific scenarios that have either happened or I'm worried might happen may point me in the right direction of a figure. 

 2) I've really noticed the hedonic treadmill now that I (and my friends) earn a salary. I also expect the pressure to use money for things other than donating to only increase as I get older (more responsibilities, unexpected life events, social pressure etc.).  By donating now, at the same time as I'm trying to build up savings, I feel like I'm locking it in as part of my identity and habits, rather than waiting and trusting a future me to donate, when in the future my goals might change. 

3) For me at least, it doesn't feel like I'm only weighing up savings and donating, it feels more like I'm weighing up 
- donating (you could say ~investing in my values)
- investing financially in my future (savings)
- investing in other ways in my future (eg. getting fit, eating well, going to therapy, taking care of important relationships, trying to have experiences that help me grow and learn). 

3) There is a chance though that money is disproportionately more useful sooner for the 3rd category - eg. getting help for (mental) health issues before they get worse, acquiring skills you can then use for longer, being able to do experiments that help you make life decisions. However, the benefit of acting sooner likely applies to savings and donating too, so I'm not too sure how to weigh them up. 

4) If you're waiting to donate while you build up savings, (or invest in other ways) I'd consider having a specific set goal/plan in advance. I have a (non-EA) friend to whom saving is really important. No matter how much he saves, though, it never feels 'enough' and he keeps moving his goalpost.

5) If I really sit with it, most of the things I think I need, I really don't, but giving them all up would likely make me very sad. On the margin, however, I absolutely could (and should by my values) give more. Elliot recently wrote "Do what you can. No more. No less". I personally need to do a big sit down and think hard about where the no more, no less, truly lands me. 
 

Kirsten

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I'm not sure I have an answer, but one thing I aim to do is save a good amount and enable charitable donations of 10% or more by keeping housing and other fixed costs lower than I could, rather than seeing my budget as just a tradeoff between giving and saving.

NickLaing4
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I completely agree, using less money in our everyday lives is a huge Factor here which can easily be ignored. I also ask people to consider their generational wealth. Many people are set to inherit a lot of money with high likelihood but don't factor that into their saving/giving plans which seems weird to me at least with an EA framework. For example If we have a 80 percent chance of inheriting 500,000 Dollars then you can afford to save a lot less than someone who won't inherit anything.

As a side note personally I find saving very much money quite hard to justify morally, especially if you have a solid safety net with government/family/friends but that's a whole nother discussion!

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MaciekZajac
Just a minor point - i I am willing to rely on family/friends as my financial safety net, then I should also be ready to reciprocate this to an equal degree. Relying on each other for financial safety does not obviate the need for saving, on the contrary, it necessitates them. Not saving and risking having to rely on a government safety net, while defensible, is not wholly unproblematic - surely this is not a universalizable strategy.
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NickLaing
That's a fair point, except I think it is universalisable to some extent because risk is pooled and only a few in the rich Western world will undergo catastrophic issues. Also there's some argument that it doesn't need to be universal, because we are active at the margins - others are going to save lots regardless but maybe we don't need to? I agree it's complicated.
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MaciekZajac
I suppose this would depend on the specifics of the society one lives in - is the social safety net rarely used and not under strain because everybody is generally prosperous and it exists just in case? Or is it already strained and failing to catch some? At least in the latter case EAs making risky choices and ending up putting avoidable pressures on the social safety net would come at a direct cost to underprivileged individuals, kinda like flower-children relying on free neighborhoods clinics in the 60's ended up hurting local community access to basic healthcare. I'm also skeptical by default o any EA exceptionalism - I donate much so I am allowed to offload risks onto society could become "I donate much so I never tip/settle small debts/generally freeride in minor ways whenever I can". For me the strength of the basic EA pitch has always been its universalizability and full compatibility with otherwise respectable, responsible, others-friendly lifestyle.
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NickLaing
Yeah I'm really talking about the situation where the safety net is rarely used bbecause everyone is generally prospeous. I suspect that's the situation even for the majority of the people here on the forum. Not people who don't have that kind of social capital in beind them I don't love the "risky" language. Risk goes in both directions. When people save a lot of moneym that risks the money doing nothing or just getting used to minimally improve a rich persons life. You might describe this as "safe", but I think it "risks" a whole lot of people dying in low income countries, or chickens remaining in a factory farm, or misaligned AI taking over because money sat in a bank rather than being spent in a better way. In these cases I prefer the language of "trade-off" rather than risk - we're taking risks/trade-offs with our money no matter what we do. I wouldn't advocate this in the "general EA pitch" or on the GWWCV website, but this might be useful for those of us who are really trying to really optimise what we do with our money.  I don't think the flower children in the 60s is a great para;;e;, because what they are doing is a definite drain on the safety net, not a slight chance like I'm talking about. Also your example talks about a situation where the resources are really finite.  I would also ask whether it is really that much of a "drain" on anyone? If excess money is sitting around in bank accounts, then I draw on it after losing my eyesight and need that money to support my life there's a decent chance no-one is really that much worse off. Not to be glib, but maybe someone buys a slightly smaller house, or goes on a couple less holidays and that's the worst of it. What I really don't like about the individualistic savings norms of today (in high income people) is close-to-zero pooling of risk - everyone saves their own money in case of a rainy day which doesn't happen to 95% of people, and the rest becomes increased generational wealth or gets spent on m
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MaciekZajac
I see your point about the 'risk' language. I think the matter depends on whether/to what extent you find EA contributions to be a matter of universal duty. The more you view them this way, the less speaking about 'risk' here makes sense. This, however, is not a given - even if I myself feel morally bound to contribute to a certain extent, I may not believe others around me have such duties (the duty may derive from the promises I made, my attachment to consistency of my views etc.) And in that latter case obliging them to help me because I sacrificed my savings or the good cause seems not ok. Pooling of risk as you view it would require forming some kind of non-profit insurance entity that would still need to be well-organized/chartered and come with some operating costs. May be worth contemplating for the community as a venture, especially as its charter could include a mechanism for the money being automatically donated when certain risks do not materialize for the contributors.
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NickLaing
Yep I love all this. Some intentional communities have this kind of insurance entity and it works OK. Like you say the amount of goodwill, honesty and trust needed for it to work is pretty large.
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