But some rough rules of thumb:
* Make a target level of personal consumption you want to meet over your life (we suggest income doesn't have much effect on happiness after $40k, or $60k if you live somewhere expensive, and plus $20k if you have a child)
* First, save enough that you could live for 12+ months with no income. This covers you in emergencies and career changes.
* Then save a decent fraction of your income to maintain this level of income in retirement (at least $6k per year to be able to have $40k per year at retirement).
* Always donate a small amount (say several percent) to keep in the habit of giving and learn more about charities.
* After you're meeting your saving and consumption targets, you can donate most of the remainder. Or if you're not sure where to give right away, then put it in a donor advised fund so it can be donated later.
Beyond this, it can vary from person to person, depending on how risk averse you are, how much you're prepared to sacrifice in order to do good, and how urgent you think it is to do good now rather than later. It gets complicated. e.g. if you don't think it's urgent to donate, then you might want to take care of retirement savings first, then donate later.
Some more discussion: https://80000hours.org/articles/should-you-wait/
Huh? Are you guys based in the United States? Did you pull that number out of your ass? Do you know the difference between "diminishing returns" and "doesn't have much effect"? In the vast majority of the United States where the median income is $40k and above, it won't actually be enough to meet what most people on HN would consider basic needs - housing, healthcare, food and some savings for retirement.
> First, save enough that you could live for 12+ months with no income.
An impossible task for the majority of Americans. Again, I'm not sure where you are based, so this is forgivable.
> Then save a decent fraction of your income to maintain this level of income in retirement
You're telling people who are earning $40k to save $6k and meet their living expenses on $34k. While that may be possible in some areas, these areas tend to be the ones where $40k jobs are at a premium and are not available for the majority of the people there. See my first comment.
> Always donate a small amount (say several percent) to keep in the habit of giving and learn more about charities.
Donating money while earning below median income nationwide is an advice so terribly inane, it doesn't warrant a response. You're always better spending that amount (minus the marginal tax rate) on yourself or your family, especially at the levels of income you're suggesting.
> After you're meeting your saving and consumption targets, you can donate most of the remainder.
Which for most Americans would be never. You have to step out of your bubble and look at some BLS numbers if you want to give economic advice.
And then even more detail here: https://80000hours.org/articles/money-and-happiness/
It's $40k of consumption. So if you'd want to save $6k as well, then you'd need to earn $46k.
Our advice is addressed at college graduates. The average grad makes $68k p.a. over their lifetime. (Source in the first article I linked to).
If you're reading HN, then it's likely you can earn more. The median software engineer makes $100k, and similar with other tech jobs (that's from the BLS).
I agree it's much harder to give money if you earn below the median income in the US, though it's hardly impossible. The average low income American already gives 3% on average (source in the OP), so my 1% is actually less than the average.
Moreover, almost everyone in America is far wealthier than the world median. Even if you only earn $10k, you're 7x wealthier than the world median. Source: https://www.givingwhatwecan.org/get-involved/how-rich-am-i/ (That's PPP adjusted)
So while I agree if you're poor in US it probably wouldn't make sense to give to other poor in the US, it could still be worth giving to the global poor.
If I lived in a society with socialized, efficient, good healthcare, a guaranteed standard of living for everyone, and a legal system that provided competent, free legal assistance, I would have no problem giving a big chunk of every paycheck to charities. Until then, I have no guarantee I won't become seriously ill tomorrow, blow through my meager 5 digit savings in less than a week in a hospital (even with insurance), and then die on the streets hungry and disabled.
Let me be more specific: if a person makes $300k/year they may be willing to give away 50% if they know it is going to last 40 years. However, if the job could go away tomorrow and they may end up with a $100k job for 40 years, they will want to have saved some of the money for themselves.
Is there a good framework to think about that situation?
I read a statistic that 50% of Americans will find themselves earning in the top 10% at least one year of their lives.
We just don't know how long it lasts. When should one give it away?
p.s. great superman comic in the beginning. makes the point very succinctly.