When you think about buying something — a plain ol’ shirt, for example — what’s your thought process? How do you decide what shirt to buy? Maybe you think, “I don’t want to spend over $20 on this shirt.” Or, “I need it fast, so I need to buy it online from a store that offers free two-day shipping.”
How often are you thinking, “I need a shirt that’s sustainably and responsibly made from a locally owned clothing boutique”?
This is an example of using your money to make an impact. Every purchase you make has a ripple effect. That’s why it’s important to understand that impact. In our newest episode, Dustin and Joseph discuss the idea of “voting with your dollars” — what it means and how you can start practicing it through spending and investing.
Let’s go back to our hypothetical shirt situation.
We buy the shirt from Amazon because it costs ten bucks and it’ll arrive tomorrow. With that purchase, whether consciously or not, we’re choosing to support a big corporation over our local clothing shop down the street. A big corporation that doesn’t even need your business.
Meanwhile, mom-and-pops go to great lengths to compete with giant companies like Amazon, for example. They’ll match the price, even if they have to show a loss. They just want your business. Sad, right?
The truth is, though, that we are choosing to ignore how that shirt from Amazon is made; many workers in the fashion and textile industry suffer from labor abuse and unethical practices. (Just listen to Episode 80 with Stephanie Hepburn to learn more.)
We’re not trying to guilt trip you, promise. This is just to illustrate the fact that, in our culture, cheapness and convenience often motivate our decisions to buy stuff. If you want to start spending your money differently, you have to be more mindful of what you’re buying.
How do we start changing the way we make purchases? Think of everything as an investment.
This quick little thought process can help us buy quality clothing over fast fashion. An electric car vs a gas car. Organic food instead of cheap, unhealthy food.
It can even influence how we buy replacements for things we already have, like a busted TV or a phone. Decades ago, we’d hire someone, maybe a local handyman or specialist, to repair a broken device. Not anymore.
It’s usually quicker, and costs you less money and less time and stress, to just ‘buy a new one’ of something. Cheapness and convenience strike again.
We may understand the factors influencing our purchases, but that doesn’t make it any easier to change. As Joseph put it: “We’re less likely to change our behavior because, ‘well, I already paid for the Prime membership this year, so…’”
But we can change for the better.
It’s not all doom-and-gloom, folks. You can begin investing and spending your money the way that you want. Change takes time, so you shouldn’t expect to get rid of any bad spending habits all at once.
One thing you can do is be more selective of the businesses and organizations you support with your dollars. Research companies before you buy from them. Practice ESG (environmental, social, and governance) investing.
You can invest in “regular” stocks, watch your wealth grow, and see businesses change in response to their shareholders’ behavior. Or, you can focus on “impact investing,” where companies address certain social or environmental needs through special stocks or funds
Either way, ESG investing isn’t that hard. And the benefits are two-fold: you can grow your wealth and know that your money is supporting your values. Change can happen, but it has to start within each of us.
As Dustin put it: It’s not always just about profit, cheapness, and convenience. We can live in the world that we want. But we have to change the way we spend our money, how we outline our budgets, and the way we invest.
This material is for general information only and is not intended to provide specific advice or recommendations for any individual.
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