What you do with money says a lot about you.
This is a point made frequently by behavioural finance experts, concerned with how psychology affects personal finances. We have learned, for example, that those with stingy or profligate parents are more likely to have negative associations with money and may often find themselves repeating unhelpful patterns.
However less focus is given to how our money reflects our values. This is because there is a large wall of ignorance between us and an understanding of what our money is doing out there in the big bad world.
For the eco-minded, this is a knowledge gap worth filling.
Take note: if your food is organic and free range, you holiday by train to agricoles in France and your clothes are Stella McCartney or second hand vintage, then you should probably sit down and revise your banking, saving and borrowing too.
Money is power, after all. And for each of us individually, our monthly income and how we spend or save it, no matter how small the amounts, creates an impact that can go way beyond putting the recycling out (although that, of course, is important too).
Thanks to some disruption of the financial services industry by a host of start-ups for whom people and planet are as important as profit, there are more money options for the eco conscious than ever. And you don’t have to compromise on good value, either.
Here are 9 hugely practical quick wins to make your money greener.
- Avoid the big banks, full stop
Large multinational banks, such as Barclays and HSBC, tend to invest in everything that they think will make a profit, regardless of its impact, from coal mining to oil extraction to shale gas (especially that last one). So if you bank with one of them, your cash is on the wrong side.
Thanks to the growth of challenger banks, such as Handelsbanken and Virgin Money, you don’t need to stick with the big boys to get a decent current account. Some even newer, nicer banks, such as Tandem and Triodos, will soon launch current accounts. Leaving your bank is incredibly easy. Do it.
- Building societies and credit unions are your friends
Besides some of the more ethically minded banking challengers, building societies and credit unions are straight forward lending and saving institutions – no investment banking funny business – often with a local focus (although large building societies, such as Nationwide, Yorkshire and Coventry, offer products nationally). They can be as competitively priced on mortgages and savings as the banks, although service is not always as whizzy.
Credit unions are local people lending to other local people who need to borrow. In what are hard times for many people, they breathe life into local areas. Many members find themselves both lending and borrowing at different times throughout their lives.
- Ditch rate tarting, think long term good value (tortoise, not hare)
A general approach rather than a specific action… but one of the unintended consequences of “short termism” (prioritising profits or savings over a short time period) for companies and individuals is deprioritising consideration for the environmental or social impact of a decision.
Martin Lewis is a great money saving expert, but you can’t always go for the cheapest deal if you want your money to be part of the solution. Nationwide, Co-operative Bank and Handelsbanken are among the providers who like to keep rates sustainable.
- Switch to a green energy tariff
There are now six 100% green electricity tariffs on the market, including Bulb, Octopus Energy, M&S Energy (Anyone switching to Bulb at the moment can get a £50 credit using this link). Some of them are genuinely cheap and if not the absolute cheapest on the market, then not far off.
Picking one of these instead of the absolute cheapest will be good for you and the planet – renewable energy tends to be more secure, with greater price stability, than energy generated by fossil fuels.
- Invest in local community initiatives
Community-owned shares are stepping in where local councils are backing off, using funds from locals and investors from further afield to kick off anything from community farms to solar parks.
Such investments are risky, however, and while projects will quote an expected return that can look attractive, it might be difficult to sell your shares. So this is the kind of investment you make because you want to support a local initiative, rather than to make money. Buzzbnk, Ethex and Microgenius are good places to browse projects.
- Make your home energy efficient
The original save carbon, save money trick. Most UK property languishes at around a D on the energy efficiency rating scale. Insulation is the first thing to check off the list. Then windows. Big upfront cost, long term savings.
Could you have solar panels fitted? IKEA sells them. Over 20 years, IKEA reckons the return on your panels will equate to an annual 6.1 per cent. You can get domestic battery storage for solar power now, but everyone is waiting for the UK launch of Tesla’s Powerwall.
- If you invest, pick sustainability themed funds
Total no brainer these days for your own stocks and shares ISA and children’s junior ISAs. Why? The returns are no better or worse than mainstream funds. The Good With Money experts like Alliance Trust Sustainable Futures, Pictet and WHEB Sustainability.
- Use local currencies
You can only do this if you live in an area with a local currency, such as Bristol, Brixton or Totnes. These counter social exclusion, have a positive environmental impact, support the SME economy and democratise access to services, according to the New Economics Foundation.
- Donate to green charities
This is a pretty obvious one, and while it won’t earn you an annual return or save you any cash, charity giving to causes that protect the planet, such as Friends of the Earth, Greenpeace or WWF, is rewarding in many other ways. And a little monthly direct debit from you goes a long way for them.