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There are too different issues impacting us in today’s world: climate change, systemic racism, diversity, healthcare, government, data privacy – really the list could go on!
It’s hard to keep tabs on the issues, and even harder to actually feel like you’re making a contribution in helping alleviate the problems.
It feels insane how much has changed since 2020 started.
I have hope that we will continue to challenge existing systems – whether it is the systemic racism that exists, police brutality, ethical supply chain management, how a company treats its employees, customers, and suppliers.
Business is not conducted in a silo. We all know this. But it is possible to demand change when organizations are choosing to exploit existing structures for their benefit.
Your money decisions CAN make a difference
The work that has started, and amplified this year, needs to continue but it will not be easy.
We all have to do the best we can to make a difference.
Each of these suggestions requires you to start and continue your own due diligence. Whether that’s actively doing work before spending or investing, or just start keeping an eye out for brands and companies that are actually doing better!
In economics/finance, the concept of efficient allocation refers to the idea of allocating resources to their best use. What is the best use of each dollar invested, and how will it generate the highest return?
That concept can be applied to personal finance as well. We can start to question the impact each dollar of spending or investing has on the world around us.
Creating impact with each dollar spent
Each dollar spent creates an impact, and we can start thinking about that impact as more than monetary returns. Your money can be more than just dollars earned.
This could be defined as creating an impact for the issues you feel most strongly about. Whether that’s through donations, purchasing from businesses that from marginalized communities or investing in businesses who typically wouldn’t get funding.
We can each personally define what we think is the best use of our money.
No, this doesn’t mean that we blindly give up the cash we have worked hard to earn, nor is this a free pass to spend more money or make investments that are inappropriate for our individual financial situations.
But rather to be more mindful of the ways in which our money can affect the communities and businesses that we purchase from.
Six ways to use your money as a voice
#1: Donate
Let’s start with the most obvious suggestion. It’s the first thing that comes to mind when considering using your money to affect change.
Choose organizations that you trust, or those that are transparent with how they use the funds they receive. There are lots of charitable organizations to choose from; pick ones that are working on issues that are near and dear to your heart.
#2: Pay attention to the brands you use
We’re exposed to a ton of brands both online and offline.
Today, it is a lot easier to go out and find out whether those that run these companies have political affiliations that we don’t agree with, do they lobby for a policy that is against our own values? Have they put out real statements and are working on changing existing unfair structures in their own industries? Have there been stories from their employees or suppliers that they are using their power unfairly?
There are a lot of questions we can ask the businesses we support, and yes we are asking a lot from the businesses. But businesses only exist because of their clients and customers. Once the clients and customers demand more, these businesses might be more willing to change!
This of course is not the simplest solution on the list, but it will be increasingly important for us to expect more from businesses as the competitive landscape develops.
#3: Support your local economy
There are so many small businesses that make it their mission to try and do good for their local community, by donating resources, or by educating those around them.
Often purchasing from local businesses and suppliers can prove to be better for the environment as well, especially if their supply chains are more transparent.
It can also be the best way to support your local economy!
#4: Socially Responsible Investing (SRI)
There is reportedly greater demand for Socially Responsible Investing. There is also evidence that companies that are more sustainable, make better investment.
Companies that are considered to be sustainable, are those that are actively working to decrease their impact on climate change, working towards a more diverse and inclusive workforce, create sustainable solutions for their impact of supply chains or have better corporate governance systems.
You can either invest in stocks of individual companies that align with your values or through ETFs. If you’re in Canada, you could also utilize services of such as robo advisors Wealthsimple or Questrade Portfolios to help ensure that your portfolio is diversified and matches your risk levels. This guide at Young and Thrifty has some additional ideas for this route.
#5: Peer-to-Peer (P2P) Lending
This is an investment idea that I’ve recently stumbled upon. I have yet to put my money into P2P Lending, but it seems like an interesting idea.
P2P Lending platforms allow individuals to get loans directly from other individuals, cutting out the financial institutions as the middlemen.Often this allows businesses that would not have access to traditional forms of funding to raise small amounts of money to start or continue to pursue their ideas and businesses.
If you are in Canada, Lending Loop is the most popular platform. Here is a review of Lending Loop by Savvy New Canadians.
This of course is a risky form of alternative investment so it may not be an ideal fit in your current financial situation or your personal investment goals.
I personally don’t have any experience in P2P Lending, but the idea of being able to directly invest in another business is intriguing.
#6: Crowdfunding
Crowdfunding is another way of using your money towards products or services you think should make it to market.
Kickstarter is the most popular platform that allows indivdiuals to raise funds for their ideas. Often they would not be able to access traditional funding through banks and financial institutions. If you think that certain ideas or products should be made mainstream, then donating to crowdfunding initiatives can be a great way to help the creators.
Often in return for your donation/investment you receive a gift or the beta version of a product. There is no guarantee that the creators will continue to pursue the idea, which makes it risky. But it can be a great way to encourage small businesses or creators to continue pursue good ideas.
Your Turn
Of course, none of these methods will materially change the world in one fell swoop. But if everyone takes their own first steps, we collectively will be better off!
This list is by no means a permission slip to spend more money, nor am I encouraging you to invest in inappropriate or risky investments. But rather, this list is a way for all of us to start thinking about using our money in a way that can be for good.
The list above is by no means exhaustive, but hopefully there is one thing you can take away to incorporate in your everyday life to use your money as a voice!
If you have any other ideas, I would love to hear them in the comments below!
Cheers,
