13 Jun 2021

Money as a force for good

My Money A Force for Good

by Betsy Westcott of Ladies Finance Club

Growing up I always thought to be able to wield any power with your money you needed to be mega wealthy - like Bezos, Gates, Rinehart and Forrest wealthy. I wasn’t completely wrong in my thinking. Having billions of dollars to splash does give you a lot of power to change the world around you but actually we all have some power when it comes to our money and, if we choose to do so, can use our money as a force for good.

Every time you spend money, you’re casting a vote on the kind of world you want to live in
- Anna Lappe

I think the sustainability advocate Anna Lappe put it best when she said, ‘ Every time you spend money, you’re casting a vote on the kind of world you want to live in’. That is a powerful thought, isn’t it? I also think it’s an inspiring thought. One that inspires me to reflect on ways to use my money as a force for good and I wanted to share them with you.

Invest in alignment with your values
Now, before you skip ahead because you’re thinking ‘I’m not an investor’ just stop and tell me do you have a superannuation account? Yes? Congratulations, you’re an investor!

That’s right, that money in your superannuation fund (super fund) is yours albeit you can’t really access it until you’re ready to retire. That money is typically invested in a mix of assets like shares, bonds, property and cash making you an investor. The exciting news is that can choose where and how it’s invested.

Obviously, the primary objective for most of us is to find a super fund that has low fees and good returns so we can grow our wealth – that’s absolutely important. Increasingly many Australians, particularly millennials, are also looking to ensure that this money is being invested ethically. According to research by environmental finance campaigners Market Forces, 86% of Australian’s believe super funds should be more transparent around where their contributions are going and two thirds believe that their super fund should be proactively reducing its exposure to fossil fuel investments.

Now ethics is a subjective topic and the definition will vary between individuals. Broadly speaking, those looking to ensure their retirement nest egg is being invested ethically want their money to be invested in things like clean energy, sustainable products, medical solutions, innovative technologies, health care, responsible banking, recycling, education and aged care. They typically want to avoid their money being invested in industries such as fossil fuels, weapons, tobacco, logging, gambling and in organisations that make harmful products or abuse human rights.

Most super funds now offer an ethical or socially responsible investment option to their members. Other super funds like Australian Ethical Super and Christian Super have gone so far as to be certified ethical by the Responsible Investment Association of Australasia (RIAA). Check out this article from Choice for further reading.

So how do you know what your super fund is invested in and if it is aligned to your values? Check your super statement to see how your money is being invested, read up on that fund on their website or call them up and ask them directly.

If you do decide to switch to an ethical or socially responsible option do your research first. Don’t forget that when choosing your super investment options it’s important to take into consideration your age, your risk tolerance, the fees and your personal values before making a decision. If in doubt, seek advice from a suitably qualified professional.

Become a Conscious Consumer

A conscious consumer means you are mindful of how your purchasing decisions impact the environment, society and the economy around you. Being a conscious consumer allows you to contribute to changing the world in a practical and meaningful way. By embracing this power, you can make the world a better place one purchase at a time. And don’t worry, you can be a conscious consumer even on a modest budget.

Here’s some ideas:

• Buy locally, buy small 
You’ll not only stimulate the local economy but you’ll reduce the emissions associated with the transportation of goods and packaging as well as enhance the sense of community. This also gives you an opportunity to get to know the people you’re buying from and how they do business. I also like the idea that every time I buy from a small business someone somewhere does a little happy dance.

• Look for products with sustainable certifications – research the origins of the product, how it’s produced and assess the packaging Before making a purchase. Look for certifications like Fair Trade, B Corp, Cruelty Free, Guaranteed Fair Trade, Green Tick, Carbon Free, Forest Stewardship Council, Rainforest Alliance, Global Organic Textile.

• Reduce, Reuse, Recycle 
Challenge yourself to think twice about your shopping habits. Embrace a minimalist lifestyle to not only save money but live less wastefully. So aim to buy quality products instead of quantity, try to repair items before you replace them, pause before a purchase and decide if it’s simply something you want or actually need and look for items you can recycle easily.

Being a conscious consumer isn’t about being a perfect consumer. It’s about taking many small actions to make a difference. If more of use make small changes to our consumption, it will add up to big change for the planet and society.

Be charitable
In Australia there are roughly 57,000 registered charities addressing a broad range of issues, from fighting extreme poverty and human rights advocacy to tackling the climate crisis and wildlife conservation, according to the Australian Charities and Not-for-profit Commission. By donating to charities you believe in you can help them continue their important work. Furthermore, giving makes you feel good. It’s just another way you can create impact with your money and use it as a force for good.

Better still, if those charities have DGR Status (deductible gift recipient) then cash donations >$2 can be claimed as a tax deduction.

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