Ethical investing is becoming more popular these days. A growing number of people are concerned with how their money is being invested and want to know that it isn’t being used to fund activities that they don’t agree with. Why draw the line at investments though?
The ethical approach can extend across a much wider range of financial products including your checking account(s) and mortgage. Want to know more? Read on!
Beyond Ethical Investing: Be More Ethical With Your Finances
Why Ethical Banking is Important
More and more people are wondering what their money is used for once it has been invested. This is often a valid concern but have you also stopped to wonder what happens to the money in your checking account or to your credit card payments? These can also be used for various activities, some of which you may not agree with or support.
Does this concern you? If so, you will want to look for a bank which has a much more ethical approach to your finances. Not all financial institutions have a vested interest in profit making – some are more concerned with helping local communities. ‘Ethical’ or ‘socially responsible’ financial institutions are perfect for those who want to know that their bank cares about the potential social and environment impact on investments and other financial transactions.
‘Socially responsible’ banking is yet to fully take off so if this is something that you are interested in pursuing, you will need to put in a bit more legwork to find these types of banks as they are not so prominent in comparison to ‘regular’ banks. Don’t let this put you off though as it is definitely possible to find banks that operate on an ethical basis.
How to Find an Ethical Bank
As ethical banking is still a relatively new concept, there aren’t that many ethical banks in North America at the moment. Instead, you may be better to look at community development credit unions.
Community Development Credit Unions
(CDCUs): Credit unions are fast becoming a popular alternative to banking with the big names. They operate on a not-for-profit basis so you can be sure that your money will not be involved in boosting the bank balances of bankers and the like. Instead, they exist to benefit local community so they are an attractive prospect if you are looking to engage in ethical banking. There is some definite benefit for you too though – credit unions tend to charge lower lending fees compared to banks due to their not-for-profit policies.
From an ethical banking viewpoint, look for credit unions that have a commitment to supporting local communities. Most credit unions only accept new members if they fulfill certain eligibility criteria (for example, they live in a certain area) but CDCUs tend to be more flexible than this. If you find a CDCU that you feel particularly attached to in terms of the values and work that it is supporting, you do not necessarily need to live in that area to become a member.
If you have decided to back ethical finances, you’re not just limited to ethical investing. Your ethical approach to personal finance can also include your basic checking account and even your mortgage. After all, you have made a commitment to only involve yourself with ethical investment funds, why not do the same for every financial product? This may well take a bit more time and effort but it is worth it to know that you are supporting good causes through your banking and investments.
Prairie Eco-Thrifter does not want to have any regrets in life. Life is a privilege and her aim is to enjoy it as much as possible. Therefore, good money habits, staying healthy, and keeping the planet she lives on alive is critical to her (and you) enjoying a long, prosperous, and amazing life. She likes to try different methods and techniques when it comes to cooking, fitness, shopping, building wealth, traveling, and being frugal and she shares these on her blog.