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Taking action to incorporate more sustainability into your life may sound like a great idea. But then you start reading about reusable toilet paper and think there must be an easier way. There is: By making a few set-it-and-forget-it money moves, you can rest assured your money is being sustainably spent and invested. Read on to find out the simplest ways to spend your greenbacks the way you usually would—just greener.
1. Choose a Green Bank
Banks use the money you deposit to lend to other customers with the hopes of making a return. The bank customers doing the borrowing might include businesses in industries you may not want to support, such as the fossil fuel industry. Green banks offer an alternative: They typically do not invest in fossil fuels and instead invest in other social goods like reforestation projects.
You can check your current bank's record or look around for a new bank on sites like Bank.Green, Mighty Deposits or Bank for Good. These sites gather information and assess whether banks are behaving in an environmentally responsible way so consumers can easily make a decision about where to keep their money.
Similarly, Clean Energy Credit Union is a unique credit union that offers green banking and loans intended for financing clean energy projects such as solar electric systems and electric vehicles.
2. Opt for a Payment Card With Green Perks
Some credit and debit cards have green perks, such as the promise to plant a tree every time you make a purchase. For example, Beneficial State Bank credit cards make it possible to earn rewards and donate directly to environmental nonprofits when you make a purchase. Another example, the Treecard, is a debit card you can use with your current bank that helps you plant trees with every swipe and is sustainably made out of wood and recycled plastic.
Thinking about the material of your credit card is an important step toward better sustainability in your financial life. In fact, the plastic from credit and debit cards is a major source of waste, with over 6 billion payment cards floating around in the world. More and more companies are opting for more sustainable materials, such as metal.
3. Buy Green Bonds
Green bonds pack a financial punch for contributing to climate-friendly projects. One of the early issuers of green bonds, the World Bank, has issued about $17 billion worth of bonds since 2008. Green bond funds like the Calvert Green Bond Fund are packed with assets in renewable energy and green buildings.
You can invest in green bonds just like any other type of bond by:
- Going through a broker
- Buying directly from the bond issuer
- Investing in a fund
If you have a financial advisor, they should be able to point you toward green bonds that might suit your needs.
4. Invest in SRI/ESG Funds
Your brokerage and retirement accounts likely have options to make socially responsible investments (SRIs) or invest in environmental, social and governance funds (ESGs). These funds may contain only stocks from companies that align with your values.
With a 401(k), you may be able to hand-pick socially responsible options if you have a brokerage window that lets you choose some investments. With IRAs, you may be able to invest in ESG mutual funds, exchange-traded funds, index funds or even individual stocks.
You can also sign up for green robo-advisors such as Betterment's Climate Impact Portfolio.
5. Swap Your Utilities
Depending on your location, you may be able to swap some utilities to more sustainable options and keep paying a similar bill.
For example, CREDO Mobile is a mobile virtual network operator on the Verizon network that channels nearly $2 million of profits each year into climate justice, economic justice and civil rights causes. Customers can shop plans comparable to more well-known networks and purchase phones from CREDO knowing that they are supporting causes championed by CREDO.
Purchasing electricity from renewable sources is another way to make your dollars go toward sustainable endeavors. More than half of U.S. consumers have this option through their power supplier, according to the U.S. Department of Energy. Using "green pricing," for example, some utility companies allow customers to pay a small additional charge for electricity generated from more renewable resources.
Sustaining Your Finances
In addition to changing the products you buy and how you consume them, you can also think through the ways your money can impact the world around you. The actions outlined above may be just the tip of the iceberg, however. There are myriad ways you can make an impact by spending, donating and banking in an environmentally conscious way.
As you manage your finances, remember to ensure your emergency fund, retirement savings and other financial goals are on track for your future. Keeping an eye on your credit report and credit score are also key ingredients in financial success.