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How to be an ethical consumer and save money

Whether you want to change the world or just reduce your impact on it, it seems more and more of us are considering the provenance of what we buy and how it’s produced when making purchasing decisions.

And the best news is that spending ethically and saving money are not mutually exclusive – in many cases you can do both!

Whether you’re already a seasoned ethical consumer, or just starting out, here are some things to think about the next time you’re faced with a spending decision.

What is ethical consumption?

Sometimes called ethical purchasing, moral purchasing, ethical sourcing, ethical shopping or green consumerism, ethical consumption involves buying products, or spending on services, that aren’t harmful to the environment or to society.

That can mean avoiding spending on products or supporting producers who violate human or animal rights, cause environmental damage, support undemocratic regimes, or the manufacture of nuclear power or weaponry.

If you’re thinking ethical, think environmentally friendly, recycled, sustainably sourced, Fairtrade, organic or free range.

Ways to spend your money more ethically

While quality, price and customer service are all important factors when making decisions as a consumer, if you’d like to spend your money more ethically, consider the following:

  1. Avoid unnecessary consumption

We’re probably all guilty of impulse buying from time to time or of buying things we want as opposed to only those things that we actually need.

But with the amount of waste being produced in Australia increasing by nearly 8% each year, and our waste growing at double the rate of our population, curbing our consumption is becoming more crucial1.

What’s more, reducing your consumption can also be good for your health and happiness, and buying less will save you money.

Some ideas on how to do this include:

  1. Do your research and read the labels

If you’re concerned about where products have come from, what they contain or how they’ve been made, take some time out to do some research.

Websites such as Shop Ethical! rate products according to how ethical their producers are, taking into account a number of factors, while downloading apps like Good on You make it easy to check product credentials when you’re out and about.

Product labels themselves also feature a lot of information about contents and origins, and many ethical organisations have also created labelling symbols which provide an at-a-glance guide to whether a product is ethically sound.

  1. Limit the packaging

When it comes to ethical consumption, it’s not just what you buy, but how you buy it that matters. For example, buying a Fairtrade coffee in a disposable cup or wonky, seconds fruit and veg in single-use plastic bags doesn’t do much for your ethical street cred.

So say no to excess packaging, and save yourself money in the process – Responsible Cafes offer discounted coffee to those using reusable cups and with the major supermarkets set to phase out single-use plastic bags from July 1 this year, taking your own reusable bags will save you on bag fees.

  1. Shop second-hand

Aside from being mindful about what you buy, what products are made from and what they’re packed in, think about where you shop.

By buying second-hand from op shops or from online marketplaces such as Gumtree, eBay, Trading Post or specialist websites, you can give used products a second life, save stuff from ending up in landfill and bag a bargain all at once!

  1. Look beyond traditional products

Ethical consumerism isn’t just about the food you buy and or the clothes you wear. Think about choices you can make around services you use too, such as your electricity. Many electricity retailers now offer green power options, though these can be marginally more expensive than traditional energy sources.

You can also opt for ethical choices when it comes to your investments such as the money you have in your super fund.

Remember the flipside

The other side to ethical consumption is disposing of your waste in an ethical manner. Do you try to reuse, upcycle or at least, recycle?

Donating to charity shops, taking advantage of in-store recycling schemes – such as the REDcycle soft plastic recycling scheme in Coles and Woolworths supermarkets or H&M’s in-store clothes recycling – and composting your own food and garden waste can all help.

Whatever your motivation for spending more ethically, remember that nobody’s perfect all of the time, but you can make a difference by changing a few habits.

Source: AMP.

1 Responsible Investment Association Australasia, From values to riches: Charting consumer attitudes and demand for responsible investing in Australia 2017, pg. 6, figure 2.

2 Responsible Investment Association Australasia, Responsible Investment Benchmark Report 2016.

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Paul Baggetta is the Founder & Principal of Baggetta & Co (ABN 68 786 233 813).

Paul Baggetta has been a Taxation Accountant since 1981, a Financial Planner since 1998, and in 1993 qualified as a Real Estate Licensee, holding a Triennial Certificate (currently not trading) and operated his own Real Estate business for property investment clients for over 5 years as a second business.

Financial planning services are provided by Paul Baggetta as an Authorised Representative (No. 261469) of Capstone Financial Planning Pty Ltd. ABN 24 093 733 969. Australian Financial Services License No. 223135.

 

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