How good is your money? Not how many notes you can throw it the air at one time, or even how high your interest rate is necessarily – but just what ‘good’ is it doing out there? Huhhh?
Well, turns out, some banks, insurance and pension providers are more good than others. As in, some use your hard earned cash to fund arms and fossil fuels, and others support charities that are actually making the planet a better place. Yup, you might well have 50p in your account right now, but that small change could be funding things that you are not all about.
If all the above (and frankly just the term ‘personal finance’ itself) makes you a little pale, fear not – the lovely Lisa Stanley, co-founder of personal finance blog Good With Money, will crunch it down for you without breaking a sweat (hopefully neither you nor her).
But for Lisa and the other girls at Good With Money, it’s about high-fiving your pocket, people and the planet, because caring about what your cash is being spent on doesn’t mean you have to be skint! (Phew).
Hi Lisa! Tell me a little bit about you.
I’m a worryingly-close to 40 mum of two crazy boys. I moved to Bristol in 2008 after doing the London thing for 10 years. Don’t miss it one bit. I then spent five years working in Comms at the Bristol-based ethical bank, Triodos, and left there last summer, setting up Good With Money with Becky who I knew from London when she worked on The Times. Independently, we had both been wondering why there wasn’t a dedicated consumer website for the growing area of ‘good money’. So we created one, and launched last October.
What does it mean to be good with money?
Being good with money means getting the best deal on your finances, without unknowingly harming the rest of the world. Contrary to what The Wolf of Wall Street might teach us about money and morality, you don’t have to be bad to make money. Capitalism isn’t inherently evil. There are ways to avoid detriment to developing countries, poor people and the planet and still be rich. Ethical businesses include John Lewis, Ikea and Apple: hardly minnows in the profitability stakes.
We all know there’s plenty of stuff around teaching us how to save money, and plenty on how to make it, but there’s never really been anything helping us do either of those things in a way we can be proud of. Our website is about helping you become good with money while doing good with money too. We also show that making good-for-your-pocket financial decisions that are also good for people and the planet doesn’t mean you have to lose out personally.
Are organisations that are good with money more expensive? Can I afford them?
Quite simply, anyone with money to spend or save can be good with money. It’s a myth (perpetuated by those organisations who are less ‘good’ with their customers’ money) that being good with money costs more. The ‘ethical premium’ myth is rubbish. There is often very little premium for green energy, ethical insurance or sustainable investments. Sometimes none. Sometimes they are better value or more profitable.
How do I find out if my bank, building society or other financial provider is being good or bad with money?
Take a look at Good With Money, ha ha! We want to change the way people choose financial deals, so that price, while important, is not the only consideration. We aim to shine a light on good practice and help weed out the bad. This could mean finding a savings rate that is above the average market rate from an ethical provider and highlighting the extra amount in pounds and pence you could make by switching to it, or the amount you could save by moving to a 100% renewable energy supplier – you won’t know this from the price comparison sites, but many green deals come in cheaper than standard ones.
What about things like investments and pensions, should I be worrying about these things now?
It’s pretty hard to think about pensions in your twenties or when you’re just finishing uni – I know I didn’t. You’re probably in mountains of debt, so the thought of tying up your money for 50 years does seem a little far-fetched. We don’t even know whether we’ll still be part of the EU in two weeks’ time, never mind what the world will be like in 50 years when you reach retirement!
What you can be sure of is that money, or buying power (cash, barter, bitcoins) in some form, will probably still be essential. It’s easy to get bombarded by all the marketing from pensions and investment companies – hey, even the Government is about to automatically enrol all employees into a pension – telling you you must have savings set aside for the future. Being over-marketed to is not one of my favourite experiences and I’m sure it’s not on your top 10, either.
Luckily, there are a number of new breed financial companies who are disrupting the status quo and launching products that are exactly what younger people need. Moneybox, for example, is an app that rounds up money spent on your debit card in shops, coffee shops, travel, wherever, and then puts in an ISA for you so you don’t even need to think about it, but you’re growing your savings pot little and often. Yep. Pretty neat.
What about mortgages, can I get a good one of those?
If you’re lucky enough to be in the position to take out a mortgage, choosing and being accepted for one is complicated enough. But thankfully, considering it’s the biggest debt you’ll ever have, there are some ‘good’ mortgage providers. Phew. Do bear in mind, though, that criteria can be so exacting that you might not be lucky enough to have your pick of deals. Given that, it can be hard or bloody impossible to try to bring your conscience into the equation too. But lending to the housing market is one of the pillars of UK banking, so if you have a chance to vote with your heart, then do. For example, you could choose a building society or a challenger bank over a high street bank such as Barclays or HSBC. Rates and terms at such organisations are often competitive and it means you can feel that little bit better about what your money is funding.
BTW, if you’re in the market for a first / new home, do check out our new ‘good’ mortgage comparison tables.
Are there any organisations you consider to be particularly outstanding with money?
In each financial product area, there are some corking examples. For investments, the peer-to-peer lender Abundance is pretty cool. You can invest directly in a range of projects – such as renewable energy – which offer social and environmental benefits as well as a long term, bank-rate beating income. For savings, the Moneybox app mentioned above is set to really shake up the market, and I love the concept. Sadly, their underlying funds aren’t yet the ‘greenest’ available but I’m sure that’s coming. Then there’s banks like Triodos and Charity Bank, both of which only lend their savers’ money to businesses or charities doing something good for the planet or society. And Triodos is planning to launch a current account in early 2017, too. Sign me up.
Financial jargon. Can you explain a few key terms?
Eugh. There’s a reason we’re all so turned off by money and none of us bothers to think about what happens to it once it’s paid into our bank account. Despite increasing input from the regulators, old school financial companies have become experts in befuddling and confusing us. You only need look at recent scandals such as PPI (misselling of payment protection insurance). There’s waaaayyy too many terms to explain, so I think I’ll save that for a separate blog. In the meantime though, check out our friends over at Fairer Finance, a site set up to cut the crap when it comes to financial jargon and confusing T&Cs.
Are you good with money? Why / why not?
I’m as good with money as I can be. The Good Money Girls are ethical with a small “e”. Because ethics are subjective – and in a world where it is (frankly) bloody hard to be perfect, what is most important is just to try. Of course, I would love to do more. But equally I don’t want to be all smug about it. It’s not about being signed up to every ‘ethical’, sustainable or green financial product going – sure, it’s possible, but probably not that realistic for most of us. Instead, every little thing we do to question the use of our money for good or bad is being good with money. I will say, though, the more I learn, the more I want to make my money good!
What can we do today to be better with money?
Well, as above, start by questioning how any money (or borrowings) you do you have is used. What happens to it once it lands in your account. It doesn’t just sit there. Your bank or financial provider will be doing something with that money, and you want to be sure it’s doing something good for society and the planet, right?
But the easiest thing to do – obviously – is to check out Good With Money…we’ll help you work out how good your money is and how you can make it work harder – for your pocket and the planet. If you want to really get into it, you could read start by reading our Little Stars contributions (thanks, Susty Girl!), or even complete a Good Money MOT where we’ll have one of our Good Money Expert IFAs review your financial products, point out the good and less good, and give you some suggestions as to which good products could be right for you.