There are times when adhering to your ideals is cost-efficient. For example, many of the things you do to live in a more eco-friendly manner are also things that happen to save you money. You can live more sustainably and come out ahead at the end of the month.
Not everything is like that, however. There are times when your ideals can cost you money. Sometimes, you pay for something because you believe in it — not because it’s cost efficient.
Giving to Causes
One of the biggest examples is giving to charity. If you believe in a cause enough to give money to it, you aren’t likely to derive any benefit out of it. You can get your money back if you buy energy-efficient light bulbs or invest in a smart thermometer.
Giving to a cause you believe in that doesn’t provide that kind of monetary return. The money is gone, and you can only hope that the people that run the charity will use the money well. (This is one of the reasons that I’m such a big fan of local charity, as well as sometimes donating to larger organizations with good ratings on sites like Charity Navigator.)
Socially Responsible Investing
Another way that you might end up losing a little more — or at least seeing smaller returns than you would have otherwise — is through socially responsible investing. Many people like the idea of only investing in companies and funds that reflect their ideals. However, in some cases, these investments don’t pan out. You might end up losing money because you invested in a clean energy company that isn’t off the ground yet, instead of in an oil company.
In some cases, you might see gains, but they might not be as big as otherwise. Some mutual funds that focus on socially-responsible companies charge higher expense ratios and other fees. You might end up with a lower ROI just through fees. If it’s important to you to invest where your ideals are, this isn’t the end of the world — as long as you can afford it.
Buying More Expensive Items
Unlike more expensive thermostats that eventually pay for themselves, there are some things that are just more expensive. What happens when you buy more expensive foods because it’s “whole” or for some other reason? What about buying products that are eco-friendly or produced in an eco-friendly manner, but that cost less? There are lots of examples of these kinds of purchases, and you might not get a corresponding increase in true quality.
The argument can be made that when you buy organic food, you are going to be healthier, and that is a benefit that can save you money down the road, but the reality is that there aren’t conclusive studies that say buying organic makes a significant difference in your health. You might also run into similar issues when you buy products that are made according to ideals. They might just be more expensive, without providing you with any other benefit beyond the warm fuzzies.
If you can afford these things, and you would rather see your money go toward things that are in line with your values, it’s not really a problem. However, if you are getting in debt as a result of the choices, it might time to re-think your decisions.