Shopping Locally and Banking Locally: Thinking Long Term

Shopping locally is a good (but not always easy) choice.  Do you know any numbers behind it?  What happens when you buy and invest dollars locally?

Aside from the act of investing more of my time with local people at local events, today I thought I’d explore the act of investing and spending dollars in a small town.  

Window Shopping: The Local Stroll

Window shopping is a very enjoyable activity when your town actually has stores on its main street.  As many of you know, malls are becoming ghost towns.  And if you don’t purchase items locally, your town could become a ghost town too.

Despite knowing this, like many people, I’ve continually felt the tug between shopping locally and finding the same item cheaper online.  I'm trying to lead a frugal life to build freedom into my artistic ventures, but I don't want to contradict the values in my songs.

What's a frugal creative to do?

Finding a good deal versus supporting local businesses is not a personal problem that can be solved all at once. (In this article, I’m trying to take as much responsibility as I can while reflecting on my choices.  I'm certainly not claiming to have the problem solved.)

I try to approach this issue with a long view (I love the ambiance of the stores down the street and want them to stay there) and a short view (if someone thinks they can charge $25 more for the same shoes I can find online, that’s a bit crazy)

In many cases, I buy the local version first.  If I enjoy the item, then I buy it next time online and split the difference.  Not a perfect solution, but I am trying to put some thought into it.

Business Statistics: A Motivating Solution?

Sometimes I try to increase my motivation to do the right thing by looking into statistics and increasing my knowledge base.  For me, statistics take the emotion and judgment out of an issue while trying to reduce it to facts.

Where does money go when you spend it locally verses at a chain store?

This is a question I popped into Google out of curiosity.  I found facts like this:

  • On average, 48 percent of purchases at local businesses are recirculated locally.  In contrast, less than 14 percent of purchases at chain stores are recirculated locally. 
  • This means an independent business returns more than three times per dollar of sales than a chain competitor.

(More facts can be found in this article.)

Avoiding Chains At All Costs?

Intuitively aware of the above facts, I avoided chains at all costs in my 20s.  I lived in our current small town for over a year without going in the Walmart.  I eventually lost sight of my die-hard vision in a scurry to save money when my husband and I had unstable jobs and a mortgage. 

Bringing a child (and more chaos) into our shopping picture, I became like a wish-washy adult with my idealism flag deflated and my cart full.

Now, with a cushion under us and short-term thinking at bay, I’m fully aware of how it sometimes makes sense to spend more locally and it sometimes makes sense to go to a chain store.  

Armed with a little bit of knowledge, my choices are at least informed.  I’m doing the best I can.  Consequently, I aim to buy local (or from distant companies that are ethical).  When I can’t, I hope some young idealistic person is out there somewhere judging me.  They should.

LITERAL Investing (and Hometown Banks Being Bought Out)

Aside from shopping locally, I’d like to add a tie-in about the overlooked role of local banks in local economies.  

A lot of trends are working against small towns like mine.  In short, rural America is struggling if you look at any modern statistics.  Areas like this simply don’t employ as many professional people. Oftentimes, the talent base flees.  

When my job (and my husband’s job) were incredibly fragile a few years ago, we thought about “hopping online” for our careers so we wouldn’t have to move. 

Luckily, our jobs became more stable.  And now we have the strange byproduct of gaining money and career knowledge from our odd little scare.

One thing I learned more about is big banks. 

I keep getting offers in the mail for a 2.36% APY account with CITI, but I like the experience of my hometown bank instead.  I don’t mind taking the hit. And I’m not looking around with anxiety for a “better deal” anymore.

Banking Locally: Here’s Why

Economic development (for cities both large and small) is impacted by the business moves of local bankers.  These people serve on boards and are local spokespeople for ideas that blossom or die out when it comes to new real estate, businesses, and development.  

In other words, their personal fortunes are often tied to how well the town is doing.  Does the CEO of CITIBANK care how my town is doing? Probably not.  

It’s just something to think about.  Here’s a podcast that explains it better.  

“A lot of rural areas still have small-town banks.  A local bank is a huge asset… In 1997, the average urban market had 21 community banks and 6 large banks in the market.  In 2017, the average urban market had 18 community banks and over 8 large banks. Over this same time period, rural areas have stayed stable with around 4 community banks.”

Where It’s At

On what issues can I be bought?  And at what price? 

I’ve mulled over the issue of shopping locally for years as someone attempting to be a conscious consumer.  The reality is - I am financially responsible for myself and my family.  I am also responsible for my community. 

These two realities should be able to work together, right? Modern life isn’t so strange and dire that the family unit has to make decisions at the expense of the local community, correct?  My pocketbook can improve at the same time as my neighbors, right?

When it comes down to it, I absolutely love the store-fronts in my small town.  I also love walking through the bank drive-through.  (Sometimes they even give my dog a biscuit.)  Daily, I walk downtown with my dog just because I love seeing the streets full of people.  

What are your thoughts about investing and spending locally?  Do you have situations in your life where you shop locally even if it costs more?

7 Replies to “Shopping Locally and Banking Locally: Thinking Long Term”

  1. i suppose we buy local but bank online. i was happy to have a local bank (first niagara) and make a little less but they kept botching things up. i remember i wanted some cash for a trip and they didn’t have any $100 bills! you’re a bank branch! i almost went ballistic, but just switched to ally instead.

    we really only buy food and wine. my friend owns the little wine shop and the grocery store is a privately owned chain one city east of here. i walk down the “commerce street” with my dog almost every day. i rarely shop but enjoy the storefronts, so i know what you mean.

    1. Thanks for sharing Freddy. Everyone has to find their own unique approach in the modern world. (I banked exclusively online when I was living in other areas. Some people travel a lot and certainly need a national chain to bank with or it can become really cumbersome.)

      Glad you can relate to the dog walking part. It’s one of my favorite things to do each day! I love seeing the creatively decorated storefronts.

  2. There are definitely some young idealistic people judging me for my shopping choices as well. I struggle similarly to you in terms of wanting to find the best deals, but I don’t have as much strength as you, and often go for the cheaper online options. I think I’ve become a bit fazed living in Santa Monica – it’s an especially bougie crowd here who tend to go all in on exorbitantly priced everything and then tout the environmental and sustainable benefits of their acts, when in reality I don’t know if they would be making those same choices if they didn’t have trust funds/high salary careers supporting them. Anyway, I appreciate you raising the point, because I could certainly do better to be a more conscious consumer. Always a work in progress 🙂

    1. Thank you for weighing in on this issue Elise. I’m surprised how much I don’t see local shopping talked about in personal finance circles! I don’t find much judgment happening in my personal life (other than the judgments I bring upon myself). I live around pretty chill people. But I can’t imagine being in Santa Monica! You’re right – it’s easier to spend on quality/sustainable/local items if you’re covered by someone else (parents, husband, etc.) or set for life. Otherwise, each choice is a battle. It’s hard to not let the “better deal” win out when frugality helps establish other life goals or at least get your head above water.

  3. I’ve never lived in a small town (both in the Philippines and here in New Zealand) so I don’t know the small-town experience when it comes to mom and pop stores and local banks.

    But judging from what I see in American movies, it gives you more sense of community than just living in a swarm of houses around the strip mall with big banks and a Walmart across the road.

    But as far as buying local goes, I’m all for that. Fresher, more self-sufficient growing. etc. Here in Auckland I see a few local growers farming on land where people don’t like to build houses like under electricity towers etc. which is very cool.

    1. Thanks for dropping by the blog again PiKi Dad and offering your perspective. You’ve probably seen more American movies than me, so I’d love to know what you are talking about (ha)! I imagine they are older movies?! I do live in an idyllic town that is kind of old-timey and fits in with the overall history vibe on the blog. We’re not stuck in the 1950s or anything, but I do think the neighborly feel we radiate is probably becoming rarer in the world.

      You are right – buying local makes sense no matter where you are at. Keep enjoying Auckland!

      1. Yes, that neighbourly feel where people greet you with a smile, everybody knows everybody, kids can bike to their friends’ houses. 🙂

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