´óÏó´«Ã½

Ditch the Cards

All electronic transactions siphon money out of your community to some extent, so try the human approach and bank in person. Pay in cash or, second best, write a check. If you have to use plastic, choose debit. Your local merchants lose some of their profit any time you use a card, but they pay up to seven times more in fees when it’s a credit card. And studies show people spend 12 to 18 percent more when they use cards instead of cash.

Move Your Debt

Already broke up with your mega-bank? From credit card balances to car loans to mortgages, mega-banks make far more money off your debt than your savings. Refinance your debt with a credit union or local bank and let your fees support your community. Be wary of “affinity credit cards,” which donate a certain amount per purchase to good-hearted organizations but often are connected with a mega-bank.

Spend Deliberately

Forget Internet deals; shop local and independent. Support second-hand markets by buying used, and barter and trade services when you can. Look for goods grown and made nearby.Research your purchases carefully: That organic Dagoba chocolate bar is owned by industry bad-boy Hershey. Want to give money to Coca-Cola? Buy Odwalla juice. Easy company screening at Green America’s Responsible Shopper website.

Shorten Loan Lengths

To get as much interest from you as possible, banks offer to stretch out terms. Avoid the 30-year mortgage or the seven-year car loan. If you’re stuck with one, change it yourself: Decide the length of term that’s best for you and pay down your principal. Calculators at sites like ­mtgprofessor.com can be used for any loans, not just mortgages.

Earn Feel-Good Interest

A community development bank will reinvest money from your CD back into your community and pay you interest. So will alternative savings tools offered by RSF Social Finance or the Community Investment Note from the nonprofit Calvert Foundation, which also lets you target by cause, such as public radio stations. Put money into kiva.org microloans and get no interest but big returns in social-economic justice. Closer to home, consider investing in family—a college loan for a nephew, for example.

Create a DIY Retirement Fund

Avoiding Wall Street’s ubiquitous 401k can be tricky. One way is via “Self-Directed” IRAs and Roth IRAs. These require the account owner—you—to make all investment decisions. You get to decide what projects to invest in—from local projects and businesses to real estate.

Invest In Home

Investing in your home strengthens your community and builds your wealth. Pay down your mortgage, then use that equity when it’s time to retire. Want more investment? Do it with a second property and be a local landlord, or invest in your children’s home. Beyond mortgages, invest in your home’s energy efficiency for a solid rate of return. Or become your own utility by tying your alternative energy system into the grid.

Don’t Forget Your Community

Buy shares of a local co-op­—utility, food, store—or jump on a Direct Public Offering. Seek out, or better yet start, a community investment group to connect local businesses with local investors. Look for community Revolving Loan Funds that allow participation by individual investors, such as Cascadia (Pacific Northwest), “Invest Local Ohio” Economic and Community Development Notes, the New Hampshire Community Loan Fund, and Mountain BizWorks (North Carolina).