Don’t worry. I’m not looking to make you feel guilty for driving out to the big-box stores to do your Saturday shopping or being on a first-name basis with the UPS driver who delivers your online purchases.

And I’m not going to preach spending your money exclusively on Main Street—especially given that mom and pop stores often have limited inventories, high prices, and inconvenient hours.

Like just about everyone else, you probably patronize local business when it works for you and hit the big-box stores or order online when it doesn’t. 

But in this mega-shopping holiday month, it’s good to remember that local shopping is important, to protect your neighbors’ jobs and your town’s tax base.

Every $1 you spend on local farm goods returns $2.80 to the local economy.

For example, locally owned businesses hire their own local service providers—from accountants to lawyers, handymen to landscapers—recirculating 48% their revenue back into the local economy, versus 13.6% for typical chains, according to a 2012 study by Civic Economics. 

And another study found that every $1 you spend on local farm goods returns $2.80 to the local economy, because the farmer hires local staff and buys local supplies and partners with other local companies, creating what’s known as the multiplier effect. 

But apart from shopping on Main Street and at the farmer’s market, there are some ways to financially support your local community that you may find surprisingly impactful.


Moving your checking and savings accounts to a local bank or credit union does much more than support a local business: it provides capital for that bank to make loans to other local businesses, says Jeff Milchen, co-director of the American Independent Business Alliance.

The data backs him up: Although community-based banking institutions (credit unions and small- and medium-sized banks) held only 24% of all banking assets in 2014, according to the Institute for Self Reliance, they accounted for 60% of all small business loans. 

Consider a local bank for your next mortgage, too. They often have the lowest rates and fees, benefiting you and the local economy, especially if you find one that commits to fulfilling your loan (and profiting monthly from it) rather than reselling it to a larger bank and taking only a broker’s fee.

Charitable giving

Directing your charitable giving to local nonprofits likely means more of your money will be spent on the cause (since smaller nonprofits typically have lower overhead), and your investment will improve your own region rather than someplace halfway around the world.

“The local community is getting double impact,” says Michael Shuman, fellow at Cutting Edge Capital, an Oakland, Calif., based organization that helps sustainable and socially responsible businesses find funding. “The do-good activity plus the economic benefit.”

Your own finances

Anything you do to improve your own finances also benefits the economy where you live, says Shuman. For example, you might insulate your house and slash your energy bills, pay down your credit cards so you’re not shelling out interest every month, or even start an exercise regimen to reduce your potential health care costs.

“More discretionary dollars in your budget is good for the community.”
Michael Shuman, fellow at Cutting Edge Capital

“More discretionary dollars in your budget is good for the community,” he says, because it means more evenings out for dinner at the microbrewery and a show at the concert hall.

Speaking of events, as you make plans for holiday fun, keep in mind that attending local concerts and performing arts shows supports your local economy just as much as buying a Christmas present at the downtown arts fair.

“Every ticket you buy has economic, social, and cultural impact—and helps to support your town’s unique a sense of community,” says LaMore.