Our Debt Free Family

Commit. Plan. Take action.

  • ABOUT
  • CONTACT
  • FREE FB GROUP
  • FREE DEBT REDUCTION TOOLS
  • GET OUT OF DEBT
  • Privacy Policy
You are here: Home / Uncategorized / How to Start Investing in Stocks on a Budget

How to Start Investing in Stocks on a Budget

June 24, 2019 | Leave a Comment

Less than 50 percent of Americans currently invest in the stock market.

Are you part of the majority that’s wary of investing their hard-earned money? If so, what’s holding you back?

There are lots of reasons why people opt out of investing. Often, though, it’s because they’re not sure how to get started or they think they don’t have enough money to be an investor.

If you’re not sure how to start investing or are worried about your limited budget, keep reading. Listed below are some tips that will help you get started no matter how much money you have.

Reasons to Start Investing

Some people also hesitate to start investing because they don’t understand all the benefits that it has to offer.

There are lots of reasons to invest in the stock market, including the following:

  • Grow wealth faster with higher interest rates
  • Start saving for retirement
  • Reduce your tax bill
  • Support businesses you believe in
  • Be part of something new and innovative

Now is also a great time to start investing because it’s easier than ever. You definitely don’t have to work on Wall Street to invest in the stock market.

How to Start Investing While on a Budget

If you’re looking to invest in the stock market but don’t have a lot of money to spare, don’t worry. The following are some tips that will help you begin investing even if you’re working with a very limited budget:

Start With a High-Interest Savings Account

A great way to dip your toe into the investment pool is to open a high-interest savings account.

There are lots of accounts, such as CDs, that have higher-than-average interest rates. Invest whatever you can spare — even if it’s only $5 dollars — in this account and watch it grow.

Use a Roboadvisor

If you don’t want to worry about managing your investments yourself, a roboadvisor is a great option. Roboadvisors make it easy for you to start investing even if you have no prior experience.

There are lots of low-cost online roboadvisors that will manage your money and provide you with the education you need to continue making good investment choices in the future.

Enroll in a Retirement Plan

In addition to opening a high-interest savings account, enrolling in a retirement plan is another great first-step to take when getting into the world of investing.

Everyone ought to have at least one retirement plan to which they contribute on a regular basis. Enroll in your employer’s 401(k) plan or open a traditional or Roth IRA if you’re self-employed.

Invest in Mutual Funds

Mutual funds make it easy for you to invest in a variety of stocks and bonds with one simple transaction. They’re perfect for people who want to start investing but don’t want to spend too much time thinking about the investment process.

Mutual funds often require higher minimum investments (between $500 and $1500). Some will waive the account minimums if you agree to make an automatic investment each month, though.

Use a Micro-investing App

If your budget is very limited, another good option is a micro-investing app.

Apps like Robinhood and Acorns make it easy for you to invest your spare change in stocks and index funds.

These apps lower the barrier to entry for many new investors, and they often have very low (or no) minimum balance requirements.

Common Investment Mistakes to Avoid

As you can see, there are tons of options out there no matter how tight your budget is. If you want to profit from any of these investment options, though, you need to make sure you’re avoiding these common investment mistakes:

Not Trusting Your Gut

It’s easy to let yourself be swayed by people who seem to know more about investing than you do.

There’s nothing wrong with taking advice from others, but don’t let them talk you into making an investment that feels wrong to you. Trust your gut and use caution when investing in a new venture or taking a risk.

Investing in Businesses You Don’t Understand

Be wary of investing in businesses of which you don’t have a thorough understanding.

It doesn’t matter if it’s supposed to be a hot new enterprise or is on track to become a billion-dollar company. If you don’t get it, your investment might come back to bite you later.

Not Staying Informed

Make sure you stay informed on how your investments are performing. Check in with them on a regular basis to make sure you’re on track to reach your financial goals.

Pay attention to stock market news as well. This will help you keep up with the trends and get an idea of whether you should invest in specific businesses or not.

Making Emotional Decisions

It’s important to stay informed. At the same time, though, it’s important to maintain a cool head when doing your research.

Don’t let fear cause you to make emotional decisions. Just because you see in the news one day that a company isn’t doing too well, that doesn’t mean you ought to go out and sell your stocks right away.

You also shouldn’t go out and drop a ton of money buying stock in a particular business just because they’re doing well right now.

Being Impatient

Finally, don’t be impatient.

New investors often become obsessive over watching their money grow. Remember, though, that it takes time to build wealth.

If you’re patient, you’ll see much more significant returns that if you’re always obsessing over the markets and trying to move things along at a faster pace.

Start Investing Today

There are tons of benefits that come with being an investor.

The sooner you get started, the better off you’ll be later on. Even if you only have a small amount of money to spare, you can benefit from investing those funds.

Now that you know how to start investing, it’s time to get to work!

Keep these tips in mind so you can start growing wealth and making your money work for you, no matter how tight your budget is.

If you want to learn more about wise investing, we’ve got plenty of resources available. Check out some of our other investment-focused articles today for additional advice.

Filed Under: Uncategorized

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

  • Facebook
  • Pinterest
  • RSS
  • Twitter

 


Five Steps To Debt Freedom

Here are five simple guidlines that will help you pay off debt.  

1) Get an emergency fund so you don’t take on debt when something comes up.

2) List your debts. This way you know where you stand.

3) Use the debt snowball. Pay your debts from smallest to largest, or most expensive to least expensive.

4) Avoid new debt. No new credit cards or loans. Period.

5) Go all cash. After everything is paid off, switch to all cash.

Helpful Resources

The Free Checklist for a Strong Financial Plan

U of Tennesse Debt Repayment Plan Basics

Vertex 42's Debt Payoff Calculator

Savingadvice's Helpful Debt Forums

Jackie Becks Debt Blog

Our Most Popular Articles

How Alice and Scott Paid off $200,000 in Student Loans

Learn How Christine Paid off $500,000

Use the Debt Snowball to Create a Payoff Plan

Do Nothing and Save Money with the Paribus App

Thanks To Our Advertisers

Get the tools to start living debt free! Learn more…

Need a title loan in Jacksonville, Florida? Go to 1-800 Loan Mart. Fast and easy applications.

Copyright © 2022 Runway Pro Theme by Viva la Violette