You don’t need to have a lot of money to start investing. All you need is to make a habit out of it and be consistent. Here are 5 smart ways of investing only $100 a month.
We all dream of a bright future and financial independence and we might get frustrated when we take a look at our finances and see that we don’t have that much left. But it doesn’t take a lot of money. It takes time and consistency.
Here are some options for you to invest just $100 a month all year round:
1- 401(k) retirement plan
If your employer offers a retirement saving plan, and especially if they offer the matching contribution benefit, you should consider making the most out of it.
The money on your 401(k) plan can grow tax-free, so it is an excellent option for your future. If your workplace plan allows it, try putting in an extra $100 each month.
2- Emergency fund
If you don’t have an emergency fund, then you should start creating one. The ideal emergency fund should include at least three months of your living expenses. Put aside $100 each month to build an emergency fund in an account you can access, like a savings account. You won’t see high returns, but if something should happen, you are ready to face it.
3- Save for your healthcare expenses
You can open an HSA (Health Savings Account) to start putting in your extra money. This is an excellent tax-advanced option.
There are certain requirements to use an HSA, including having a high deductible health plan. Financial experts say that you should try to keep enough money in your HSA account to pay for your insurance’s annual deductible in case of an emergency.
4- Pay off high-interest debt
Carrying debt is no fun, especially if it is a high interest one, like a credit card debt. The sooner you pay it off, the better. This might seem like you are not getting anything in return for your money, but it will eventually translate into more money in your pockets. A hundred a month might not sound like a lot of money, but it will help you pay off your balance sooner and save a lot of money in interest.
5- Invest in yourself
Investing in yourself can also pay off. You can use the extra $100 to buy books or to take online courses that could bring your career to the next level.
If you develop more skills to do your job, you are more likely to get a raise or a promotion.