How to Start Investing On a Budget
Written by: Cole Miller
Investing can be thought of as a scary and risky task, usually only done by the wealthy. But I’m here to tell you that couldn’t be further from the truth. No matter how much money you have to invest it will continue to grow with compound interest.
The first step to start your investing journey is developing and using good saving habits. This could mean sacrificing your 6 dollar coffee in the morning for the homemade alternative. Once you have saved up a bit of spare cash you are ready to invest. Everything nowadays appears to be controlled by a smartphone or app. Investing is no different. You could use a Robo-advisor savings account. You could also throw some money into a stock trading app and allow yourself to play and learn about your money. It can be a daunting task to try and zero in on which app will work for you. Well I have broken down 3 forms of investing to fit just about everyone's wants and needs
The Cookie Jar Approach
Saving money can be very closely related to investing. Like said before to start investing you have to have some spare cash. One way to do this is with cookie jars, if you know that you are someone who struggles to save this can be an effective method. This method involves you setting aside a set amount of money every week. For example, if you choose to set aside just 10 dollars a week over the course of a year it will add up to just over $500. This may sound silly and underwhelming but in most cases, it is a necessary first step for many. There is a similar online alternative to this method called the savings account. This account won’t be linked to the debit account and should be withdrawn from very often.
Using a Robo-advisor
Once you have some money saved up it's time to begin investing to hopefully multiply your money. Robo advisors make investing simple and safer. Robo-advisor apps work by asking simple questions to try and finger out your economic goals and risk levels when it comes to your money. Then based on this information your money is invested in low stakes and low costs stocks and bonds. These apps make investing easy and quick for your everyday life. Most of the apps and services require 500 dollars or less to get started. There is one small yet important piece of information about Robo-advisors. On average Robo advisors take a .25% yearly fee. This means if you have 1,000 in your account with them every year they will take 2.50 dollars. Even these small fees can be avoided with the final investment strategy.
Self Run Stocks
Now thanks to the internet virtually everyone has access to participate in the stock market. In the news, we constantly hear about stocks like Tesla, Gamestop, and Amazon. These giant players in the stock market have the huge initial investment to get involved, but thousands of small penny stocks can be used to practice and understand how the stock market works. Using these cheap and lower-risk stocks is a great tool to learn about stocks before you get involved in longer and more costly investments. Apps have now made it even easier to get involved in the stock market. Apps like Robinhood and Public have allowed you to monitor, buy, and sell stocks all in the palm of your hand. Most of these apps can be used completely for free without any fees involved as long as you have a bit of patience and are ok with a basic package.
With all of these ways to help save and grow your money why haven’t you started yet. Investing can be daunting but with a little bit of research and a little bit of money, you can drastically improve your financial situation within your level of risk.
Works Cited
Davis, Chris. “Robinhood Review 2021: Pros, Cons & How It Compares.” NerdWallet, 8 Feb. 2021, www.nerdwallet.com/reviews/investing/brokers/robinhood.
Larkins, Jason. “6 Small Investment Ideas When You Have Less Than $500.” GOBankingRates, GOBankingRates, 11 Feb. 2021, www.gobankingrates.com/investing/stocks/how-start-investing-with-less-500/.
Sabatier, Grant, and DDD007 says: “15 Ways To Start Investing With Little Money.” Millennial Money, 4 Feb. 2021, millennialmoney.com/how-to-start-investing-with-little-money/.
The comment about stocks and investing seeming like only the very wealthy do it is so true, and I think it is very overwhelming for many people (including myself). The cookie jar method, though, is a good point and very under-appreciated. Setting aside just $10 a week compounds into something much greater over time so long as you don't touch it, just like a savings account. As for your writing, you did a really good job being relatable and inviting to your audience, not condescending, which I found super enjoyable while reading! Good job!
ReplyDeleteI think your article is very insightful for someone who is interested in investing in stocks but does not know-how. I thought it was helpful to add a section about how to save money to invest since normally there is a minimum that may be fairly high. Mentioning apps that you can use was helpful as well since there are so many. Another thing I liked about your article was the organization it was very easy to follow and comprehend. Overall, your article is very well put together and easy to digest. It has lots of relevant information that will help guide you as you start investing in stocks.
ReplyDeleteI would love to try to invest in something like stocks, but their are too many things to keep in mind when investing. Like where should I put my money so I have a chance to make more, and how much money. Then there's the risk of investing too late, where you could of made much more money than you did. So when I save money I tend to stick to something safer, like you said the cookie jar or even just a savings account.
ReplyDeleteI wasn't really sure about stocks and investing before this, but reading your blog really helped and made me really interested in learning more. I also liked how you talked about the cookie jar method, and how easy it can be to just set aside a certain amount each week. Your piece was well organized and it kept me very engaged through the whole thing. Great Job!
ReplyDeleteI found this article to be very helpful. I like how you included the penny stocks as a method to learn. Many people starting to invest in stock fail to do so. If people aren't familiar with the stocks and go invest lots of money, they will likely lose more than they started with. As for the writing, it was organized and had lots of useful information, this is something I will keep in mind as I start to go out into the financial world.
ReplyDeleteI like how you included the cookie jar method because I have used that in the past when I was younger. Every year I would have a jar that I would put money into that I would use as my spending money on spring break. I agree that it seems the wealthy do it because it seems like they are willing to risk their money more then most people would. But one thing is investing is actually a pretty big risk, I was looking at a article and it shows how the majority of new investors actually lose money in the stock market. If I remember correctly it was like 80% but I read it weeks ago so I might be way off. That's why I liked your idea of using a robo advisor because although the fee sucks, you most likely would have a better chance of making money because they will know more then you at the time and then eventually when you are confident you know enough you can start yourself.
ReplyDeleteThe cookie jar method sounds like the safest and easiest option for me. After all its just a savings account while its underwhelming its safe.
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ReplyDeleteI was always interested in stock and always wondering if I could ever do it myself. Your blog was really helpful with showing me that I could actually do it, and providing tips for saving with the cookie jar approach and/or using the robot-advisor. I would prefer to use to rob-advisor because they would allow you to make more money because they can help control your investment probably better then you could (if you were a beginner) and if you’re making more money, I wouldn’t mind the fee. But overall, I really liked your post, your writing was easy to read and understand which I think is very good considering I had no idea about how to start investing on a budget.
I love this post! i really enjoyed how you used the cookie jar method which i have never tried but maybe start trying. Investing is a giant risk for all but if you can become good at predicting the stocks to go up and down you will most likely become rich faster then you think.
ReplyDeleteI found this blog really interesting, and all of the different methods are really good. How about the people that are living paycheck to paycheck? What options do they have? I thought that over all your blog was really good and a lot of people could use this advice you are giving. I will definitely be using some of these tips in the future. My last question is if the cookie jar strategy is safe?
ReplyDeleteI thought this was a very intriguing blog as stocks have been a key factor in the economy and every time this topic is brought up it's always related to those willing to begin investing in stocks which is super useful. It's inevitable that stocks are probably going to play a role in our lives if that being trying to duplicate our money, or just trying the experience. Thought it was really informative that you brought up the cookie jar method as it just shows how much money could be made in the long run even if it's a small amount, but all you need is patience and have to put aside all temptations. I thought this was overall a great blog and kept me captivated go learn even more. Great Job!
ReplyDeleteYour blog considered great methods of budgeting and saving. I think the most approachable option out of the three you mentioned for people in our age group would definitely be the “Cookie Jar Method.” That is something I have tried in the past, but reading about it reminded me that I should cut down on buying little things daily, even if it is only a $5 coffee. I was unfamiliar with robo-advisors, but that does seem more practical to use further down the line when I have a sustainable amount of income. Same would go for investing as well. Overall I think your blog was very well-rounded and included insightful information!
ReplyDeleteAs rising numbers of Americans are diving headfirst into the stock market for the first time it is important to do good research before you make any investments, of course, mistakes will be made, but with help from blogs like yours more and more people can be informed and ready to begin investing in the next big stock for them. This blog did a great job of illustrating how no matter your income, age, or stage of life the stock market can be for you. You were clear and concise the whole way through and mentioned three great ways to get started. I especially liked how you mentioned starting with smaller penny stocks that don’t need large-scale investments. Really great job Cole!
ReplyDeleteI found this really interesting because ive always though about investing but never new where to start, so this helped me get an idea of how i should start investing.
ReplyDeletei like your post. it was very instering and helped me underdsand how to get started in investing and when i should star. very good piece
ReplyDeleteI really liked your different approaches you offered in this blog, specifically the cookie jar approach. A lot of young people are starting to be interesting/get involved in the stock market and although the stock market is a great way to make extra money in addition to your day job, having a plan and doing proper research before throwing your money at different stocks is vital.
ReplyDeleteI think that your blog was very informational and you picked 3 really good investment tips to write about. The one that I found most helpful was the cookie jar method because I think right now as a teenager that one would be the easiest to do and the best way to start investing now. I like how your blog showed that any age can start investing and the way to start is as simple as making developing and using good spending habits. Out of these approches which one do you currently use or would start using
ReplyDeleteAt first I think I will invest for longevity. My gameplan is to let the interest do the work and I sit back and wait. Use this for a savings tactic. For now I might use the cookie jar method. Seems more reliable and safer just so I can get in and test the waters a bit.
ReplyDeleteI have terrible spending habits, so I really need to learn to save and invest. I think I will use the cookie jar approach for now so I can save some money each week and then invest it at the end of the year as I really want to start investing, but I need to be able to set money aside and not stop for some fast food and rather go home and make myself something from the food I have at home. I hopefully will be able to start investing using things like Robo-adviser by the end of the year and start investing to grow my money.
ReplyDeleteI chose to read this article because I have started to invest myself. The cookie jar approach is what I am doing, as I invest about $12 a week and I feel that is the safest option for me. The robo-advisor seems very helpful for investing so I will definity check it out. Stocks used to seem very risky to me but I was unaware of the apps that help with investing in stocks. I will also check out these apps in the future.
ReplyDeleteRobo-advisors seem quite interesting and seems to be made easy for people. Question: does it automatically just pick whatever it thinks works for you? If so, how could you 100% trust those choices? The cookie jar option is a good way to do save money little by little so not that intimidating.
ReplyDeleteThis is a really cool post! Personally I am very interested in the stock market so it was interesting to see the things that you had to say about how to even start investing. While I am interested in stocks I haven't ever invested by myself just because I can't yet do that. I liked that you talked about the different ways to start. In particular the part where you talked about people who like to trade stocks by themselves. A lot of people like to do this because they feel like they have more control which is understandable but it's definitely also important to remember that almost nobody ever beats the market by trading themselves. Things like index funds and investing in proven companies for longer periods of time has almost always been more profitable over a large period of time. Warren Buffet even put a 10 year bet on the S&P 500 outperforming a team of professionals and he won. Overall great piece and definitely made me think about future options when I get to start investing myself.
ReplyDeleteCole; I really enjoyed reading your post and it was very informative! I appreciated how you broke down the information and gave us three very helpful tips. I feel like teenagers always talk about investing and I've always felt lost and didn't know what to do. Your blog was really informative and I feel like I know more now. However, as someone who isn't very experienced with investing, do you suggest avoiding self-run stocks until I'm more experienced and knowlegable?
ReplyDeleteI found this blog to be very helpful. Even if people dont want to invest or start doing stocks this is still a great blog to reference. You broke down the information very well. Great blog!!!
ReplyDeleteI really liked this post! Cole you did a good job providing helpful tips for the audience. This was written to a great standard. It shows that you do not need just a normal cookie cutter job and can't open your horizons. Great Job!
ReplyDeleteI really liked your post, I thought that you gave very insightful information and gave a good approach for investing. I also enjoyed how you said you don't have to be super wealthy to invest. This made it more relevant in your readers life and it was easier to relate to and apply. I liked your idea of cutting out things like coffee in the morning and find ways to get money to invest. I know you talked about things such as robo-advisors, but do you think with an increase in updated technology, will it change investing in the future.
ReplyDeleteYou did a great job with this post. I know a little bit about the stock market and how you can make a reasonable amount of money off of investing. This post helped me think more about saving up money to be able to invest instead of just going into with a little bit of money because then you won't make as big of a return off of your lower investment. I like how you gave different approaches to how someone could get into the stock market so that if I wanted to get into it I could have different options. Overall, I thought that you did a great job with this blog and had very good information and tips about investing and the stock market.
ReplyDeleteIt has always been a goal of mine to start getting into investing, but I don’t want to pour a bunch of my money into stock without knowing what I’m doing. You brought up a great point in which I would like to start doing is investing in penny stocks so I can practice and get a feel for what investing is really like. I know you said that penny stocks are a great way to start and get a feel for how the stock market works, but should I continue to invest in penny stocks or move into bigger stocks?
ReplyDeleteI have actually heard that that best way to start in the stock market is to have a robo adviser for you. Although veterans of the stock market would say different thing about the robo adviser. It’s still the best way to go.
ReplyDeleteI've only heard of a robo-advisor before but never understood what it was so that was particularly interesting to me, it's crazy that there are apps now that can invest for you if you want to purchase individual stocks but don't want all of the risk attributed with it, it's a super interesting concept.
ReplyDeleteThe cookie jar approach makes sense for those who might not be so good at saving. I like that you call it the "cookie jar" approach, too. That method is also probably the most stable, as it cannot be lost through the market going down.
ReplyDeleteI've never heard of a robo-advisor before, so I've definitely learned something from this post. It would be interesting to see in the specific differences of investing in a low-risk robo-advisor vs putting money bonds for long term.
ReplyDeleteI thought this was very interesting, especially the Robo-advisor part. I know many financial advisors have helped their clients and themselves become very successful, and I want to know more about how successful artificial advisors are. I think I would prefer to invest using a human financial advisor, but it's interesting to me that artificial financial advisors exist.
ReplyDeleteInvesting is super scary, especially for young people like us who likely don’t have a lot of money and are trying to save every penny for the future. I like that you not only presented the options to start investing in a clean format, but you also made it applicable to high school students by ensuring affordable options. I wonder what you recommend for someone with little to no experience in investing. Is the robo-adviser a safe option? Do most people actually make money using services like that? Great work, Cole!
ReplyDeleteI had no idea there were Robo-advisor apps for stocks. Your blog is very helpful when deciding which app will be best for the reader, especially since I didn't know there were different kinds of investment apps -- and I'm sure plenty of others didn't realize this either. I wonder what other methods there are to saving, if not just the "cookie jar" strategy?
ReplyDeleteInvesting is something that I have always wanted to start, yet time and time again I see myself pushing it aside because of lack of knowledge and not knowing where to start. This blog has been very helpful in not only making me more confident but reminding me to start learning how to invest because starting early is key. I believe that the Robo-advisor apps for stocks is something that I am going to look into the most. Thanks for the insight.
ReplyDeleteI really liked how you included methods and different things to help you be able to invest. Investing is definitely something that can be intimidating and your post helped me gain better understanding of what exactly investing is and how I can start investing on my own. I really liked how you included the Robo-advisor and that's definitely something I would want to use/look into the most!
ReplyDeleteI liked how you offered multiple options for new investors. Investing can be scary for most, in your blog you reassured readers that investing is for everyone. I wonder if a lot of people use robo-advisor as an option for investing? I have never heard of robo-investing so that was interesting information for me.
ReplyDeletePersonally this was right in line with what I have been doing myself! I've been heavily investing in crypto and trading daily. The cookie jar method has been my go to technique to constantly put more in to grow my investments. Excellent work on this strategy filled piece for new investors!
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