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No matter your age, opening and funding an investment account offers many benefits. But with bills to pay, you may be wondering where the money will come from. Luckily, there are a few simple steps you can take to begin saving money for investing. It may not seem like a lot right now but investing early gives you the benefit of time. As your investments grow, you can reinvest the earnings into new accounts. By starting now, you may see larger rewards than if you invested later.
Save Money
Even if your income is low or you have student loans, you can still fund your investment account. Living frugally will give you more money to invest. Many people have spending areas they can cut back on. For example, when evaluating your spending, you may notice subscriptions you no longer use. Or you may consider purchasing used items instead of new ones. Many gently used items are available at a fraction of the price of new ones.
To evaluate your spending habits, print out the last few months of your bank statements. Carefully go over those statements to get an idea of your spending habits. You most likely have areas that can be reduced or eliminated. Seeing where your money is going may be enough to encourage you to change your spending habits. If you have debt from school, student loan refinancing can be a good way of saving money on payments. Often, this allows you to pay less interest on the remainder of the loan while paying it off faster.
Reduce Food Waste
Many people unintentionally waste food because they don’t use it in time. Other people often prepare too much food to be eaten right away. Groceries often make up a large portion of your monthly spending, so reducing food waste will give you more money for your investment account. Consider a few simple ways to lessen waste.
- Make a shopping list based on your needs.
- Avoid making a purchase when an item is on sale unless you need it.
- Buy meats on sale and freeze them for later.
- Save leftovers from meals for lunches or dinners the next day.
- Make a meal plan for the week and only buy enough for those meals.
- Keep an eye on expiration dates and freeze any excess.
Sell Unneeded Items
Most people have items sitting around that they no longer need. Clothes, books, and toys are all examples. Selling these items will give you additional funds while freeing up space in your home. An Internet search may turn up a consignment event near you.
Use Extra Income Wisely
If you receive income that is outside your normal pay, you should use it wisely. This income can include anything from bonus checks to tax refunds to inheritances. Allocating some or all toward your investment account is a better idea than spending it all on yourself. If you know you will receive this income, don’t consider it extra household income. Instead, put it immediately in your investment account.
