How to Start Saving and Investing With Small Amounts of Money

Last updated on: January 9, 2013 at 8:00 am by Kevin

How to Start Saving and Investing With Small Amounts of Money 2013-01-09T08:00:32-05:00 Kevin

LOGO Patheos Explore the world's faith through different perspectives on religion and spirituality! Patheos has the views of the prevalent religions and spiritualities of the world.

Millions of people have little or no savings. In fact, according to one recent report 64% of households have less than $1,000 in the bank. That’s the majority of Americans! And in today’s world, $1,000 just isn’t that much money.

I’m going to take a guess here and say that it’s likely that the majority people don’t have any savings because they never starting saving money in the first place. If most of your paycheck goes to paying bills and you only have a small amount left over, you may feel that it isn’t worth trying to build a savings balance.

But in order to save, you need to start somewhere, no matter how small it seems to be. There are ways that you can start saving at least a little bit of money each month. Keep doing that, and after many months you will have a respectable amount of savings that will give you all the incentive you need to make it even bigger.

Change your spending habits – a little

No matter what your financial situation is, you can probably find ways to free up at least some money for savings. It could be as simple as deciding not to go to dinner one night each week, and instead putting money into savings. If you spend $25 taking your family to McDonald’s one night each week, you can decide not to go and instead save the money.

Though $25 doesn’t seem like a lot of money, if you do that for 52 weeks in one year, your savings will grow to $1,300 (you‘ll then be well into the top 36% of savers in America!). That’s just for cutting out a single activity and redirecting the money into savings. How many other activities can you cut and increase your savings even more?

The old-fashioned cookie jar

People who are in tight budget situations are sometimes afraid to put money in the bank because it takes it out of reach in case they need it. But you can go old school at this, and save money in a cookie jar. You don‘t literally have to use a cookie jar, but you can use some other storage method that will allow you to save money a little at a time.

You can use the same method discussed above, putting cash into your cookie jar account, rather than going out to dinner or what other activity you decide to pass on. As your cash pile grows, so will the options on what to do with it.

Individual Retirement Arrangements (IRA)

An IRA is another great way to save small amounts of money. You can contribute to an IRA through a payroll deduction that you will hardly notice. If you are paid twice each month, and you contribute $50 to an IRA with each paycheck, at the end of one year you will have $1,200 in your account.

An IRA offers two other advantages. It is tax-deductible so it will reduce your income taxes. That way, the government is partially funding your IRA. Another advantage is that an IRA offers an opportunity to begin saving and investing money for the long-term. The sooner you begin doing that, the better the future will be.

Payroll deductions into a savings account

If you have direct payroll deposits into your checking account, you can just as easily allocate a small amount to go into your savings account. It doesn’t have to be a large amount, but by saving this way your money will build and you will hardly notice that it’s happening. You won’t be forced to make spending decisions, because the allocation is automatic; it will happen without any further action from you.

All you will need to do is pretend that the savings account doesn’t exist, so that you can give it time to grow.

Fast forwarding your small savings into big savings

The hardest part about saving money is getting started. Once you do, once you have a few hundred dollars put away, you can begin to fast forward the process.

You can do this easily by depositing your income tax refund, bonus check or the proceeds from the sale of personal assets into your savings account. A $1,000 income tax refund can nicely fill out a savings account that already has $1,000 in it. The deposit will give you a $2,000 balance before you know it.

Keep contributing beyond that balance and the account will grow and grow. It won’t be long before you will begin to feel prosperous. And that’s a really good feeling.

Have you avoided saving because you don’t think you can put away enough to make a difference?

Saving

Previous Post

January 7, 2013

Go to The Ant You Sluggard

Next Post

January 10, 2013 Turbo Tax Free Online Tax Prep in 2013

Browse Our Archives

Select a Category ALL Bible and Money Biblical Perspective Book Reviews Budgeting Business Corner Churches and Pastors Debt Encouraging Scriptures Entrepreneurship Faith and Economics Family and Money General Personal Finance Giving Inspirational Quotes Investing Making Money Other Personal Finance Retirement Reviews Round Up Saving Self-Improvement Taxes Uncategorized

Select a Month January 2019 November 2018 October 2018 September 2018 August 2018 July 2018 June 2018 May 2018 April 2018 November 2016 October 2016 May 2016 March 2016 February 2016 January 2016 January 2015 November 2014 October 2014 August 2014 April 2014 March 2014 January 2014 December 2013 November 2013 October 2013 August 2013 July 2013 June 2013 May 2013 April 2013 March 2013 February 2013 January 2013 December 2012 November 2012 October 2012 September 2012 August 2012 July 2012 June 2012 May 2012 April 2012 March 2012 February 2012 January 2012 December 2011 November 2011 October 2011 September 2011 August 2011 July 2011 June 2011 May 2011 April 2011 March 2011 February 2011 January 2011 December 2010 November 2010 October 2010 September 2010

TAKE THE

Religious Wisdom Quiz

Why were the plagues significant against Egyptian beliefs?

Select your answer to see how you score.

Each plague targeted an Egyptian god They were random acts of nature They were meant to test Pharaoh’s patience Pharaoh had offended the Hebrew people