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You've been told over and over that investing is the key to long-term wealth. You follow me on instagram along with a bunch of other finance creators and wonder why does everyone talk about investing?!
But every time you think about opening an investment account, you get stopped by the same nagging voice:
"I barely have enough to cover bills and loan payments each month. How can I possibly find extra money to invest?"
The truth is, even if your budget is stretched razor-thin, there are creative ways to start investing with just a few dollars here and there. Yes, it will take discipline. And yes, the growth may feel glacially slow at first.
But those small investing steps today can make the difference between spending your golden years working for pennies or being financially secure. The hard part is overcoming the psychological hurdle of thinking you can't invest until you have tons of disposable cash. You can literally invest with $1 today if you wanted to! It just takes switching the money narrative you've held onto along with some light learning on HOW to do it.
Here are 7 no-excuse ways for cash-strapped millennial women to get started investing right now:
Take Advantage of 401(k) Matching: If your employer offers a 401(k) match, it's essentially free money! Let's say they match 50% of your contributions up to 6% of your salary. By contributing at least 6%, you could instantly double your money. This will get subtracted from your paycheck meaning you don't even have to think about doing anything. All the work is done for you! Over 30+ years, that supercharged compounding can grow your retirement nest egg exponentially.
Open a Roth IRA, which allows you to pay taxes upfront, so all future growth is completely tax-free. Many brokers have zero account minimum to open a Roth. Even socking away $50-100 per month could snowball into a substantial sum over decades thanks to compounding interest. That's potentially hundreds of thousands of dollars tax-free in retirement! Investing $100 a month for 40 years into a standard S&P 500 fund can estimate to grow to $350,000, assuming an 8% return. Having $350K is better than not having anything!
Use a Micro-Investing App: The beauty of micro-investing apps like Acorns, Stash or Raiz is that they enable you to invest just your spare change. Those $0.50 roundups from everyday purchases get transferred into an investment account. You can get started with as little as $5, then keep adding as you're able.
Buy Fractional Shares: In the past, investing in individual stocks was extremely cost-prohibitive for beginners, mostly because it felt like an expensive purchase. Having to buy full shares at $500, $1000 or more made it impossible to build a diverse portfolio on a small budget. But fractional shares have made investing in stocks much more accessible. Many brokers and investing apps now allow you to buy a portion of a share at the same ratio as the share price. So if a hot stock is $300 per share, you could invest just $30 to buy 1/10th of that share (aka a fraction of it). This lets you build a portfolio of fractional shares across various companies and sectors from day one.
Reward Yourself with those small kickbacks!: Whenever you receive a tax refund, birthday money, bonus at work or any other cash windfalls, commit to investing at least a portion of it rather than spending it all. If you invest it right away then you essentially pay yourself first to take care of future you. Consider it your future self's paycheck!
Check all Fees: The fees you pay on all the things: overdraft, credit card interest, paying more than needed for your phone bill, along with a financial advisor may seem negligible, but they really add up over decades. For example, paying 1% in annual fees instead of 0.25% could erode over a quarter of your investment gains after 30 years! Use low-cost index funds or robo-advisors to keep fees to a bare minimum.
Automate Contributions: The easiest way to build an investing habit? Automating money transfers directly from your paycheck into investing accounts. Similar to how you have your credit card bill or cable automated, you essentially do the same thing with your investments. Whether it's $20 or $50 per pay period, those automated contributions can really stack up over time. Step 1) automate the payment and Step 2) setup automatic investments into a low cost index fund. You'll never even miss the money when it doesn't feel like you're losing much. You'll also likely set it and then forget it anyway lol
The key is simply getting started, even if it's with humble amounts. Starting somewhere is better than going nowhere! Once you gain investing experience and momentum, you can increase how much you contribute as you're able. But don't wait to begin—every year invested in your 20s is worth exponentially more decades from now. Start small, but start today, xx