When you want to start investing, but you feel you don’t have enough money to start, it can be discouraging.
Because the benefits of investing are so great, though, you really can’t afford not to invest. But how do you get started? These three things may seem basic, and truth be told, they are! But, they are also key to getting your finances in order to start investing.
1. Curb Your Spending
One of the first things any successful investor will tell you in order to be able to afford to start investing is to curb your spending. It doesn’t even need to be a huge amount of money. In fact, you can start investing with a robo-advisor for only $250.
However, if you want to come up with the seed money to get you going you need to find it in your budget first. Look for things you spend money on but don’t even think about, such as a daily trip to get coffee each morning. Instead, save the $4 or $5 dollars to build up enough to get you started investing.
Stop making the excuse that you don’t have the money to invest. The truth is, if you really do want to invest you may have to make different choices. Change what you spend your money on. If you truly want to invest I bet you can find the room in your budget to get started.
2. Pay Off Debt
You don’t necessarily have to pay off all of you debt before you begin investing. In fact, if you have a lower interest loan, such as a student loan, you could come out ahead by investing even if you still owe on it.
If, however, you have some high interest debts, like credit card debt, it is usually best to get those paid off first. Use that extra bit of money you found in your budget by making coffee at home to pay extra on the smallest outstanding debt you have. Once it is paid off add that amount to the next outstanding debt and so on until all of the high interest debt is paid off.
Of course you have to avoid running up more debt in the meantime. One way to do that is to pause before you buy. Ask yourself if you really need the item you are about to buy before you complete your purchase. You may be surprised to find that upgrading to a new TV a few inches larger than the perfectly good one you already have isn’t worth it. Try saving that money instead and investing it.
3. Create Goals
Creating goals is another way to enable you to afford to start investing. Figure out what you are investing for. Doing this helps you to save toward something tangible. It also helps you to stick with it when your resolve to build up some investment money begins to fade.
Investing is important if you want to reach your goals whether they are to travel, save for retirement, or leave some money to your kids when you are gone. If you want to reach your goals instead of only dreaming about them, use these 3 ways to afford to start investing and make investing a reality.