Getting Money for Investing When Money is Tight

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Investing builds wealth, but if you don't have money to invest in the first place, it can feel off limits to you. This doesn't have to be the case. Almost everyone can find some money to invest, and even a small amount can build over time. With the tips below, you can make better use of the money that you have.

Understanding Exponential Growth

It can be tough to really visualize what happens to your money when you invest it. If you put $25 in a savings account, it might accumulate a little bit of interest, but it doesn't increase substantially in value. At the same time, you might also see news reports about drops in the stock market and assume this is not a safe place to park your money. This might be true in the short term, but over the long term, the money that you invest in stock and other assets almost always increases in value. 

Not only is that true, but it won't gradually grow at the same slow pace as your savings account, which might not even keep up with inflation. Exponential growth means growing with compound interest, your investments will grow not just based on the initial deposit but on interest earned. This means that money you put away when you are young can be worth an enormous amount decades later.

Cutting Expenses

With all this in mind, it can still be difficult to find ways to reduce your expenses so that you have money to invest in the first place, whether that investment is in the stock market, your retirement account, or other investment vehicles. Apps that track your spending can help you identify areas where you're wasting money without realizing it. You can also take a look at what may appear to be fixed expenses that can be reduced. A student loan refinance can be a great way to cut your monthly payments and free up money to put toward an investment. Take a look at what you're paying for rent or toward your mortgage and consider whether you might take a step such as getting a roommate.

Increasing Your Income

The other route toward finding more money for investing is to increase what you're bringing in. There are many different ways to do this. The first is by looking for a job that pays more, but for many people, this isn't desirable or realistic. Another option is finding a part-time job to supplement the one you do full-time, but it can be exhausting adding another 15 or 20 hours to your work schedule. 

For many people, a better option is a side hustle that they can do when they have time or finding ways to generate passive income. The former might include mowing lawns, pet sitting, crafting or driving food deliveries while the latter might mean writing eBooks on a topic you're familiar with or setting up video tutorials that teach a skill. Alternately, you could look into selling possessions you no longer need or even setting up an online store if you're skilled at finding treasures yourself and reselling them.

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