We all know the importance of saving money, but when funds are tight, it’s hard to make saving a priority when you have a million other financial obligations to worry about. We’ve all heard, “pay yourself first,” but what’s the best way to follow through? There are dozens of strategies for starting a savings plan. Here’s a simple way to start saving & investing money no matter what your financial situation is.
One word: Acorns
Acorns is a website and a mobile app that allows you to “round-up” your purchases and invest the spare change into mutual funds. You can link as many or as few accounts as you like, and you can choose how conservatively or how aggressively you would like to invest. You can also deposit any amount at any time. You can decide to invest deposits, round-ups, or both — you are completely in control.
The best part is that Acorns is the cheapest way to start investing: They do not require a minimum balance and their account management fee is the lowest I have ever seen (only $1 regardless of the balance). Most other mutual funds charge a percentage of your total balance each month to manage your account and require that you invest hundreds and thousands at a time. If you want to start small and get a real return on your money, Acorns is the way to go.
I love Acorns because I hardly notice the money that I have set up to invest automatically. Each time, such a small amount is moved from my checking account to my Acorns fund, that it is not significant to me, yet my Acorns fund is steadily growing.
Why did I choose to invest?
You might wonder why I’m choosing to invest in the stock market rather than a traditional savings account during a time when I have so little to save. The answer is simple: I’m young. I have more room to take risks. Because of compound interest, those who start to invest later in life — even if they invest more — can never catch up to those who start investing in their 20’s. Even while you’re still getting on your feet, investing is the only way to keep up with inflation.
Now, that’s not to say that I don’t have traditional savings accounts: I do, and I utilize them frequently, but starting to invest now is an important part of my savings strategy. My family is making the best out of our current situation. I imagine that a year from now our entire financial situation will be different, and our savings plan will be very different as well. Using Acorns is perfect for our current needs. It might be for yours too! Check it out here and get $5 when you start your account.
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