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Investing on a Small Budget: Where to Begin

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Think investing is only for the wealthy? Think again. You don’t need thousands of dollars to start growing your money—just a little consistency and smart choices. Thanks to modern investing platforms and fractional shares, getting started with as little as $5 or $50 is easier than ever.

Here’s how to begin investing, even on a small budget.

1. Start with Your Financial Foundation

Before jumping into investing, make sure you have a solid financial base:

✔ Pay off high-interest debt (like credit cards) so investment gains aren’t wiped out by interest payments.
✔ Build an emergency fund with at least 3 months of expenses so you don’t have to sell investments in a crisis.
✔ Set up a budget that includes a little room for investing each month, even if it’s just $10 or $20.

2. Use a Micro-Investing App

Apps like Acorns, Stash, and SoFi Invest allow you to start investing with just a few dollars. They round up your purchases to the nearest dollar and invest the spare change. It’s an easy, hands-off way to get started without needing large sums of money.

3. Invest in Fractional Shares

If buying a full share of Amazon or Tesla sounds out of reach, fractional shares let you invest as little as $1 in big-name stocks. Apps like Robinhood, Fidelity, and Schwab allow you to buy pieces of expensive stocks, so you don’t have to wait until you have hundreds of dollars to invest.

4. Choose Low-Cost Index Funds & ETFs

For beginners, index funds and exchange-traded funds (ETFs) are smart choices. They spread your money across many stocks, reducing risk and requiring little effort to manage. Popular options include:

  • Vanguard Total Stock Market ETF (VTI)
  • Schwab S&P 500 Index Fund (SWPPX)
  • Fidelity ZERO Large Cap Index Fund (FNILX) (No fees!)

These funds track the market, keeping costs low and performance steady over time.

5. Automate Your Investing

The easiest way to build wealth is to invest consistently. Set up an automatic transfer from your checking account to your investment account every payday—even if it’s just $10 a week. Over time, those small investments add up!

Investing on a small budget is possible—and powerful. The key is to start now, even with tiny amounts, and stay consistent. Over time, compound interest will work its magic, turning small investments into significant wealth. The best time to start? Today.