How to Begin Investing With Limited Funds

How to invest money in stock in India - Quora

Want to start investing but don’t have much to contribute? You’re not alone. Many Americans struggle to spare extra money for investments due to the high cost of living, substantial debt, and other necessary expenses. In fact, many people can’t afford an unexpected $1,000 expense, let alone set aside money for investing.

The good news is that you don’t need a lot of money to start investing. Like saving, investing is more about developing a habit and being consistent over time. By setting aside a little money regularly, you’ll find it easier to invest more as your budget allows.

Starting early gives you ample time to build a solid nest egg. Here are five ways to start investing with limited funds.


If your employer offers a 401(k), consider yourself fortunate. This is a straightforward way to invest, with contributions deducted directly from your paycheck. 401(k) contributions are tax-deductible, and you won’t even notice the money is missing since it’s taken out pre-tax.

Some employers match 401(k) contributions, providing an added bonus. If you can’t contribute the maximum amount, start small by contributing 2% to 3% of your income. Over time, this will add up, and the automatic nature of the contributions makes it easy.


You don’t need to hire an expensive financial advisor to start investing in stocks and bonds. Robo-advisors are online platforms that help you invest in suitable options and manage your portfolio. Websites like Betterment use advanced technology to select safe investments that match your risk tolerance.

I’ve been using Betterment for my Roth IRA for a few years, and it’s very user-friendly. When I signed up, I answered questions about my investment goals and risk tolerance. Since I started investing in my 20s, I opted for a riskier portfolio with a higher percentage of stocks. Robo-advisors like Betterment help you determine the best strategy for your situation, and I started with just $100 per month.


If you don’t budget with investing in mind, you may feel like you can’t afford to invest. We spend and save according to our plans. If you want to invest $150 monthly, review your budget to see where you can cut back. For example, keeping housing costs low and limiting dining out helped me free up more money.

Paying off consumer debt also made a significant difference. For instance, if the average car loan payment is $300 to $500 per month, imagine having that money to invest instead.


Spare change investing apps show how small amounts can add up over time. Last year, I signed up for Acorns, which invests small amounts rounded up from each purchase you make.

You connect Acorns to your checking account, and it automatically invests the difference to the nearest dollar. For example, if you spend $22.50 at Walmart, Acorns will invest $0.50. You can also make one-time lump sum investments or small weekly contributions, such as $5 per week. As you save small amounts consistently, you’ll see your balance grow with minimal effort.


Ultimately, increasing your income allows you to invest more over time. You don’t want saving to stretch you too thin if you’re already living paycheck to paycheck. Find ways to boost your income after cutting expenses and developing a habit of small contributions.

To max out an IRA this year, you can contribute up to $6,000 if you’re under 50, which breaks down to $500 per month. There are various ways to earn an extra $500 monthly, such as babysitting, walking dogs, selling items online, freelancing, or delivering food with DoorDash.

Consider investing in your education and skills to secure higher-paying job opportunities. If you land a job that pays $10,000 more annually, commit to maintaining your current lifestyle and investing the additional income.


Don’t let the idea that you need a large amount of money to invest overwhelm you. Start with what you have and focus on building a habit. Saving something is always better than saving nothing. Over time, you can work on increasing both your income and investment contributions.

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