Learning how to make money with a tight budget can be one of the biggest financial challenges. With a small amount of money, you have less margin for error.
Getting it right the first time becomes more important than when you have some extra cash to use as a cushion. One of the first steps is to prize $100 out of your regular budget. This should be money that is not needed for housing, food, clothing, transportation, or other basic expenses.
We’ve borrowed a few and added a couple of our own. Some of the money-making methods might surprise you.
Pay Down Your Debt
If you are singing the overcharged credit card after holiday blues, this can be a big one. But even if your monthly payments are up to date, you can save a lot of money by paying ahead on accounts.
For example, if you are in the early years of a mortgage, just $10 extra on the principal can reduce the number of months you’ll be shelling out for that part of your housing by as much as a full year.
Saving for College on a Tight Budget
Whether you are setting money aside for your own education or for your children, any cash that you can use instead of expensive student loan funds is money earned. That’s why should know how to invest 100$.
Student loan funds can actually double through missed payments, deferments and even pay-according-to-income arrangements. Think how great it would be to graduate without a looming burden of debt.
Start a Banking or Credit Union Savings Account
No, you won’t get rich with a passbook savings account, but you can use it as emergency funds. Imagine having cash on hand the next time you need a car repair, an emergency room visit or have a pet that needs an unexpected run to the veterinarian.
It can even cover that impromptu office party, baby shower, or Boss’s Day gift that wasn’t in your budget. That frees up your credit card for serious emergencies that exceed your savings.
Open an Account with a Stock Broker
Sometimes these investment accounts are available through your workplace, sometimes you might need to research for one on your own. You won’t be able to purchase a lot of stocks for $100, but your broker can add your money to that of others, which will help all his clients out. Anybody can open an account with a stock broker, even those on a tight budget.
Sometimes you can set an account like this up as a direct deposit using before-tax dollars out of your personal paycheck. Often, you can select what percentage of your portfolio will go into low-risk securities and how much will go into higher risk (and higher profits) ventures.
Purchase U.S. Savings Bonds
Yes, the United States government is in debt. But did you know that a significant portion of that debt is to tax-payers who have invested in bonds?
U.S. bonds are not likely to make you rich, but they can be an ace up your sleeve when you hit a tight budget crunch. If you are not a U.S. citizen, you can probably purchase bonds for your home country.
Certificate of Deposit or CD
You might not be able to purchase a CD with your first $100. You might have to slowly build up to the purchase price, using your regular savings account.
CDs are a nice compromise between low-paying savings accounts or interest-bearing checking accounts and more difficult-to-manage securities. Your money is usually engaged for six months to a year, but you do gain a higher interest rate.
Retirement Savings on a Tight Budget
Making savings for retirement is very important. With the right employer, you won’t have to invest $100 upfront. Your retirement, 401K or other savings account can be deducted from your paycheck.
Many employers will match your savings amount. Some will allow you to invest your money as a share in the company. If you are confident in your company’s ability to make money, this can be a win-win situation for you and your employer.
Conclusion
Not quite what you expected? Making money isn’t rocket science, thank goodness. It can be done by ordinary people like you and me.
All it takes is a little penny pinching to get that first $100 together, or an arrangement with your employer if you need a little help with will-power.
