Investing is a common financial goal for the New Year.  However, between paying bills and just trying to keep everything together, where is the additional money going to come from?  The good news is once you know where to get the money, then you can start investing.  But where does the money come from?

Although the 7 strategies shared in this post may not seem like they yield a whole lot of money, it is important to just get started so you can begin to build momentum that will help to provide the motivation and encouragement needed to keep going.  Also, when you start investing early, you have the benefit of time which allows you to benefit more from compounding (with time, your investment has a longer time to grow and then those earnings continue to be reinvested).  This ultimately allows you to invest a smaller amount of money over a longer period of time and see a larger benefit than if you invested more later.

According to Ellevest, a dollar invested earlier in life “can be worth more (in some cases, a lot more) than a dollar invested later on in life. That’s due to the magic of compound interest, aka “the most powerful force in the universe.” Compound interest means that you’re earning money on top of the money you earn in market returns. (And “returns” are what they sound like — the money that comes back to you from market gains or losses.)”

Therefore, if you want to start investing or grow your current account and don’t know where the money will come from to fund the account, then consider the following 7 ways to fund your investment account if you don’t think you make enough to start investing.

Strategy 1: Shop with Rakuten

There is a site named Rakuten that pays you back for shopping. When you open an account, you shop through your Rakuten website and then you will receive a check in the mail with the cashback that you earned. This is a great way to build a savings cushion doing the spending that you would have done anyway.

If it seems like a small amount, just remember every little bit counts. Even if you earn $100/year with cashback, that is $100 more than you would have otherwise contributed and it is also not more directly coming out of your pocket (assuming you aren’t spending more than you would normally to earn more cashback).

Strategy 2: Cut your costs and apply the money.

For many of us, there are areas in our spending that we can cut to free up extra money. For example, I recently went through the process of re-evaluating my spending to identify new areas to cut. I recently canceled a subscription that I love, so I could save extra money.

Similarly to my story, there are other areas in your spending that you can rethink to free up additional money to start investing.  This could include starting to buy used clothing instead of new. Used clothes can be purchased at a fraction of the cost of new clothes.

Also, do a deep dive of your current spending habits.  Print off the last 3 months of your bank statements and then review those statements to see how you have been spending.  Chances are you have areas where you are spending that can be reduced or eliminated altogether. Sometimes it just takes seeing exactly where our money is going to start making the change.

Strategy 3: Sell your clothes, your children’s clothes, or items no longer needed.

One weekend I attended a personal financial seminar. The speaker shared a story about how he made an extra $900 in one day just from selling his own stuff. He decided to do it because he noticed how much stuff he had at home that wasn’t being used.

One day he saw an advertisement for sellers to attend a large consignment and resale event that was going on in his city. So he asked his wife and kids to gather up the items they no longer needed so they could sell them at the event. It turns out they were able to sell enough items to earn $900! I share this to challenge you to ask yourself, how much stuff do you have laying around the house that you can sell and then apply that money towards your investing goals? While I’m not going to promise that you can earn $900 or more, I’m sure you can earn something.

Search the internet the find a consignment event near you, subscribe to your local parenting magazine, look into sales via your local community or PTA, search for local Facebook buy/sell groups, check out ThredUp, or a local resale store.

Strategy 4: Eliminate Late Fees

Late fees add up quickly. Just imagine paying a bill late every month and each late payment included a fee of $15. Over the year you would have paid $180. What could you have done with the extra money? Reevaluate how you structure your bills to ensure that you have adequate cash flow to pay your expenses on time. Also, consider setting up automatic payments to minimize the likelihood of paying bills late.

Strategy 5: Eliminate Unused Subscriptions

Look at your bank statements to identify subscription services or automatic monthly expenses that you don’t use. For example, if you have a gym membership that goes unused, then cancel it. If you have multiple streaming services that you don’t use, then cancel it. To avoid wasting money, don’t pay for things that you don’t use or need.

Strategy 6: Reduce Food Waste

According to a study by the National Resource Defense Council, the average American family wastes about $2,200 of food per year. That’s like throwing money away.  It turns out that two-thirds of household food waste is due to food spoilage because it wasn’t used in time. The other third of food waste comes from cooking or serving too much food.  Imagine what we could do with that money!

To reduce food waste consider these strategies:

  1. Survey your kitchen prior to going grocery shopping
  2. Buy less.  Shop with a list to avoid excess food purchases or purchases just because the item is on sale
  3. Only buy fresh produce that you know you can use
  4. Swap fresh for frozen.  Buy more frozen veggies (and some fruit) to avoid risk of waste
  5. Know the expiration dates. Develop a strategy to freeze or use items you haven’t consumed within a certain period of time

Strategy 7: Use your windfalls strategically.  

Windfalls are income that is outside your normal, straight-time play.  For example, these can include tax refunds, bonus checks, gifts for you, etc.  When you receive one of these things you can allocate a portion of the windfall towards your investment account.  This way you can still work towards your investing goals while still having the flexibility to use the remainder of that money towards other financial goals or even just doing something extra for yourself.

The key is that once you start freeing up and finding extra money, make sure that you develop a plan to ensure that the savings get deposited in your investment account. For example, if you know when you will receive the email check, don’t look at it as extra household income. Immediately deposit that money into your investment account.  This way as you free up money for your investing, you can start investing today!

Stay tuned for the next post in our investing series.  In the post, The Biggest Investing Mistake Women Make, we will discuss the biggest money mistakes women tend to make and what to do about it.

Disclosure:  This post may contain affiliate links. I may receive commissions for purchases made through links in this post.

About Aisha

Aisha Taylor of FNPhenomenal

Aisha Taylor is a single mom of twins, personal financial coach, work from home entrepreneur, and #1 Amazon Best Selling Author of the book “5+5 FNPhenomenal Ways to Save $100 This Week Without Killing Your Lifestyle.” Aisha has been featured in ESSENCE, Jet Magazine, and Black Enterprise. She is also the Founder of FNPhenomenal (Frugal –n- Phenomenal), a movement designed to help single moms create a vision for their lives, craft a financial strategy to support that vision, and show them that phenomenal living is possible. It’s time for you to be Financially Phenomenal!

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Learn 7 Ways To Start Funding Your Investment Account Even If You Don't Think You Make Enough.  This is an amazing way for single moms to build an investment account and still pay their bills.