An investment account is set up with the aim of long-term growth in the funds deposited. It can have many different purposes, including saving for a child’s college education or for your retirement. An investment account can also simply be a way to grow your money. There are several possible avenues for funding this account.
This is the easiest way to fund an investment account. With automatic deposits, you never see the money from your paycheck since it goes into your account immediately. This means you are never tempted to spend it. If you have a retirement fund through your workplace, this is probably already set up for you. If you are not already taking advantage of it, you should do so. Even if you can only put aside $25 from each paycheck, it is worthwhile because this money will compound and grow over the years. Furthermore, your company may offer matching funds. If you have set up your investment account with a bank and you are paid by direct deposit, you may want to talk to your bank about putting a certain percentage into the account monthly.
Take Advantage of Lower Interest Rates
If you want to fund your investment account but feel like there is no room for it in your budget, look again. How much are you paying in interest on your credit card bills, your student loans, your car loans and your mortgage? What are the chances of bringing those interest rates down? It may be possible to refinance your student loans and still make one easy monthly payment at a much lower cost. You can then use what you have saved. You can look into being able to refinance your car loan and your mortgage with similar results. For credit card bills and other debts, look into consolidating your loans by taking out a new one with a lower interest rate and using that money to pay off those other debts.
Just as you can shop around for loans that give you a better interest rate, you can shop for better prices on other things as well. One place to start is with home and auto insurance. Call around or look online, and you will likely find that you can save hundreds of dollars annually. Some agencies will offer deals if you get your home and auto insurance from the same place.
By carefully tracking your spending, you can examine other places in your budget to save money as well. For example, you could start going to a less expensive gym or skip the gym altogether and get to work on your bicycle each day, saving money on commuting as well. You can find that you’re eating out more than you really need to or spending too much cash on entertainment. As the saying goes, “Pay yourself first,” and if you think about putting money into an investment account as prioritizing yourself in a way that spending thoughtlessly does not, you could then be more motivated to save.