Painless Ways to Invest Every Month

Sometimes it seems as though investments are for the rich. After all, you have to have a lot of money to invest, right? Well, wrong. There are, in fact, painless ways to invest money every month. It all starts with figuring out how much you can afford to spare from your budget each month.

How much can you afford for investments?

This is the first question you have to answer before you can start a monthly investing plan. You need to figure out how much you can afford each month for your investing strategies. Look over your monthly budget, and figure out how much you have left over after expenses. And by expenses, I mean things like bills, groceries and housing. Things that you need. It is estimated that the average household wastes 10%-15% of its income each month. You can put some of it to work for you. If it's $50, that's $50 that you can use on investments.

Have the money automatically deducted

After you've decided how much you can spare each month for investments, have that money automatically deducted. Whether you have it taken out of your checking account, or even directly from your paycheck (remember that high-yield savings accounts and retirment accounts are investments, too!), an automatic deduction is something that you don't have to try to remember. Just enter it into your ledger or your personal finance software at the beginning of the month, and it's as if you never had that money to begin with. That way you won't miss it as much.

The power of dollar cost averaging

One of the greatest investing strategies that you can use is called dollar cost averaging. This is why you can invest smaller amounts, like $50, and still benefit from investments. Here's how it works: you buy partial shares. Let's say you have $75 to invest each month. A company's share, or a mutual fund share, costs $45 per share. Your $75 basically gets you 1.66 shares. It may not seem much, but it starts to add up. Dollar cost averaging is one of the most advantageous ways to invest.

Online discount brokers

Another way to enjoy painless investing each month is to go with an online discount broker. Discount brokers usually charge a flat fee, rather than commissions. And, often, dollar cost averaging doesn't cost so much because once you get an automatic withdrawal going, it doesn't cost much to invest. It's when you sell or trade that costs the fee for many brokers. So you can save more of your own money when you go with an online broker. Just be aware that you will have to make most of the investing strategies yourself, and do the research on companies.

Investments are a great financial planning move. And, thanks to the investment tools available today, it is possible for anyone to begin investing, even with only $50 per month. Everyone should have some sort of investing plan, even if it is nothing more than retirements accounts. And painless investing is possible if you do it every month, and take steps to ensure that you are getting the best value for your investments.