How to Invest Small Amounts of Money

‘Look after the pennies and the pounds will look after themselves’. Well, pennies and even pounds don’t go that far these days but the logic behind the statement is still valid. If you can avoid wasting small amounts of money and save a little ready cash, the benefits will be great. Here are some of my ways to invest small amounts of money.

We have always kept a loose change jar at home. Usually we keep all small copper coins in one, such as pennies and two pence’s. In the other we keep five pence’s, twenty pence pieces and ten pence’s. In other words small silver coloured coins. This leaves us with some small change for the bus or whatever, whenever we need it, but these little sums soon start to add up and are good for investing.

Open an instant access ISA, Individual Savings Account, if you live in England. Many of these accounts, like ours, have instant access and only need one pound to open them. You could use your spare change to open such an account. These accounts pay interest tax free, if you are a tax payer, and so make more money for you. Legally you are only allowed to hold one of these accounts, per person, in any one tax year. We set up a small direct debit from our salary accounts so that some money went into our accounts on a regular basis. Initially we only paid ten pound a month in but it was realistic and enough for us at the time. We have since increased this plus you can always pay little extras in at any time.

Once your savings have grown you may feel comfortable moving some of them to more of a long term investment. Maybe a bank account which pays higher interest but limits your access. It’s always wise to have some cash, though, that you can access quickly if an emergency occurs. I know the ISA’s are a British thing but I assume other countries have similar accounts if you research what is available.

The good thing about saving loose change is you won’t really miss it. Most of us hate carrying lots of heavy change about. If you find that you save well and soon have lots of change many supermarkets now have cash converting machines which will swap this change for notes. However they will charge a small fee. Local stores may willingly take it off your hands, with no fee, as it will save them a trip to the bank .

Once you get into a savings routine or habit you will find that the pennies soon grow into pounds. The National Savings in England have many investments that require only one hundred pounds for a five year investment with a bonus payment at the end. My hubby also is a member of his companies share-save scheme. These schemes are good as he can join a new one each year for as little as ten pound a month. This means that there will always be one maturing each year. The share price is guaranteed and really you are in a win win situation, unless there is some worldwide financial disaster, and then that would hit everyone no matter where people were investing.

However little you earn never exclude saving. Give the sales a miss as, those clothes that you were not going to buy in the first place, are actually an added expense. Instead put the money you would have spent into your savings and watch them grow.