Young Money: Micro Investing

In-depth budgeting and saving can be hard for some people. Maybe you’re not at the age where you really need to be thinking about savings that much. If you’re not looking to make any changes to your financial habits, micro-investing might be a good choice for you.

Micro investing apps like Acorns are the modern day equivalent to a change jar. Often, they function by rounding up your debit card purchases to the nearest dollar and depositing the extra in an investment account. This way, you don’t really miss the money that gets invested but you can still end up with some sizable savings.

Micro investing platforms are particularly good for young investors because they allow you to invest with no minimums. Normally, you’d need to save up until you have enough for at least one share of a company. Micro investing platforms use fractional shares that are diversified across a variety of investments, so they are both easy to get into and low-risk.

Another advantage of micro-investing as opposed to regular investing is the comparatively low cost of fees. More traditional investment platforms may charge a fee per transaction, while micro-investing platforms generally only charge a small monthly fee, around $1.

While micro-investing alone won’t give you anywhere near the savings you’ll need for retirement, it’s certainly better than doing no investing at all. You’re going to want to do more in the long term. In the short term however, micro-investing can be a good way to get a rainy day fund started and it definitely will not hurt to try.