Yahoo Finance 7 Expenses To Cut To Save $100 Per Month and How To Invest It for Maximum Gains
Cutting expenses is on many people’s minds these days as costs of living remain higher than usual. While finding ways to carve out even $100 per month might not seem like a huge savings, that money can add up over time.
Moreover, if you invest that money in ways that take advantage of compound interest, you can see that small amount grow exponentially.
Explore More: 3 Types of Investments Predicted To Plummet in Value in Summer 2024
Read Next: 6 Money Moves You Must Make If You Want To Be Like the Wealthy
Carving out $100 worth of expenses is not as hard as it may seem if you look closely at your spending habits. Here are seven expenses most people can cut to free up $100 of investable cash.
Wondering what to do next? There are some suggestions below on how to invest $100 monthly with the potential for big returns — and here are few more ideas.
Earning passive income doesn't need to be difficult. You can start this week.
Dining Out
If you think of “dining out” as a meal at a fine restaurant, think again — a salad grabbed on the go for lunch, a fancy coffee drink or a fast-food meal all qualify as dining out and if you’re like the average American, who spends an average of $166 per month on dining out, according to U.S. Foods, cutting out this one habit would save you well over $100 per month, which you could put toward investing.
Find Out: I’m a Self-Made Millionaire: 5 Stocks You Shouldn’t Sell
Cable TV
If you’re still attached to cable TV options over streaming entertainment, you may be spending — like the average American — around $144 per month, according to CNET. If you cut your cable and choose one affordable streaming service instead.
Streaming Services
That said, be careful if you drop cable TV that you don’t go overboard on your streaming subscriptions, either. The average household spends around $46 per month on streaming entertainment. While individual subscriptions can be relatively affordable (Netflix starts at $6.99 a month and Hulu starts at $7.99 a month), by limiting the number of subscriptions you have, you can save more money.
Brand Name Foods
It’s easy to gravitate towards brand-name food items because they’re familiar and they often have such robust marketing campaigns you’ve bought the hype that it’s somehow better than generic options.
However, most generic options — particularly those at trusted places you already shop — have very similar ingredients (if not the same) for significantly lower prices. These prices are sometimes as much as 30% less, according to The Dinner Daily blog. A simple shift could lead to deep monthly savings.
House Cleaning Services
While undoubtedly it’s nice to have someone else help you keep your home clean, this kind of service comes at a steep price. Hourly rates for this work range from $25 to $75 per hour and the service typically takes several hours, according to HomeGuide.
Just having a housekeeper twice a month could be running you well into several hundred dollars. Cutting back or cutting it out altogether and taking over the work yourself could you save you a bundle.
Beauty and Personal Care
While personal care is a very, well, “personal” area, it’s also an area people tend to overspend in. In fact, according to a 2024 consumer culture report, beauty and personal care was the category that 43% of respondents said they planned to splurge in during 2024.
Whether you’re getting expensive haircuts, fancy facials, frequent massages or just buying a lot of products, there’s likely an opportunity to cut back on the frequency or amount to save at least $100 per month.
Bills You Haven’t Negotiated
While you can’t cut your essential bills, you can often negotiate them or leave a service provider for a cheaper one. This can include things like your cell phone and internet service provider and your car or home insurance. If you’re experiencing financial hardship, you might even be able to negotiate your utility bills.
Start Investing Your Extra Cash
So now that you’ve begun to carve out that extra cash, it’s time to start putting your money to work. You don’t want to make risky investments, so you’ll want to opt for things that have a reliable track record. This is not the time to invest in cryptocurrency, for example.
Start With a High-Yield Savings Account
As you let your money accrue, pick a high-yield savings account with the highest return you can find (that is FDIC insured) to start earning immediate interest as you decide where you want to move your money next. The more you put in, the more interest you’ll reap.
Put a Chunk Into a CD
let’s say you save up your extra $100 for a year and find yourself with $1,200 (or more if you’re earning interest on your savings). If you’re still not sure about where to invest, start with a CD, again finding the best rate for the shortest terms. CDs are a fixed investment with no risk, not dependent on the whims of the market.
Open a Brokerage Account
If you’re ready to take a step into investing in the stock market, consider opening a brokerage account, which allows you to buy and sell stocks, bonds and other investment assets. You can educate yourself on the ins and outs yourself or work with an online broker. However, be aware of fees and consider waiting until you’ve saved up more money to make any fees worthwhile.
Also be aware that you are now at the whims of the market, so you could see some big gains, but also big losses. Most of the time, the best strategy is to invest over a longer time horizon, to average out your gains.
Invest In Real Estate
While $100 per month won’t be enough to buy a property with, you can invest in real estate through crowdfunding platforms, such as Arrived Homes, where you earn dividends on a variety of real estate options — though there are often rules for how quickly and how much you can withdraw.
Additionally, you may be able to buy into a real estate syndication when you’ve saved up enough money, in which you pool funds with other investors to buy properties that you couldn’t afford on your own and then, when the times is ripe to sell, share the profits.
Max Out Retirement Accounts
If you’re benefiting from a retirement account with employer-matching funds, an extra $100 can immediately become an extra $200 with the match-so be sure to drop extra money in to get that maximum match.
Additionally, if you have your own self-funded retirement account, you’re typically earning a better rate there than in a savings account, getting tax benefits and preparing for your future. All around, investing in your retirement accounts is always a good strategy.
While $100 per month may start out small, it can quickly add up over time with one or more of these savvy investing strategies.
More From GOBankingRates
7 Reasons A Financial Advisor Could Boost Your Savings in 2024
I'm an Economist: Here's My Prediction for Social Security If Kamala Harris Wins the Election
The 6 Most Harmful Myths About Debt -- and The Surprising Reality
This article originally appeared on GOBankingRates.com: 7 Expenses To Cut To Save $100 Per Month and How To Invest It for Maximum Gains
