What Do I Do with My Spare Change?

Learning to be proactive with my money and financial habits
MARCH 2018
Nour
G.
Urban Studies and Planning

I am now at that age (25!) where I have become too old not A) to be fully aware of my financial situation and its grim reality, and B) to realize that I need to begin investing what I have if I plan on retiring. Now this thought scares me terribly, as I’m sure it scares many people in their mid-twenties. I have never really invested in anything before – aside from placing the money I had in a savings account that had minimal, minimal interest. Especially now, at a time when I’m a graduate student with no real income coming in, I slowly see the savings I have amassed from three years of work in the corporate world dissipate. This sense of urgency only continues to grow.

Over winter break, I had found out that many of my friends had begun investing in cryptocurrency and because they had timed it right, had made thousands of dollars in profit. A slow feeling of panic began to fill me. A lot of people seem to have their act together and seem to know exactly what to do and when to do it. Why wasn’t I the same way? I had told my fiancé earlier last April that we needed to invest in Bitcoin, so why didn’t I follow through? I, at least, had the instinct that there was a movement towards cryptocurrency, but I didn’t act on this instinct – and this doesn’t seem to be something that’s unique to me.

A lot of us twenty-somethings simply don’t know where to start, and that’s one of the biggest issues. We don’t know whom to ask, what to start researching, and where to go. Most of the people I ask for advice have either given me conflicting advice or advice so vague that I don’t really know what to do with it.

However, I feel like that the biggest problem lies with myself. I haven’t been proactive enough with my money and my financial habits. Although I’m not a lazy person by nature, I seem to be quite lazy when it comes to this. Is it because I know that my parents will always be able to support me financially if worst comes to worst? Or is it because I haven’t ever faced any real financial setbacks during my short time as an adult? Either way, I need to change my perception and, in turn, my actions.

Thus, after a long amount of time researching the best options for myself, this is what I pledge to do within the next month:

  1. Save $3 a day 
    Now I know that this might seem like a very small amount, but it’s taking baby steps that’ll really make a difference. Three dollars a day is almost $100 a month, which is over $1000 a year! Imagine having $1,000 dollars by December without really feeling like you did much to earn it. This amount of money will be good to have on a rainy day, and so I would put that aside. And honestly, if I give up by the chickpea fritter sandwich I have three times a week, I’ll have done it without difficulty. I’ve put down $3, because that’s a plausible number for me. Gauge what’s good for you: go as little as $1 or as high as $10. Any amount saved can have a significant effect.
     
  2. Go high risk
    We’re young. Most of us, at least, aren’t married yet and do not have the responsibilities that come with settling down like paying off a mortgage or paying for preschool. If there’s a time to go big or go home, it’s now. Because we have our youth, we’ll hopefully be able to bounce back if things turn sour and recover much quicker than people who are older. Let’s use it to our advantage, and so when looking at various investment options, look into investments that are high-risk, but also yield a high return, investments like cryptocurrency.
     
  3. Look into millennial ways of investing.
    I use the term millennial because there are so many new investment opportunities that weren’t there for the generation above us. Companies like NextSeed and SeedInvest help you invest in local restaurants or fintech startups. A lot of the research has already been done by them, and so you can read about essentially every aspect of these businesses before you commit. Acorns will invest your spare change in a diversified portfolio of your choice, i.e. if your sandwich cost $8.75, Acorns will round up that expense and invest the remaining 25 cents. It’s an easy way to have your spare change work for you. These are just a few of the bevy of investment opportunities out there, and it’s a good place to start. Do some research on your own and then narrow down the choices until you feel confident about two or three. I would then talk to someone whose financial intuition you trust – a parent, partner, or pal – and then just go for it! By that point, you’ve done all that you can, and you just have to take the plunge.  
     
  4. Listen to my gut
    Looking back, I’m glad I didn’t get into cryptocurrency frankly because I hadn’t done my research, and the idea of money I can’t really see freaks me out. I think it’s important when investing to understand the risks, but also feel comfortable with what you’re putting your money into. After all, the reason why I’m doing this is so I can sleep easier at night.

I really hope that going forward with these steps will not only help quell the growing sense of urgency, but also provide me with a self-assuredness in my ability to take care of myself and my future.