Advantages of change investing
Micro investing is a concept in which you can invest your spare change daily. By making small investments, you can accumulate savings that you would otherwise not invest. It is a household habit to collect spare change daily and put it in a piggy bank. But with online payments, this concept is changing.
There are apps that help you to invest your daily change with digital payments. You can sign up for an account with the app and register your debit card. Each time you make a purchase, the app will round up the transaction to the nearest whole amount and invest the difference into an investment account.
For example, if you buy a cappuccino for $3.50 then this amount will be rounded up to $4.0 and $0.50 will be invested. If you buy the same coffee 20 times a month, then you will have $10 at the end of the month and $120 at the end of the year. change investing is a better option than not investing at all.
How do the apps work?
The micro-investment apps track your SMSes that are related to financial transactions and other data on the device. Each time you make a digital payment, the app will send a message to invest the spare digital change. These apps automatically round up the amount to the next 10 or multiple of 10.
The app offers the ‘Change saving’ option, which is easy to set up and manage. You can get started by using a few clicks. This option helps you to save small amounts of money that do not bother you.
If you do not want the app to track your SMSes, then you can choose to invest a small amount of money daily using SIP (Systematic Investment Plan).
Benefits of investing your spare change
- An important feature of this investment is being able to invest small amounts of money. These platforms help to develop the habit of investing in the users and help them to learn about investing.
- This type of investing is suitable for young investors as there is no minimum investment limit. The ability to invest your spare change will help to inculcate the idea that it is better to invest rather than spend it.
- The young generation is tech-savvy and transacts digitally almost daily. Teaching them to invest their spare change will help them save money. The apps help you to keep track of your expenses.
