If your parents don’t have much in the way of retirement savings, there’s an excellent chance that they are carrying a significant amount of debt. Unfortunately, debt goes hand-in-hand with a lack of savings. Retirement can be the moment of truth for the debtor class, since there will be no assets to draw an income from. Meanwhile, debt will represent a reduction of future cash flow.
For this reason, if your parents have no little or no retirement savings, one of the best ways you can help them is by helping them to get out of debt. Retiring when you’re in debt is not a good idea so they should continue earning income until their debts are significantly reduced.
Here are a few ways you can help.
Help Them Create a Budget
In general, when there is an imbalance between savings and debt, there is typically a lack of budgetary discipline. Too much money is going into consumption, and not enough is going into savings. You can help your parents work through that dilemma by helping them to create a budget.
You can have them set up a free budget software, such as Mint.com. That will help them to track their spending, as well as to determine where they can make cuts in their budget in order to free up money to payoff their debts, as well to begin saving some money for retirement (it’s never too late!).
No other assistance that you offer your parents will do much good if they are not able to implement a basic budget. A budget is the method that creates the discipline necessary to improve your financial situation.
Help Them Develop Additional Income Sources
Sometimes what a budget reveals is that there’s simply not enough extra income to begin paying off debt. This happens because debt is a vicious cycle – as the level that you owe increases, the ability to service it on your income declines. It may be entirely necessary for your parents to find a way to increase their income, and dedicate the extra cash flow to paying off debt.
Though it may seem readily apparent to you that they need additional income, but to a person approaching retirement, the idea of working more might be seen as an oxymoron. Though it’s not pleasant to admit, a lot of people believe that they are entitled to retire even if they don’t have the resources to do so.
You may have to help them identify their talents, skills, and specific interests. In doing so, you might help them to determine what it is they can do to earn extra money. If you have a business, you might consider hiring one of your parents for part-time work, or even on a contract basis to do very specific work.
You can make it clear that the extracurricular income activity is just a temporary venture until the debts are paid. If they want to have anything that looks like a decent retirement, that can provide the necessary motivation.
Offer to Pay One or Two of Their Debts
If your parents have not saved much for retirement, it probably won’t be practical for you to provide them with direct support. A better way to do this may be to payoff one or two of their loans, maybe their biggest ones. That will enable you to make a one-time contribution to their retirement, that would improve their cash flow but not require regular checks from you.
Let’s say that your parents have a car loan with a $15,000 balance, and a monthly payment of $500. By paying off the loan for them, it will be the equivalent of providing them with direct support of $500 per month – only you won’t have to be writing checks for the rest of their lives.
Naturally you have to get some sort of an agreement from them that they cannot take a new car loan anytime in the near future. But this may be a way to enable you to provide direct support, without making them into full-fledged dependents.
Get Them Into Debt Counseling or Debt Consolidation
It’s unfortunately true that some people never get serious about a debt problem no matter what you do. And it may be even more complicated since you are their child, and the historic nature of the relationship may not accommodate them taking advice from you.
But if they have a debt problem, and you are unable to help them address it, you may need to point them to debt counseling or even some sort of debt consolidation plan. They may need to participate in some sort of a formal plan that will help them to get out of debt. If that’s the case, then it’s best to get them the help they need as soon as possible.
The sooner that they get out of debt, the better it will be for them once they reach their retirement years.
In Extreme Cases You May Need to Recommend Bankruptcy
This should never be a first resort for people with a debt problem, but it is also true that some people get so deep in debt that they can’t possibly get out. This is even more pronounced as people get older, approach retirement, and have neither the energy nor the motivation to tackle an out-sized debt problem.
If that’s the case with your parents, it is entirely possible that the most constructive way that you can help them is by directing them to a bankruptcy attorney. Many people who are in debt live in denial about the extent of their problem. Denial makes it easier for them to live with debt day-by-day, but also guarantees that they will never get out from under it.
It may be the best thing that you can do is to encourage them to file bankruptcy, wipe their slate clean, and start fresh. That will not only eliminate their debt, but it will keep them from borrowing serious money for at least a few years. And once their debts are gone, they may be able to survive in retirement even on a very limited income.
All of these are tough choices, but there aren’t many options available for people who are entering the retirement years with little or no retirement savings. Pick the best strategy for your parents situation, and do what you can do to help them get out of debt.
Working during the retirement years is not a subject that a lot of people want to consider. But if your parents will have few financial resources that will enable them to retire fully, working may be the only option. But it may not be as bad as it seems on the surface. How you present the idea to them can make all the difference in the world.
Why Your Parents May Have to Work During Their Retirement Years
There are a variety of reasons why your parents may have to work during their retirement years. Some have to do with a lack of preparation, but others have to do with the fact that times have changed, and some of the old retirement provisions just don’t exist.
Here’s some examples:
- Lack of a traditional pensions
- Social Security benefits aren’t as high as they expected
- Lack of adequate retirement savings
- Lack of adequate savings of any kind
- Too much debt
The last three reflect a lack of preparedness, however sometimes these are the result of major medical events, the loss of a job in the years leading up to retirement, or large costs associated with educating children.
Whatever the reasons for the lack of retirement income, it’s important that you are not too judgmental, and that you focus your efforts on pointing them in the right direction.
Framing The Silver Lining of Continued Employment
While it’s true that most people envision retirement as a time of not having to work at all, it’s more important that your parents are able to survive during that time. It’s actually not the worst outcome that could happen either.
Rather than emphasizing the fact that they won’t be able to retire, instead sell them on the idea of semi-retirement. This means that though they will have to work in order to survive, they shouldn’t have to work as hard as they did throughout their lives. They can still retire from their primary occupations.
This could be a matter of using continued employment income primarily as a supplement to Social Security benefits.
That may not give them all of the perks of the traditional golden retirement, but it should enable them to be comfortable and to have more time for leisure activities than they may have had in the recent past.
Encourage Them to Continue With Part-time or Consulting Work in Their Current Field
Generally speaking, the highest paying form of work will come from doing something similar to what they are doing during their careers. That would mean converting a full-time career into either a part-time job or consulting within the current field.
20 to 30 hours per week could be that they need in order to supplement their Social Security benefits. They can choose to work either so many hours per week, or even during busy times in their industry. That would leave them with short retirement periods in between assignments.
Encourage Them to Try Their Dream Career
Semi retirement may be the perfect opportunity for one or both of your parents to pursue their dream career. That can be an occupation that they always wanted to consider during their working years, but were unable to due to high expenses, or to the fact that the transition would result in a large decrease in income.
But without dependents, and having the benefit of Social Security income, retirement may be the time to pursue that dream career.
One of the side benefits to a dream career is if they really like the work that they’re doing, it won’t feel like work, and they may find themselves enjoying life more than ever.
Encourage Them to Start Their Own Business
It’s probably true that most people have some sort of business idea that they’ve played with, even though they never followed through with it during their working years. Now may be the time for your parents to put that kind of plan into action.
A business is not just a chance at providing yourself with an income. It can also represent the adventure of a lifetime. Not having a boss, being free to pursue any direction they like – and being in a business they enjoy – can be more rewarding than lifetime of sitting by the beach or playing golf.
And if the business is successful enough, they might find themselves able to fully retire in another 10 or 15 years. This can come about as a result of either earning enough money to save for retirement, or being able to sell the business for a large lump sum when they’re ready to retire completely.
If You Have a Business, Hire Your Parents
If you have your own business, consider finding a way to hire your parents. You can hire them either on a part-time basis, or even on a seasonal basis during the busy times of the year for your business. This may take the pressure off of your parents in having to either find a job or start their own business.
Having to work in retirement might not be a virtue, but if it is the only way for your parents to survive, then it’s a topic that you are going to have to bring up. And if you have concrete suggestions as to how they can do it – in a more creative, flexible, and rewarding way – they may be more open to the idea than you might imagine.
Some people can’t wait to downsize their homes in retirement, especially if it means moving to a more pleasant location. It can be an outstanding strategy on so many fronts. But many more people resist downsizing even though it may be highly desirable or even entirely necessary.
If you’d like your parents to downsize, but they’ve been resisting – or you anticipate that they will resist – here are points that may help you to persuade them.
Why They May Not Be OK With Moving
The first point is understanding why your parents may not want to downsize in retirement. By anticipating these in advance, you may be able to work around them.
Here are common objections to downsizing:
- Habit – “This is where we’ve always lived” – it can be especially difficult for them to uproot after several decades in the same house.
- Emotion – A house isn’t just another possession, it’s a home; leaving it means letting go of memories, especially if they raised their kids in the house.
- Fear of change – Some people just don’t do change well.
- Fear of their own mortality – Moving out of their longtime home is seen as an acknowledgement that they are coming to the end of their lives.
- They distrust you – If you press the issue too hard, they may assume that you have a selfish motive. Or they may be unconsciously resisting the parent-child role reversal that often takes place between adult children and their aging parents. Tread lightly here!
- There may be no health reasons necessitating a move – for now.
Identify which objections your parents are likely to raise or have raised in the past, and be ready with a work-round. For example, if fear of their own mortality is the issue, stress the move as a shift to a new beginning in life. Or if they are in good health, emphasize that that’s the best time to make a move, since they can do it on their own terms, rather than being forced into it by a life event.
In addition, be ready to explain the many benefits of downsizing…
Lowering Their Monthly Payment
Living comfortably in retirement is all about getting your budget to fit within a reduced income. Since housing is typically the largest expense, reducing it can be the single best way to create some breathing room in an otherwise tight budget.
This can be especially significant if your parents live in an area that has high property taxes. Going from a home that has an $8,000 annual property tax bill, to one where the taxes are only $2,000, will save them $6,000 per year. That translates to $500 per month, and is practically a small pension.
Also, if your parents still have a mortgage on the home, trading down to a less expensive home could be a way of becoming mortgage-free. For example, if their home is worth $300,000 and they have a $100,000 mortgage on it, selling the property and trading down to a house that’s worth something less than $200,000 could enable them to buy it for cash, and make the old mortgage go away forever.
Freeing Up Capital
If your parents have lived in their home for many years, they may have a lot of equity in the property. If they are light on retirement savings, this can be a way to build up their investment portfolio quickly.
If their home is worth, say $500,000, they can sell it and buy a new one for $200,000 – and put $300,000 into retirement savings. Using the safe withdrawal rate of 4%, that would give them an additional income of $12,000 ($300,000 X 4%), or $1,000 per month. That, plus lower carrying costs on their new home.
Less Space = Less Maintenance and Lower Upkeep Costs
A larger home will naturally cost more to maintain. That includes landscaping, housecleaning, snow removal, as well as anything that needs to be replaced, such as the roof, the furnace, the central air conditioner, or even the driveway.
Some of that cost is also born through time and effort. The larger the home is, the more time that your parents will have to spend maintaining it. That may not be a problem when they’re younger, but as they get older it could become a burden. And if they have to pay people to start taking over those chores, the cost will become financial.
It’s an Excellent Strategy If They Are Financially Unprepared for Retirement
We’ve already discussed the financial benefits that downsizing can bring. But they can become critically important if your parents have little or nothing in the way of retirement savings. If they will be primarily relying on Social Security and some sort of continuing job situation, downsizing could be a move of strategic proportions.
In this case, the lower living costs, as well as the additional investment capital they can get as a result of downsizing, could be the difference between a fairly comfortable retirement, and an old age of perpetual struggle.
It’s Easier When Downsizing Happens Early in Retirement
Most people will have to downsize at some point during their retirement years, particularly if they live well into their 80s. At that point, necessity may step in and force it upon them. But making a move is always easier when it is done in the early years of retirement. At that point, your parents will have more control over the process and how it turns out.
In addition, the financial benefits that come from downsizing can last for the rest of their lives. This may be the most important benefit that you can introduce your parents to in the event that they are reluctant to make a move. If nothing else, downsizing early gives them the ability to settle in to their new lives, which will make the whole process go much smoother.
If your parents don’t want to make a move, introduce them to these benefits one at a time. It may take several years to convince them of the merits of downsizing, so you may want to begin as soon as possible.
You’ve probably seen the Discover commercials where a person finds their credit score on their statement and calls in to ask about the new score on their bill.
It makes sense that credit card companies would make this available to their customers; I’m surprised that more of them don’t. Now that Discover and a few others have set the precedent hopefully more banks will follow suit.
Of course you can see your credit report for free once a year but a credit report isn’t your credit score and your free credit report isn’t intended for the purposes of monitoring your credit.
Credit Score Changes
The nice thing about seeing your credit score on a monthly basis is it can alert you to any big changes. If you’re paying your bills on time and not opening up more lines of credit then your score shouldn’t really change that much from month to month. But if you do see a big change then it can alert you something isn’t right.
When you miss a payment it’s typically not reported to the credit agencies right at the end of your billing cycle. When the next bill is due if you haven’t caught up on your payments then the late payment appears on your credit report.
The later your payment is, the bigger impact it has on your credit score. A 60 day late payment is worse than a 30 day late payment and a 90 day late payment is worse than a 60 day late payment – so the sooner you realize you missed payment and correct it, the better for your score.
Automated Payments & Alerts
This is why I like using automated bill pay; to make sure my bills are paid on time and to alert me if one of them isn’t. However, technology isn’t perfect. There have been times when online bill pay has had hiccups.
Most major credit cards offer alerts that will notify you about events like an upcoming bill due or when a bill is overdue. However, there are things you might not be able to get alerts for like your mortgage or car payment.
As I mentioned above by the time you miss a payment and it’s reflected on your credit score some damage has already been done. However, the sooner you catch it the better.
Credit Score Monitoring
There are credit monitoring services that will keep an eye on your score for you, most of them charge some type of fee. If you don’t want to pay for updates then the credit score on your monthly Discover it ® card statement can be another way to stay on top of your credit score. Discover allows you to view 12 months of your FICO® Credit Score for free as well as key factors in why it has changed over time.
This post is published as part of the Discover Preferred Blogger Program.
It’s unfortunate but true that scam artists prey on the elderly. They often do this because a) the elderly often have a significant amount of money, and b) because the elderly, especially the very old, can often be confused. For this reason, you should consider ways to protect your aging parents from financial scams.
Here are some strategies you can use…
Put Their Phone Numbers on the Do Not Call Registry
This doesn’t guarantee that your parents will never get scammed, but it will certainly reduce the chances of it happening. Direct phone calls are one of the favorite methods that scam artists use. A convincing speaker can sometimes talk an elderly person into doing something that they couldn’t do either face-to-face or by mail.
Phone calls can be especially effective if an elderly person feels lonely. The caller can establish him- or her-self as something of a new found friend. The calming voice offering a solution to a problem can sometimes be a welcome intrusion.
You can sign your parents up for the Do Not Call Registry. It is a federal registry in which your phone number is restricted from solicitation calls for a period of three years. Callers who violate the registry can be severely fined for doing so.
Make Sure They Understand the Risks of Scams, Particularly to the Elderly
Your first, best line of defense in protecting your aging parents from financial scams is to make sure that they understand both the realities and the risks of participating in one. Your parent needs to understand that scam artists specifically target the elderly. They also need to understand that these people are not their friends, no matter how warm and sympathetic they may sound.
Your parents should understand that they should never give out personal information, especially their Social Security number or any financial account numbers. This includes not only bank accounts, but also investment accounts, retirement accounts, and credit card accounts.
A scam artist can either clean out an asset account, or run up huge charges on credit lines. All they need are the account numbers, and they can be on their way. Those won’t be hard to get if they can convince your parent to make even a small purchase, in which they provide an account number and the three digit CSC (Credit Security Code) code on the back of a credit card.
Ask Them to Discuss Any Major Financial Moves With You
Many elderly parents, resentful of the role reversal that comes late life, resist sharing financial information with their children. But as your parents enter into their eighties, or they become incapacitated in any way, it will be important for you to convince them to share information with you on any major financial moves they’re planning on making.
If there is resistance, reassure them that the purpose is not for you to gain control of their assets, but to make sure that others – who have no business having access – never get control of them.
If someone is attempting to scam them, but they discuss it with you first, you’ll be in a position to prevent the scam from becoming a reality. You may have to get deeply involved in the scam itself, in order to prove to your parents that it’s actually an illegal operation.
Take Over Their Finances If They’ve Already Been Scammed
This can be a difficult step, because it is often a sign to aging parents that they’re coming to the end of their lives and are no longer in a position to manage their own affairs. At the same time, it’s absolutely necessary. If they have been scammed in the past, you’ll need to get directly involved in their finances to the greatest degree possible.
The best time to do this is right on the heels of an actual scam situation. Hopefully, it won’t reach the point where money or critical information has changed hands. But just the fact that it is happening – and that your parents fell victim to it – could be all the evidence that you need to prove to your parents that you need to be closely involved in their finances.
Your purpose should always be clear – that you are getting involved to keep them from losing what they have, and not take it for yourself.
Financial Troubles Could Make Them Willing to Entertain Scams
This can be a serious X factor for your parents. If they have financial troubles, they are likely to be more vulnerable to scams than they would normally be. One of the most popular tactics that scam artists use is to convince the victim that the scammer can solve their problem. It could be too much debt, insufficient income, or a lack of savings. But whatever the financial problem is, its existence will make your parents more vulnerable to scams.
The best way to deal with this is to do what you can to help to improve your parents financial situation. That may mean that you may have to supply some cash to fill an empty bank account, or take over a debt payment, or even do what you can to help them find additional sources of income.
The very fact that you’re helping them with whatever the financial concern is, should raise your credibility in their eyes, as well as eliminate the perceived need to even entertain a potential scam.
Even if your parents have always avoided scams throughout their lives, you can never ignore the possibility that both awareness and defenses drop with age. Sometimes it can be the medications that they are on, other times it’s driven by emotions (mostly fear), and often by the aging process itself. What ever the source, it’s a problem at you can’t ignore, otherwise they can lose everything they have.
I’m not at all what you would call a car guy, but that’s exactly why I decided to write an article on this topic. As someone who knows little about cars, and has seen the check engine light come on in his cars more than a few times over the years, I’m starting to become something of an expert on this problem.
If you’re like me, or at least like the me that I used to be when I knew nothing about this, you probably panic anytime the check engine light comes on. While it’s almost inevitable that it will create an uneasy feeling – mostly because you don’t know exactly what it means – it’s too early in the process to panic. In most cases, it’ll be something less than a certified disaster.
Here are some steps you should follow if your check engine light comes on:
Keep Calm – It’s Most Likely Something Simple
To a person with no mechanical orientation at all, the check engine light coming on is unsettling to say the least. But it may help to know that in most cases, the reason that the light comes on is due to something that’s very simple, and highly fixable at a low price. It might even be something you can repair yourself.
Yellow Light OR Red Light/Flashing Yellow Light
In most cases when the check engine light comes on, it will be a constant yellow light. Less common are either a red light, or flashing yellow. There’s a world of difference between the two.
The constant yellow light is a true warning light. Its purpose is to alert you to the fact that your car is in need of repair, however it is not a critical situation. You can continue to drive the vehicle, at least for a short while, and at least long enough for you to figure out what’s wrong and what to do about it.
A red light or flashing yellow however mean something entirely different. If that is the warning signal you are getting, it’s an indication that whatever is wrong with the car is doing damage to the engine. That means it’s time to park the car, and have it towed to a mechanic without delay.
Many times there is no choice. When the red light or flashing yellow light come son, the car often stalls out only minutes later. But if it doesn’t, you’re going to have to act quickly to prevent more costly repairs.
What we’ll discuss from this point forward is what to do in the more common scenario of the constant yellow check engine light.
Get a Diagnostic Done – For Free
When the check engine light comes on – again the constant yellow light – you need to have a computer diagnostic done on your car. The check engine light is tied into your car’s computer, and will provide codes that will indicate what the problem is. It will generally list several, with the most severe listed first, and the rest appearing in descending order of importance.
Sometimes the codes point to different problems, and it can seem as though your car is about to die forever. But in many cases, when you fix the primary problem, the rest of the codes go away. This is likely due to the fact that a malfunction in one component of your car’s engine will affect others. Although there are times when multiple codes do actually indicate multiple problems.
Getting the diagnostic done is a simple process, and you can generally have it done for free if you go to an auto parts store, such as AutoZone. Many people decide to take the car to the dealer when the check engine light comes on, but this is the most expensive route. A dealer will often charge you as much as $200 just to do the computer diagnostic, but make you think you’re getting a deal because they’ll waive the fee if you have the repair work done in their shop – at an even more exorbitant rate.
But considering that the check engine light generally indicates a low-end problem, you should start with a free diagnostic at an auto parts store. It will let you know what the problem is, and you can decide how to proceed from there.
Consult With Your Automobile Brain Trust
One of the things I’ve done over the years – and that I strongly recommend if you are not educated when it comes to cars – is to create an automobile brain trust. This is the group of two or more knowledgeable car people who you can consult when these problems arise. They can be friends, family members, trusted coworkers, and yes, even your mechanic. When it comes to car problems, it’s best to have multiple opinions. That prevents you from paying too much for major repairs, when the actual problem may be something much less significant.
The auto parts store can give a general idea as to what the codes in the computer diagnostic mean. Armed with those codes – and explanations as to what they mean – go to your automobile brain trust and start asking questions as to which way to proceed.
It’s Most Likely Something Simple and Inexpensive to Repair
In the vast majority of cases when the check engine light comes on, the source problem is something simple, and relatively easy and inexpensive to repair. In fact, according to CarMD, the five most common check engine repairs are:
- O2 sensor (part of the emissions system, monitoring and helping adjust the air-fuel mixture)
- Loose gas cap (which will cost you nothing to fix)
- Catalytic converter
- Mass air flow sensor (monitoring the amount of air mixed in the fuel injection system)
- Spark plug wires (this is also a very inexpensive fix, but sometimes the problem is the connecting wires, which are a little more expensive to replace)
Generally speaking, none of these repairs are worth losing much sleep over. You might even be able to fix one or two of them yourself, or have it done by one of your automobile brain trust friends, and your car will be back on the road in no time.
If it isn’t something simple – and that is a possibility even with the constant yellow light – get your car into the shop. The possibilities could be endless. But not until you’ve tried all the easy stuff first.
Have you ever panicked when the check engine light came on, only to find out later that the cause was no big deal? It’s actually quite common.
Many of us feel overwhelmed by investing, partly because there are myths about how difficult it is to invest and partly because we don’t understand all the technical terms and concepts we read about or hear financial professionals use. However, investing doesn’t have to be hard, and you don’t have to be overwhelmed. Here are a few strategies to help you avoid feeling overwhelmed by investing:
Dollar Cost Averaging
One of the best ways to stop feeling overwhelmed by investing is to make use of dollar cost averaging. This is a strategy that involves taking smaller amounts of money and consistently investing. One of the reasons it’s so easy to feel overwhelmed by investing is due to the myth that you need to have a large chunk of capital to invest.
Many people think they need to have $10,000 or more to invest effectively. However, investing is easier than that. If you have as little as $100 to invest, you can build a portfolio with a site like Betterment. Many other discount brokerages will allow you to set up automatic investing with as little as $50 a month. Acorns, a new investing platform, will let you get started with as little as $5, and you can invest pocket change if that’s all you have.
While you want to eventually increase the amount that you set aside each month, the reality is that you don’t need to wait until you have a lot of money to invest — and you shouldn’t wait. Use dollar cost averaging to get in the habit of investing consistently, and you can build up your portfolio over time, without it being too difficult.
Index Mutual Funds and ETFs
One of the hard things about investing is overcoming analysis paralysis. It’s easy to feel overwhelmed when there is so much information coming your way. The good news, though, is that you don’t need to fall victim to analysis paralysis.
Instead of worrying about stock picking, which requires you to learn a lot of information, as well as setting you up for problems if you pick the “wrong” stocks, consider indexing. Using index mutual funds and ETFs can help you reduce the amount of information you need to absorb. It’s a good way to get beyond analysis paralysis.
If you really want to avoid analysis paralysis in your investing, consider investing in an all-market fund. These funds offer exposure to all the publicly traded securities on indexes. This can give you broad exposure to the market, and reduce the number of decisions you need to make about your investments. When combined with dollar cost averaging, indexing is a powerful way to start investing and build wealth without becoming overwhelmed.
Eventually, you might want to branch out in your investing, but you can learn what you need to learn while you build wealth with the help of an automatic investment plan that involves an index mutual fund or ETF. You’ll have low fees and, as long as you focus on the long term (and remember that over the course of 25 years the stock market as whole hasn’t yet lost), you can get beyond the feelings of being overwhelmed by analysis paralysis.
Invest for the Long Term
Finally, it’s important to remember to invest for the long term. When you look at short term volatility in the markets, it’s easy to become overwhelmed at the thought of investing. However, in the long term, you are likely to come out ahead, especially if you have a consistent investing strategy that is based on asset allocation and dollar cost averaging. The trend line tends to straighten out over time when you look at investing performance. Consider your investing plan as it applies over a course of two or three decades, and you will find more peace of mind.
How can you save money on youth sports? I’ve always loved saving money and the last few years our two young kids have played basketball, baseball, t-ball, and soccer so I guess it makes sense that I’d have a lot to share on the topic of cutting costs for youth sports.
My suggestions will be most helpful to the parents of kids who play a sport for more than one season. If your child has shown an interest in a sport and you think you’ll be paying for them to play it for the next several seasons or even years these tips can save you a lot of money.
The main cost categories of youth sports are equipment and fees. For some families the travel expenses can mount up but I don’t have experience with saving money on youth sports travel so I won’t address it here.
Youth Sports Equipment
I’ll start off talking about equipment because that is pretty universal; the same sport requires the same equipment where ever you play. The fees will vary across sports, parts of the country, and competitive level of play so we’ll get to those later.
The biggest money-saving tip I can give you about youth sports equipment is to plan ahead.
Buy When it’s Cheap
If you are on the ball you can cut your equipment costs by anywhere from 10 to 60 %. On the other hand if you wait until the last minute you may end up paying top dollar.
Since most sports are seasonal the timing is very predictable which makes it pretty easy to plan ahead. Not only does planning ahead save you money it can also help you budget for the costs in advance. As sports go in and out of season you can usually get the best deals at the end or the beginning of the season.
There are a few things you can do to be sure you take advantage of these seasonal price dips:
Signup for Email Alerts
There are a few events that happen every season in most sports that you want to be notified about.
Season Kickoff Sales
Sign up for the email list of your sports organization. Often before the season starts they’ll send out a discount coupon for a nearby sports retailer for anywhere between 5-20% off.
Many times these types of sales only last for a day or weekend so it’s important to jump on them quickly. Often they’ll require you to bring in a special coupon.
Gear Swap Notices
Even better than discounts are the opportunities to trade for free gear. Many larger sporting organizations schedule a gear swap day at the start of the season. You bring in the equipment that your child has outgrown and swap it for a larger size. For example we bought our daughter a pair of soccer cleats when she first started playing. Ever since then we just keep trading that pair up for a larger size.
Be sure you’re signed up for the email notifications from your sporting organization so you can schedule time to attend these swaps and save tons of money.
Sign up for the email list of a local sports retailer or a big sports store like Dicks Sporting Goods. When the season’s over they’ll likely discount some of their equipment. If you see an email for discounts in your kid’s sport click on them and scan the sales. It’s kind of creepy but with technology these days they’ll know what you’re looking at, learn what you’re most interested in, and will notify you when those types of things are on sale.
End of Year Sales
Another great time to save on sports equipment is during Black Friday and all the sales that happen around the holidays. One thing that can make it kind of tricky buying off-season knows what size to get. The biggest savings during this time of the year typically aren’t on regular equipment but on the high dollar items.
If your child has gotten serious about a sport chances are you’ll need to buy equipment other than what they wear in games. For example you might buy a basketball goal for your driveway, a soccer goal for your backyard, or a baseball rebounder. You can save a lot of money on these big ticket items at this time of the year.
These types of things are a little bit harder to spend money on because your kid isn’t required to have them to play and they’re expensive. You can definitely make an argument for not buying them. But as a sports parent I’ve taken the approach of trying to get my kids the best equipment & training I can for a reasonable amount of money.
If you buy the cheapest stuff it won’t last as long. Like all other purchases, it’s a balance between cost and quality. Sales like these give you a chance to get something that won’t fall apart after just one season at a reasonable price. For example GoalRilla specializes in different types of goals (soccer, basketball, etc) – they’re top-quality but also expensive. During the holiday season I saw their soccer rebounder discounted over $100 in an Amazon lightning deal.
Also if your kid’s team needs equipment this is a good time to buy it. Whether you’re helping coach a team and buying equipment you need or if you’re just pitching in to help cover the coach’s costs buying things like cones, pinnies, whiteboards, etc. during these sales can lower the cost.
Stock Up On Easily Lost Items
In any sport that uses a ball chances are it will get lost or ruined during the course of the season. When you see these types of things on sale buy multiple at once and keep them in your basement or attic. That way when your son or daughter loses a ball you don’t have to go buy another one at full price.
One item that always seems to be disappearing is water bottles. It’s probably because a lot of them look the same, over half the kids on the team have the same Gatorade squeeze bottle . Don’t spend a lot of money on water bottles because your child will probably lose a few of them. We wrap ours in red duct tape so no one will confuse the bottle for theirs & walk away with it. It’s also smart to write your kid’s name & your phone number on their equipment.
One of the reasons that we don’t plan ahead is because we’re busy parents. Shopping online can help make things a little bit easier for you to think ahead.
If you are buying online one of the common strategies you can use is to bundle your purchases to save on shipping. Many places will give you free shipping if you spend over a certain amount of money. Some places, like Dicks Sporting Goods, offer free shipping and free returns on shoes.
Of course the tricky thing about shopping online (and also about buying off-season in general) is knowing what size to get your kid.
Buy Multiple Sizes
One of the strategies we’ve adopted is to buy multiple sizes of the same item when it’s on sale. This not only makes it easier for you to hit the minimum spend to get the free shipping. It also has you covered in terms of having the right size when the season starts.
If something is too small you should return it right away. But for the sizes that are too big often we’ll just hang onto it & have it ready when they outgrow the current size.
Buying multiple sizes can be important during the beginning of season sales I mentioned earlier.
Take my experience with baseball pants as an example. At the start of the season there was a range of youth baseball pants available and most parents just opted for the cheapest brand. I was in the store but didn’t have my son with me so I took a best guess on the size. Turns out I guessed too small and when we came back for a bigger size all the cheapest types of pants were completely sold out.
To add insult to injury, the 20% off pre-season sale had ended so I not only had to buy the $20 more expensive brand but also at full price. So you can probably guess what I did the next year during the baseball pre-season sale. That’s right; I bought 3 different sizes of pants and brought back the 2 that didn’t fit.
Know what You Need
It’s a good idea to ask other parents or coaches for advice on what equipment you really need for that age range. If you don’t ask ahead of time it could be that you buy equipment that you don’t actually need b/c it’s not used or can be shared at that particular age. Or there may be things you hadn’t thought of and if you wait until later to buy them you miss out on early season sales and the option of free shipping bundles.
This doesn’t happen as often if your son or daughter is playing a sport that you know well. But if they’re into a sport you never played yourself there are definitely things you can overlook. For example, last season I didn’t think to get my son batting gloves for baseball during the pre-season sale so I had to pay full price a week later, yuck!
Beware the Markup
I don’t know if it’s the same in every sport but in soccer one item I’ve seen that has high markups are the shoes. You can find a $30 pair of Adidas soccer cleats on sale for a decent price for a 9 year old and they’ll last you all year. But you can also go out and buy a $90 or $100 dollar pair of cleats for the same kid.
In my opinion, those $100 shoes aren’t going to make them play any better. The older they get the more conscious kids seem to be about having the top of the line shoes. You can find pairs of soccer cleats for over $200 dollars for teenagers. I haven’t had to deal with those prices yet because my kids are still young but when the time comes if they want shoes that expensive they’ll be paying for that big markup themselves.
One good way to find used sports shoes for kids is big consignment sales, like Just Between Friends. We’ve found several good pairs of Adidas cleats for cheap at these sales in the past. There are also stores that specialize in reselling used sporting equipment, like Play It Again Sports. In the past I actually looked into buying a franchise because the demand (and potential savings for customers) for used sports goods is so high.
If you have several children in your family that all end up playing the same sport one trick is to buy neutral colored gear. That way when you hand it down the little brother won’t refuse to wear his older sister’s pink cleats. It can also help if you try and sell your equipment in a consignment sale, a gender neutral color means you can interest parents of both boys and girls in your items for sale.
One thing you don’t have a lot of control of when you play sports is the uniform itself. For recreational teams it’s often just a t-shirt with a team sponsor on the front so it doesn’t make much difference.
However once you get into more competitive teams you’re suddenly buying Nike Dri-Fit uniforms or Adidas jerseys for your kid and the club usually dictates where you buy them from. Theoretically they should be able to get a reduced rate because they’re making a bigger purchase, particularly if you’re part of a larger sports organization. But regardless you don’t have any ability to shop around or find discounts on the team uniform.
One thing you do have control over is what size to purchase. When we buy a uniform like this I always try and buy one size up. That way you can get an extra season of use out of it. Another annoying thing for me is that I’ve never had a club negotiate free or reduced shipping from the vendor so you still have to pay to ship the uniform. So if you think you’ll need any extra pairs of socks or a backup jersey order it up front otherwise you’ll have to pay for shipping twice.
That pretty much covers my tips for saving money on sports equipment. The next big cost category for youth sports are the fees.
Youth Sports Fees
The amount of fees you will pay will depend on the level and intensity of games and training your child participates in. If they’re playing in a recreational league the main fee will be the cost of playing in the league. Depending on where you live and how hard it is to get a place to practice you may have to pay some fees to use the practice facilities. From a cost perspective recreational leagues are your cheapest option.
Rec Sports Fees
There are a few things you can do to lower your fees a little. Many organizations give you a slightly discounted rate if you sign up for the league before certain deadline. It may only be a $10 discount but if you’re paying $100 to play in a recreational league that still a savings of 10%.
Many recreational leagues are run in large part by volunteers. In some cases if you volunteer to be a coach or administrator the League or organization might give you a price break on the fees. Some teams and leagues do run fundraisers to help pay for the cost of the team.
Competitive Sports Fees
Where you start running into bigger fees in youth sports is when your kid starts playing at a competitive level. At that point your child probably plays in more games/leagues and plays in tournaments which all have registration fees. If you’re playing through a competitive club then you may be paying coaching fees and other fees to the club.
Comparing Club Fees
If your child is thinking about playing on a competitive team be sure to compare the costs between clubs. They should give you a breakdown of all the costs for a year. Competitive sports often run for 9-11 months out of the year, which means the overall costs will be higher.
The breakdown may vary from club to club but you should still be able to compare line items to get a general cost comparison. The cost categories may vary from sport to sport but this is how we’ve seen them broken out for competitive soccer clubs:
- Coaching fees
- League fees
- Tournament fees
- Uniform fees
- Club fees (for administration)
- Facility fees
In our metro area there’s a pretty big range between clubs in the total cost of playing. So if your child really loves a sport and is really good at it be sure to price all your options before saying no due to cost.
Reducing Club Fees
In many cases the coaching fees will make up the biggest percentage of the costs, maybe half or more. There are some organizations that have competitive teams that are coached by volunteer coaches which can significantly cut down on the costs. As with anything in life you get what you pay for but don’t discount the ability of these volunteer coaches outright.
Many times these teams are coached by a parent whose child is on the team. In some cases that parent may have a lot of experience playing the sport and perhaps even coaching it as well. If your son or daughter is just getting started playing at a competitive level an organization like this could be a good place to start.
Similarly to some rec leagues, if you volunteer for a position like team manager many clubs will give you a discount on the fees.
Extra Training Fees
If your son or daughter is really into a sport and wants to keep getting better their coach may suggest additional training to help improve their skills or their speed and agility – which means more fees.
There are a few ways to lower those fees. There’s a really good speed & agility program in our area that does a great job getting results for youth athletes but it can also be pricey. I’ll use them as an example.
The most expensive option is to get one-on-one training for your child. I don’t know of a way to get a discount on this option other than asking the organization your child plays with if they have a partnership discount with the company that does the training.
If the organization is big enough it might hire some of those coaches to offer training sessions of their own. For example, a local soccer club hires one of these speed & agility coaches to hold a training session every Friday night and it’s much more affordable than a one-on-one session.
The other option is to look into group training sessions. The individual training is unaffordable for many but on two different nights a week they also offer group sessions at a greatly reduced cost. They hold multiple sessions a year and are always looking to fill them up. I know this because I’m on their email list and they’re always sending out emails right until the day it begins to try and get enough kids to fill up the group. So if you want to sign up for multiple sessions at once you can probably negotiate a discount.
We’ve sent our kids to a few different sports camps. These are usually held off-season, to give kids a chance to keep their skills fresh, frequently this is over the summer. I was in charge of finding a good camp to recommend for my son’s soccer team this summer.
My research turned up a ton of options and they’re not easy to compare because of the variety of camps. The camp duration, training frequency, quality of coaches, facilities, & training approach all made it tough to come up with a simple comparison.
The best way I found to narrow them down was to ask around and get feedback from people that had attended them in the past. The best way to get a discount is to register early, many camps charge more if you register closer to the camp date.
Another good option for getting a good camp for less money is to attend a camp that’s affiliated with a competitive club. These camps aren’t usually setup as money makers for the teams.
Many of these clubs will run camps to give their current players a chance to play in the off season and they also use them to recruit kids for future seasons. Since the main goals of these club camps are training of their players and recruiting they often offer them for pretty reasonable rates. For example, kids may get 3 hours of training a week for a month for around $100.
The combination of sports and technology has really exploded over the last several years. Technology in the form of websites and phone apps has made some things easier and faster and also created new opportunities for youth athletes and coaches.
Earlier I mentioned that some teams offer a discount if you volunteer to be a team manager. There are a few free online tools you can use to manage your sports team.
For managing a team roster, publishing and sharing game & practice schedules, and sending team notifications you can use Shutterfly Team sites or TeamSnap.
Shutterfly Team Site
We started off using Shutterfly, it offers the benefit of not only team management but also allows all the parents to share photos of their kids.
We’ve used Shutterfly for one of my son’s teams for a few years and one neat thing is going back through the pictures from past seasons and seeing how they’ve grown & progressed over the years. I setup one of these sites and had to administer it and although it was free a few of the features were tricky to figure out. It’s free so you get what you pay for.
One of my son’s new teams is using TeamSnap and so far it seems to be pretty slick online team management software. The benefit of TeamSnap is that it’s built from the ground up to manage teams so it’s pretty straightforward and has tons of features. It has a free option but also offers other plans that offer more functionality but charge a monthly fee.
One of the biggest challenges when managing a team is keeping track of who has paid all the necessary team dues. This is relatively simple for recreational teams where the main fee is league registration. However for competitive teams using a free online spreadsheet like Google Docs is really helpful to keep track of which players have paid their fees for league registration, tournaments, etc. An online spreadsheet is nice because you can share it with coaches and team parents.
Team Training Tools
Some of the coolest uses of technology in youth sports I’ve seen are ways to motivate kids to keep improving their skills. I’ve been using one of these tools called iSoccer with my son. It’s both an app and a website that helps players measure their skills and keep track of their improvements. The company that makes the software is expanding into other sports as well so keep an eye out for it.
Like many apps these days, you can get a free iSoccer account for a single player. The free version doesn’t come with full functionality, for a monthly fee you can access all the features. I tried out the free trial and decided it was definitely worth the money, both for my son and for his whole team. I did find two ways to save money on the tool. If you sign up for a full year, rather than a month or a quarter at a time you get a pretty significant discount. You can also use an iSoccer promo code to save an additional percentage.
Many online subscription based tools offer similar types of discounts through referrals. Coaches or players that currently use the tool are given a special referral code that when shared with others will get them a discount. So when you’re signing up for an online tool be sure to look for a referral or promotion code.
Set a Sports Budget
If you’re a sports parent it’s important to set an annual budget for what you’re willing/able to spend. Just like any other type of spending it’s easy to nickel and dime yourself when it comes to youth sports costs. There’s always another tournament they could play in, another piece of gear or you could buy, or more training you could sign them up for. Constrain your cost by setting a cap on your spending.
This is particularly important when you have multiple kids and they all play one or more sports. I know several families who were really surprised when they started keeping track and added up how much they spent on youth sports in the last year.
Are Youth Sports Worth the Investment?
Every season we spend more time and money on soccer, basketball, and baseball and I find myself asking whether it’s a good idea to be putting so much emphasis into youth sports? After my wife and I mull it over we keep coming back to the same reasons why we feel like their teams are worth the time and money we put into them:
– The most obvious is that it gives them great exercise. I could never get our kids to go into the back yard and sprint back and forth over and over but you put a ball at their feet and they’ll run much faster and much longer than they ever would in gym class.
– Team sports do teach lessons about working hard, interacting with the others (whether they like them or not), setting goals, making & keeping commitments of practices/games, and overcoming disappointment when they don’t play their best or lose a game. At the end of one season I wrote about 15 youth sports lessons kids can use in their career someday. Working hard and getting good at a sport has also helped our kids build up their confidence and self-esteem.
– If your child plays a sport that you know and enjoy it can give the two of you a common interest and something to build a relationship around as they get older and turn into grouchy teenagers who never want to speak to you : )
– The most important reason we continue supporting youth sports is that they have fun practicing and playing sports with their friends. I ended up playing team sports through high school and college and some of the people that I met in those years are still some of my closest friends.
One trap I know some parents fall into is thinking of the money they put into youth sports as an investment towards getting college scholarships or even a professional career. It may be that your kid develops into an amazing player who someday will benefit from college tuition breaks or professional contracts but the odds are against it. As a youth sports parent it’s better off if you view the money you spend as an investment in some combination of the bullet points I mentioned right above. If college and pro sports end up following then that’s a bonus.
Youth Sports Success
The organization that you play with, the team you belong to, and your child’s coach will make a big difference as to whether it’s a positive experience for them or not. So it’s worth the time to investigate all of these before getting your kid involved. If you are going to invest the time and money into the sport you want to make sure they have a good experience and get something positive out of it.
Every kid responds differently to various types of motivation and teaching. Try to find a coach who’s approach matches the style that is best suited for your child. It also helps if you can find a coach that is open to parent input. Obviously the coach has to make the ultimate decisions but if you’re spending time and money on the sport it would be nice to have a coach who takes parent input and feedback into account.
The Right Team
On a recreational team you can often sign up your son or daughter on the same team with many of their friends. It’s more challenging on a competitive team because players have to try-out and earn a spot on those teams. What many teams will do is play in a recreational league in their earlier years and then when the kids get older and more skilled they all try out for the same competitive team.
Whichever team you choose you want to try and set your kid up for success. It’s not a lot of fun for your child if they play on a team that’s so good that they never get to play in a game. It’s also no fun to play on a team that loses all of their games.
Choosing a Club
Finding the right team and league means looking for a place where your son or daughter will be challenged but not overwhelmed. One way you can help with this is by choosing a club or organization that focuses heavily on player development.
These types of clubs typically will have multiple teams at the same age level and they organize them by skill level. The emphasis isn’t on winning but rather on developing each player. As a kid progresses in their skills they can move up to higher skill level teams. This approach is preferred because your child gets to play against other kids at their own level, which builds their confidence and helps them develop faster. So, in addition to the cost comparisons I mentioned earlier this is something else to consider when choosing which organization to play with.
Basically it comes down to setting your child kid up for success. As I mentioned, if you’re going to spend the time and money on the sport you’d like it to be a good experience for your kid. If they’re going to put in the work at practice and in games it would be nice to see them rewarded for their hard work and finding the right environment will go a long way towards making that happen.
It turns out that this article ended up being a lot longer than I originally intended. It actually started out as a list of tips I put together for a phone interview I did about ways to save money on youth sports. I couldn’t find the list when I got on the phone so I figured I should publish all the things I didn’t share. The more I added to the list, the more tips I remembered. If you have tips of your own that I didn’t cover, please add them in the comments below.
As I mentioned, I didn’t talk at all about the costs of travel because we haven’t had to deal with that. If you have tips or suggestions on how to reduce the costs of traveling for kids sports definitely share them in the comments below and I’ll add them as well.
Lastly if you have questions about what you’ve read please ask it in the comments and we’ll get it answered if we can.
If you had to pick between an easy option and a hard one, which would you be more likely to choose? The easy path isn’t always the wisest one. However, the fact that it’s easier can sometimes explain why we get ourselves into a mess in life.
People my age place an emphasis on convenience. If there’s a fast & easy approach that’s the one we prefer. Taking the easy route isn’t necessarily bad but sometimes it means you’re giving up something in return for speed or convenience.
Because we love fast and easy so much, it’s good to remember that there are times when the easy approach has side effects or consequences. In fact, sometimes the problems we get ourselves into exist because the alternatives to them are difficult.
For example, take getting out of debt and saving money.
No one likes being in debt but the things required to dig out of debt can be tough. No one like being broke but saving money can be difficult and spending it seems to get easier every day.
That’s why we put together a series of articles on why some things are easy because the alternatives are hard. We look at spending money, borrowing money, advancing your career, and saving for retirement.
- Spending Money is Easy Because Saving Money is Hard
- Being in Debt is Easy Because Getting Out of Debt is Hard
- Coasting at Work is Easy Because Working For a Promotion is Hard
- Keeping Up With the Joneses is Easy Because Being Different is Hard
- It’s Easy to Fall Behind on Retirement Because It’s Hard to Choose a Plan
As unpleasant as it may be sometimes we have to make hard decisions. Delaying those decisions and sticking with the easy route may work for today and next week but chances are it won’t work forever.
Don’t feel badly about wanting to go with the easier choice, I think most of us do. Just be aware of any long term effects and consider your alternatives.
If you don’t want to take my word for it then take a lesson from the world famous motivational speaker, Matt Foley. He always chose the easy path and ended up living in a van down by the river….
What often causes people to not invest money is the perception that you need a lot of money just to get started. That’s actually not true. Even if you don’t have much money, there are still places that you can invest with very little.
This is important because the first obstacle to investing at all is just getting started. If you go through your entire life thinking that you can’t invest because you don’t have a lot of money, then you will never start.
Here are ways that you can begin investing, even with very little money.
An Employer Sponsored Retirement Plan
If you are covered by an employer-sponsored retirement plan, this is the first place you should begin investing. One of the advantages to these plans is that they don’t require any minimum upfront investment. You can simply start by making payroll deductions, having the money transferred over to the retirement plan.
And since the money is taken directly out of your pay, you’ll never see the transfer occur, and you can set it up so that you barely notice the missing money from your pay. For example, you can begin funding an employer-sponsored 401(k) plan with a contribution of just 1% of your pay. You probably won’t even notice that!
In subsequent years, you can begin increasing the contribution each year. For example, at the beginning of your second year of participation, you can increase your contribution to 2% of your pay. At the beginning of the third year, you can increase it to 3%. If you time increases in your contributions with annual pay raises, you won’t even feel the effects of higher contributions. This is also made easier by the fact that the contributions themselves are tax-deductible so in effect the federal and state governments will be subsidizing your contributions.
If your employer offers a company match on your contributions, you should make it a goal to get your contributions to the point where that match is maximized. For example, if your company does a 50% match up to 6% of your pay (meaning they add 3% to your account), you should get to a 6% contribution rate as soon as you are able.
Under this scenario, even if you don’t invest any of the money, you would still be getting a 50% return on your contributions. That’s just too much money to pass up!
Traditional or Roth IRA
If your employer does not provide a retirement plan for you to participate in, you can start your own using either a traditional or Roth IRA. TD Ameritrade will allow you to open an IRA, and they have no up front account minimums. You can simply fund the account at whatever level you feel comfortable.
You can set up a payroll contribution through your employer as well. Most employers will allow you to allocate direct deposits into three or more accounts. You can simply start moving a small percentage of your pay to the IRA account, and that way you will gradually and automatically build up your account over time.
Once again, these contributions are tax-deductible (for a traditional IRA, not the Roth), so you won’t feel the full effect of your contribution. And you can contribute up to $5,500 per year ($6,500 if you’re 50 or older) to either a traditional or Roth IRA.
TD Ameritrade Brokerage Account
TD Ameritrade will also allow you to open up a non-retirement brokerage account with no upfront minimum, called the TD Ameritrade Standard Account. You can also fund such an account using payroll deductions, or you can simply use the account as a place to put windfalls as become available (tax refunds, bonuses, gifts, etc.).
You don’t have to begin trading in the account until you have enough money to begin investing, and you feel comfortable doing so.
These are small denomination US Treasury securities that you can purchase through Treasury Direct. You can purchase them in denominations of as little as $25.
These are actually US government bonds with terms running between one year to as long as 30 years. And not only do they provide annual interest income, but they also make semi annual adjustments for inflation. Interest and inflation adjustments are added to the face amount of the bond and payable when you redeem the bonds.
Bonus: I Bonds are tax-exempt for state income tax purposes.
Betterment is what is often referred to as a robo advisor, and that can be the perfect investment account if you’re completely new to investing. When you sign up for a Betterment account, they have you complete the short questionnaire which determines your risk tolerance. From that risk tolerance they will establish a portfolio of exchange traded funds (ETFs) that will represent the allocation of your portfolio going forward.
This will enable you to take advantage of professional investment management but without the high upfront investment, or the high annual fees that normally come with it.
Betterment has no upfront minimum investment requirement. You can sign-up for an account, and commit to contributing a minimum of $100 per month – which you can do through payroll deductions. So you can simply begin funding your account, and never have to worry about getting involved in the technicalities of investing.
A Bank Savings Account
Failing all else, you can simply open up a bank savings account, and fund it through direct payroll deposits. Technically speaking, this is not an investment. However, it is an account that you can use to begin accumulating money until you have enough that you can move it into either mutual funds, ETFs, or an investment brokerage account that have upfront minimum account balances of say, $1,000 or more.
When it comes to investing, the single most important step is to get started. The fact that you don’t have much money should never be an obstacle. If you can carve a few dollars extra out of your budget each month, then you will have all that you need to start investing. But you have to take that first step.