Some might raise an eyebrow at the idea of starting an investment journey with just £50 a month. But that’s all it takes to start building wealth through a low budget investing strategy. Let's explore how you can make your modest monthly contribution work effectively towards your financial goals.
The power of micro-investing
The investment landscape has dramatically changed in recent years. Micro-investing has removed barriers that once kept average earners from building wealth through investments. It allows you to invest small amounts regularly, making the investment world accessible regardless of your financial situation.
Apps like Moneybox let users round up everyday purchases and invest the difference, while platforms such as Plum have automatic savings features so you can save money each month without having to think about it. These services usually offer straightforward portfolio options based on risk tolerance rather than expecting you to understand complex financial concepts, which is perfect for beginners taking their first steps.
Getting started with £50 per month
Before diving into investments, it's worth considering what you're actually saving for. Your goals, whether it’s buying a house or saving for retirement, naturally shape how and when to invest. And don’t forget to establish an emergency fund covering 3-6 months of expenses before venturing into investments to cover unexpected costs.
Some practical steps to begin include:
- Selecting platforms with low or no fees
- Dividing investments between different types of fundsSetting up automatic investments shortly after payday
- Adopting a long-term perspective instead of checking performance daily
Beginner investment options
A reliable tactic for low budget investing is to start with simple index funds tracking the FTSE 100 through a Stocks and Shares ISA. The tax benefits make every pound work harder, without requiring in-depth knowledge of individual companies.
Or, if you prefer a hands-off approach, robo-advisors like Wealthify handle portfolio rebalancing automatically.
The long-term perspective
The true power of a £50 per month investing strategy becomes clear when you look at compound interest over decades. Consistent monthly investments of this amount could grow to approximately £60,000 over 30 years with average returns - more than three times the amount contributed.
Market fluctuations are a fact of life, though, and you shouldn’t let them derail you. During the 2020 crash, many small portfolios lost value temporarily, but those who continued regular contributions during the dip often saw excellent performance as the market recovered.
Start small, think big
The first £50 investment might not seem like it’s going to make a difference, but it’s not about immediate rewards - think of it as starting a sustainable financial habit. You can gradually increase your monthly contributions as your income grows, while those early investments continue generating returns.
The most important step is simply to start. Investing is easier than ever today, with accessible platforms and compound interest to help your money grow. Your future self will thank you for it. And if you need help or advice, our advisers are here to help.
