Small Cash Windfalls Can Build Real Wealth Over Time
Small cash windfalls are small unexpected sums of money left over from purchases. This could be left over change from your trip to the grocery store to money left in the budget after returning home a day early from a family vacation. Individually these sums of money are small but over the course of a year or more, can add up to thousands of dollars in savings.
There are apps like ACORNS, that let you round up your purchases and automatically invest the savings for you. What I like about ACORNS is that the the fees are low, just $1 a month until you have $500o in your account and no commissions on purchases or account maintenance fees. And if you need access to your investment, you can request the money be put back into your checking account the next day all with no withdrawal fee.
Bank of America Keep the Change Program rounds up your purchases and moves it to a savings account. This might be ok for an emergency fund but won't help build wealth.
The average pay raise for U.S. employees expected to be near 3% this coming year and a raise could be thought of as a windfall of sorts. Since these monthly increases in income tend to be small, it is easy to fall into the bad habit of spending them and ending up with nothing to show.
Instead of succumbing to lifestyle creep and spending new sources of income, why not take at least half of your raise and increase contributions to your emergency fund or retirement savings? If you are already contributing a percentage of each paycheck to a retirement account, any future raise will automatically increase your contribution dollars.
You're probably not going to become a millionaire, but you can build wealth by being disciplined and consistently investing small cash windfalls. Give it a try!