If you’re on a limited budget – as some of us are – investing with a small budget means making the most of the opportunities presented. Whether it’s just saving a few euros or using your bank to automate your savings, there are ways.
Whether you only have €50 or €500 to invest each month, there are still plenty of opportunities to create wealth and build a savings plan.
How to invest if you have little money
Investing with a small budget means you have to be calculated and know exactly where your money is going. It’s a different mindset from “saving” – moving towards accumulating assets that add more value in the future.
Think of it like this: Regular people use banks that offer only around a 3% interest rate on their savings. If you have a small or large budget, a 3% increase is barely enough to beat inflation, as the median inflation rate in the EU is 2.8%, while in the Netherlands it ranges at 2.7% as of 2025.
When working with a smaller sum, being efficient every year or every month is better than doing nothing. While savings and a bank deposit are safe, you’re losing purchasing power. As a result, your strategy should focus on compounding over longer periods, automating the investment process, and using low-fee platforms.
What does a small budget mean?
A small budget, when we’re talking about investing, means different things to different people. Generally, a small budget is whatever you have left after paying for your living expenses, entertainment, and other essentials. It often ranges from €50 to €200 per month. However, this amount isn’t small when put into context.
Let’s look at what can happen if you invest a small amount of money. If you add €50 over 30 years and invest it, it’s almost the same as investing €500 over 15–20 years. The difference here isn’t the amount but rather the habit.
A small investment budget means whatever you can afford to invest, just to get started. If €20 is all that’s possible, so be it.
Why start investing with a small budget?
Investing with a smaller budget means you’re starting early and taking action, rather than waiting and missing out on what’s really important: compounding interest. Here’s why starting early with a small budget is important:
For one, starting early means taking advantage of compounding to grow your investment. Compounding occurs when your investment returns generate additional returns, and the longer your money stays invested, the greater the effect. A small investment in your 20s has a bigger impact than a larger investment in your 40s.
Another reason is that inflation erodes the value of your cash. If inflation is 3% and that’s how much you get from your bank, then that’s just breaking even. But with higher-yield investments, you can beat inflation over the long term by 3–4%.
Finally, starting with small amounts allows you to learn how the market works without the risk of catastrophic losses. It helps you understand your risk tolerance and how you react when the market dips 5% or 10%, before you have significant capital on the line.
Types of available investments to start with little money
Exchange-Traded Funds (ETFs)
ETFs are pools of securities that trade on an exchange. Their upside is that you don’t have to follow 50 different stocks individually. Instead, one ETF gives you exposure to multiple assets in a single go. One example is the S&P 500, which tracks the top 500 companies in the US.
Fractional shares
Historically, if a company’s stock price was €3,000, you needed €3,000 to buy in. Fractional shares let investors grab a share of the company even with a small budget. Anyone can invest, even with a €20 or €50 budget, ensuring every euro in your budget is working for you.
Micro-investing apps
These applications link to your bank account and round up your daily purchases to the nearest euro, investing the difference. Many neo-banks now offer this feature, which rounds up a sum and saves a percentage, adding it to your savings account. It’s a painless way to accumulate capital without drastically changing your lifestyle.
What should you invest in with little money
When you have limited money, the safer approach is to focus on balancing risk and making the right choices. While there is no one-size-fits-all formula, as everyone has their own views, there are some ways to approach it.
With limited capital, investors should focus on a single stock that has historically provided consistent returns. It’s important to do your own research before investing. Statistically, investors should look to a longer time frame rather than short-term goals, as small budgets perform better over the long term.
Investments should focus on a single asset, such as stocks or crypto, without overdiversifying. Having broader exposure can mean fewer opportunities for compounding interest. Options include stocks, bonds, or even crypto in some cases.
How to approach it to be safe
Investing always carries risks, but smart habits can make it safer for everyone.
Emergency fund first: Before investing a single euro, make sure you don’t pour all your money into investments. It’s important to have a buffer in a savings account to prevent acting emotionally during uncertainty.
Dollar-cost averaging (DCA): Instead of trying to time the market, DCA means investing a fixed amount regularly. Whether it’s €10 or €100, automating the process lowers the average cost per share over time and removes emotional decision-making.
Avoid high fees: High expense ratios and trading commissions are the enemies of small budgets. Look for ETFs, stocks, or platforms with lower expense ratios or fees.
Build your future today
Simply starting—without overthinking your budget—means you’ve overcome the hardest part of investing. While the misconception remains that you need a large budget to invest, new tools and strategies make it possible for anyone to build a portfolio without big commitments.
If your budget allows or you want to diversify your current investments, Yieldfund, a quantitative trading company, offers investment plans with up to 48% yearly returns and weekly payments. Explore what’s possible when starting or diversifying your existing portfolio.
FAQ
What apps allow round-up purchases and invest spare change?
In the Netherlands, apps like Revolut, Bunq, and other neo-banks let you round up expenses and invest automatically.
What are the safest investments for small capital?
Government bonds offer lower risk compared to other investments. Stocks and ETFs are more volatile, while cryptocurrencies have a higher risk profile.
Best ETFs to buy with small investment budgets?
ETFs with accumulation, like Vanguard FTSE or iShares Core, are ideal for small investments when selecting ETFs for small budgets.to last-minute travelers.
