How to Invest $100 A Month and Why It Can Be Life-Changing 

This could be the year when you pay off a credit card, start saving (for real), or planning for your financial future while still enjoying the lifestyle your living today. You don’t need to have a big stash of cash to take the first step: With just $100 a month you can begin building wealth and see your way clear to getting ahead instead of staying stuck in the same old lane of money mismanagement.

Financial advisors share their suggestions for some of the best ways to invest an extra $100 per month.

1. Save $100 every month in a Roth IRA

According to Jeff Rose of Good Financial Cents, a Roth IRA requires you to invest money that’s already been taxed, but your contributions can grow tax-free and compound until you reach the age of retirement. At 59 1/2 years of age, you can withdraw funds from your Roth IRA without paying income taxes. Ka-ching!

2. Save for unexpected and future healthcare expenses in an HSA

Financial planner Taylor Schulte, host of the Stay Wealthy Retirement Podcast, says that individuals can invest in a Health Savings Account (HSA) up to certain limits on a tax-advantaged basis each year, then your money grows tax-free. If you take a distribution to pay for qualified healthcare expenses, you won’t pay taxes then, either. Among the requirements: having a high deductible health plan.

3. Pay off high interest credit cards

The financial return on debt repayment can work similarly to making an investment. When you pay off a high interest credit card, you’re no longer being charged an outrageous interest rate, which means you’ll have more money in your pocket monthly (and annually) that you can put into savings or use as an investment for the future.

4. Establish an emergency fund

Jake Northrup of Experience Your Wealth says that an emergency fund should include at least three months of living expenses (but the more, the better). If you keep your funds in a high-yield savings account, you won’t see a significant return on your investment but you’ll be able to tap into the finances quickly and easily should a surprise medical bill crop up.

5. Increase your 401(k) contributions

Money in a 401(K) plan can grow tax-free and compound over time. Another plus: You won’t have to pay taxes on distributions until you reach retirement age. And yet another bonus: Your workplace might offer an employer match, which is, for all intents and purposes, “free money.” Who says there’s no such thing as a free lunch?