There is a lot of spending power behind the humble $5 bill. You can use it to buy a foot-long sandwich at Subway, a fidget spinner, a cheap bottle of wine, the list is endless for good old Abe Lincoln.
However, as much as $5 can buy you at your local Walgreens, most people don’t associate $5 as an amount of money that has the potential to improve their finances by much.
That would be a mistake, though, which is why we’ve pulled together our five favorite tips for making the most of $5. Trust us, you’ll never look at a $5 bill the same way again.
1. Take $5 and invest it in the stock market
Most people associate investing in the stock market as only something rich people can do, but with Stash you can start investing in the market and watching your money grow with just $5. Stash allows you to buy a fraction of a stock or an ETF instead of having to invest in a whole share.
Starting with $5, you can work with Stash to build an investment portfolio that reflects your interests, beliefs, and goals. Think $5 won’t get you anywhere? By investing just $5 a week, and assuming your portfolio grows by an average of 5% per year (a pretty modest growth rate), your portfolio will be worth a staggering $17,274 in 30 years.
2. Set $5 savings goals that will add up big time
Let’s be honest, building up savings can be tough. One hack that has worked for people time and time again, though, is setting a small goal that they can work towards incrementally.
Thanks to the savings app Digit, doing just that might be easier than you think. Set a savings goal via Digit and the app will work behind the scenes pulling out money incrementally from your checking account so you can reach your goal. In other words, you won’t even miss the money.
Set a starting goal of putting aside $5 a day for the next year. Before you know it, you’ll have a nest egg of $1,825. Digit even throws in a 1% savings bonus for every three-months of savings, so you might even reach your goal ahead of schedule.
3. Put $5 To Good Use By Protecting Your Stuff
While you may love your Apple AirPods, so do would-be thieves, who would just love to swipe the $150 gadget from you at the gym, or out of your bag. We might be being cynical here, but you know it’s true.
Thankfully, by paying for renters insurance with Lemonade that starts at just $5 per month, you no longer have to stress about that. Lemonade allows you to invest in the things that you love from those Apple AirPods to a favorite pair of sneakers to a vintage guitar, and if they get stolen or damaged in your home, they’ll be covered. The best part? Lemonade covers your stuff outside of your home, too.
4. Earn Cash Every Time You Spend $5
Getting paid to do the shopping you already do sounds too good to be true, but with the Drop app, this dream really can become a reality. All you have to do is link your credit cards or debit cards to the app and you will automatically earn points for the purchases you make most often.
And what purchase do you make more often than your daily coffee? Thanks to Drop, you can feel a heck of a lot less guilty about your daily purchase of a $5 Mocha Frappucino from Starbucks, because every point you earn back from Drop can be redeemed for cash via PayPal or online gift cards. And the more you spend, the more points you are able to earn. While we don’t condone spending for the sake of spending, you might as well take advantage of this!
5. Cut Out Every Wasteful $5 Purchase You’re Making
Now that you are fully versed in how much of a financial impact $5 can have on you, it’s time to take a step back and make sure you aren’t wasting small amounts of money that you could be investing in the stock market, or socking away in a rainy day fund.
Remember that $5 monthly subscription to Reader’s Digest you ordered years ago? No, we didn’t think so. What about that $5 fee you are paying for access to a streaming service, or a digital site that you never read? If you’re like most people and have a busy life complete with a hectic work schedule, it can be difficult to remember to cancel subscriptions that you don’t care about anymore.
Enter Truebill, which will automatically pull together every subscription you are paying for by analyzing your bank account and credit cards, and then easily cancel old subscriptions you no longer want.
Feature Image: Twenty20