With rising inflation pushing up the cost of everything from petrol to food, setting aside money for the future can be one of the first things to fall by the wayside.
But being mindful about your spending doesn’t mean you can’t start investing. You can begin with smaller amounts and give your money the chance to grow over the long term.
While investing has its risks, it gives your money a better chance of keeping up with inflation, rather than sitting still and losing value over time.
Here, we take you through how to start building investments for your future without spending a fortune.
Please note that this article is for information purposes only and doesn’t constitute advice. Please refer to the particular terms and conditions of an investment platform before committing to any financial products.
Get a safety net in place
Investing can help your money grow, but it’s important to get your finances in shape before you start.
First, build up some emergency savings in an easy-access account. If you invest money that you might need at short notice, you could be forced to withdraw it when an unexpected expense comes up, for example if you need to replace a lost or stolen phone or suddenly lose your source of income.
If your investments have fallen in value when you need the money, withdrawing it could turn a temporary fall into a permanent loss.
Aim to save between three and six months’ worth of living expenses for this purpose. To get the most from this money, look for an easy-access savings account that pays a high interest rate.
- Find out more: best savings accounts 2026
What to invest in
Buying individual shares can be expensive. A single share in Apple, for example, currently costs $332 (around £236).
Investing in just a single share is also a very risky approach, so ideally you’d invest in many. With even single shares potentially costing hundreds of pounds, the cost can quickly become too high.
One option is to invest in funds. Funds pool money from many investors and spread it across different investments. Some funds are accessible from a lump sum of £100 or monthly investments of £25.
Unlike with shares, you’ll pay an ongoing charge for the management of the fund. These charges can vary significantly, but anything over 1% will likely be poor value. ETFs (exchange-traded funds) often have lower fees – closer to 0.1%.
A few platforms will allow you to buy a fractional share, which, as it sounds, is a fraction of that share. However, this gives you fewer rights and protections than if you were to buy a whole share or invest in a fund.
If you’re a beginner and working on a budget, you should avoid high-risk investments like crypto, which are more likely to result in a loss.
- Find out more: should you invest in funds?
How to invest
To start investing, you’ll need to set up an account with an investment platform. A stocks and shares Isa is a type of account that you can invest up to £20,000 in each year, and the returns will be tax-free.
There are lots of platforms to choose from, and not all will suit you if you’re just getting started on a budget.
Investing comes with costs: platforms usually charge fees to have an account or every time you buy a new investment. These vary drastically from one platform to another.
If you’re planning to set aside some money for your investments every month, you might be able to make use of free regular investing. This can remove the transaction costs you pay whenever you make an investment, which can be as much as £9.50.
You can set the investments you’d like to make each month and the amount you’ll be paying. There is usually a minimum of £25 or £50 for these monthly payments, so check before signing up.
- Find out more: best stocks and shares Isas
Five tips for new investors
- Leave your investment for at least five years When you invest, think about the long term. Leaving your investments for at least five years gives them enough time to ride out any dips in the markets.
- Invest broadly This doesn’t have to mean lots of complicated research. Avoid investing everything in one share, or multiple shares all in the same industry or country. You can look for ‘global’ funds to avoid this, or invest in multiple funds across different sectors and regions.
- Stay calm. The value of investments rises and falls, so it’s inevitable you’ll face a drop. It’s important not to panic at the first sign of a drop, or you might sell at a loss over a temporary setback.
- Check back in (but not too often) Looking at your investments occasionally will give you the opportunity to cut any that are consistently underperforming. It’s easy to check them frequently, but this will likely do more harm than good and lead to you doing too many trades.
- Don’t overpay on fees Avoid overpriced funds and stocks and shares Isas that charge a high account or transaction fee. You can use our guide to compare investment platform fees and charges to find what would be best for you.