Put Your Money to Work: Five Smart Ways to Use $20

Picture of a $20 Bill

Personal finance can be frustrating when you don’t have much money to work with.

If that’s you, then you should get to work on mastering the basics, especially earning more.

In the meantime, it’s good to know how to manage what little you have. If you can’t manage a little, what makes you think you can manage a lot?

To illustrate the point, let’s start really small. Here are five good uses of a mere $20:

Invest in the Stock Market

Let’s get this out of the way: You won’t get rich by investing $20. You won’t even get close.

But depending on how long you leave it invested, you’ll multiply your money many times over. Especially if you have a solid, simple investing strategy.

Let’s say you open a Roth IRA with Fidelity and invest in FZROX, the total stock market index fund with a 0% expense ratio. We’ll assume that the market returns 7% per year. Here’s what the growth of $20 might look like:

$20 invested at 7% for 40 years
  • At around 11 years your money would double.
  • At 24 years your portfolio balance would cross $100.
  • At 34 years you would have $200.
  • By year 40 you can just about hit $300.

Is this life-changing money? No. But The journey to accumulate a portfolio that would let you walk away from work has to start somewhere.

Buy a Book

Buying a book is another form of investing: Investing in yourself.

Most people stop learning and growing and start stagnating after they leave school. One of the best ways ro become a lifelong learner is to develop a love for books.

From a purely financial perspective, books are about as big of a bargain imaginable.

Chances are it took the author months or years to write the book. It might have taken decades for them to acquire the experience necessary to write it. But you can read it in maybe 10-20 hours.

Decades of insights for the investment of $20 and 20 hours. If that’s not a screaming bargain I don’t know what is.

Even though I’m primarily thinking about non-fiction, fiction is incredibly valuable as well. Humans learn through stories, and all the material you need to become a more mature, integrated self can be found on the pages of high-quality fiction books.

Not all books are worth your time, but in a world where most people consume information from a feed of 280-character snippets, a good book is a great investment.

Find some good books to read in our book reviews

Give it Away

This one might seem counter-intuitive. Wouldn’t giving it away be the best way to waste this financial resource?

Not at all.

In fact, giving money away is arguably one of the best uses of your capital.

When you find someone who really needs the money, giving both brings joy and does real good in the world. The greater the need, the sweeter the gift.

Buy a Frisbee (Seriously)

Two problems in modern society:

  • Few people make a habit of deriving joy from movement
  • There’s not enough “IRL” (In Real Life) face-to face connection now that everything is digital

Buying a frisbee can help with both of these problems. If you have a friend who lives nearby, instead of connecting over Zoom, invite them over to the park to play catch.

Frisbees are the perfect object for play. Consider some of the benefits:

  • You don’t need any special equipment (like gloves)
  • There are a number of ways to throw it: backhand, forehand, hammer (and many more)
  • Throws like the forehand are difficult and provide an opportunity to learn a skill that few people master
  • Frisbee throws can curve in the air depending on how you throw them, giving you room to experiment
  • Frisbee’s can easily be caught one or two-handed with practice.
  • Because a frisbee will slow down long before it hits the ground, you have the opportunity to chase down and catch overthrows.

Plus, they are cheap.

In my experience, the best frisbee (by far) is the Discraft Ultra-Star 175g flying sport disc, and it’s routinely under $15 on Amazon.

If I were ever able to calculate the amount of fun that I had per dollar spent on an object, I would say that a good frisbee blows everything else out of the water.

Save it For a Rainy Day

I know it’s a cliche, but it’s a cliche for a reason.

Just because you don’t have a pressing need for the money now doesn’t mean you never will. One of the main reasons why its good to have money is to provide a margin of safety.

$20 alone won’t be much to protect you when things go south, but as covered in the investing section, you have to start somewhere.

Final Thoughts

This list isn’t comprehensive. It’s just meant to provide a few worthwhile options that you can explore. What you should actually do with your money is ultimately up to you and will depend in large part on your circumstances.

  • If you’ve never invested in the stock market, this might be a great time to start
  • How many books have you read in the past year? If the answer is zero, you might want to change that
  • Looking to combat your selfishness? Try giving it away
  • Do you get enough outdoor time? If not, grab a frisbee and a friend
  • If in doubt, just stash it away for a rainy day

The important thing to remember is that if you can become intentional with how you manage small amounts of money, you’ll be intentional with how you manage large amounts of money. Whatever you do with your $20, don’t do it mindlessly.

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