Invest Your Stimulus Check: Why Young Americans Are Growing Their Money

If you haven't spent your stimulus yet, investing it could really pay off.

Once the American Rescue Plan was signed into law in March, millions of Americans were thrilled to see $1,400 stimulus checks hit their bank accounts. Some people had no choice but to use that money to cover essentials like rent and food. But for those who didn't urgently need the extra money, there was a world of opportunity to grow that cash into a larger sum.

In fact, among stimulus recipients ages 18 to 34, 49% invested at least some of their money, according to a new CNBC/Momentive Invest in You survey.

Among that 49%, here's how their investments broke down:

• 15% bought stocks
• 11% put money into cryptocurrency
• 9% invested in mutual funds
• 8% bought exchange-traded funds (ETFs)

If you have money left over from your stimulus check and you don't need it to pad your emergency fund, pay off credit card debt, or cover everyday bills, then it pays to look at investing your cash, too. Here's how to get started.

1. Decide how you'd like to invest

Some people can't wait to jump on the cryptocurrency bandwagon. But if you're more risk averse, you may want to start off by investing in stocks, mutual funds, or ETFs, all of which tend to be less volatile than digital currencies.

Now to be clear, there's no such thing as a risk-free investment. Anytime you put money into an asset that can grow in value over time, you run the risk of losing money. But when it comes to investing, there's a hierarchy of risk.

Bonds, for example, tend to be less risky than stocks, but they also tend to deliver lower returns. Meanwhile, you may be able to make more money quickly with cryptocurrency than with stocks, but your losses could also be more severe. Think about your risk tolerance and how you want to invest before diving in.

2. Find the right brokerage account

Some brokerage accounts let you buy stocks, mutual funds, and ETFs. Others let you buy those assets, plus cryptocurrency. Once you decide how you want to invest, you should have an easier time narrowing down your options.

That said, there are specific features to look for in a brokerage account. For one thing, you may want to favor an account that doesn't impose a minimum balance requirement. That way, you won't feel pressured to keep a specific amount of money in your account.

Another feature it pays to look for is no-commission trades. If you think you'll be transacting a lot in your account, avoiding those fees could result in big savings.

3. Make it an ongoing thing

Investing your stimulus check, or whatever portion of it is left, is a great way to start off investing. But if you really want to grow a lot of wealth over time, it'll take more than a single $1,400 (or less) investment.

That's why you may want to find a way to continually pump money into your brokerage account. That could mean getting on a tighter budget to free up more cash each month or perhaps working a few hours a week at a second job to eke out money to invest.

The fact that many younger people have invested their stimulus checks is encouraging. And the sooner you get started investing, the more opportunities you'll have to accumulate wealth and get closer to meeting your financial goals.