I would not buy stock for a short term investment. It's way too volital (sp?). By definition a short term investment is something that you should be able to get at fairly easily, on short notice. If you have money in a stock, especially with the small amount that you are talking about. If you find that you need the money sooner than you thought, then you may be forced to sell at a loss. Don't forget to factor in the transaction cost with that too.
As far as the long term goals, what are they? Retirement, a house, or maybe a car? If it's retirement, I would highly reccomend getting a Roth IRA. If you've had the account for more than 5 years, and are over the age of 59.5 than you can withdraw any interest you earn tax free. That means that you will not pay any capital gains tax on any interest you earn. With a standard investment account, you will have to pay taxes on your earnings. You can also withdraw your original contributions (not the interest) before the age of 59.5 if you have had the account for more than 5 years, and you are using the money for the purchase of your first home.
But back to the Stock investment stuff. First of all, If you have any credit card debt you should not be playing in the stock market at all. If you have card X with a balance of $1,000 @15% interest, any money you put torwards that card will give you a guarenteed 15% rate of return. It's basically money that you wont be paying in interest, which is kind of like earning interest, because in the end, you will have paid less interest on the balance. Second, do you have an emergency fund (go to hell fund)? This should be equal to 3-6 months expenses, and should be very liquid, as in a savings account. If you were to lose your job, or have an emergency car repair come up, then you can draw from this account to keep you on your feet. This is more of a personal preference, but it's never a bad idea.
Third, you mentioned something about if you just had $300 sitting around, that you would probably spend it on something. I don't think the problem is with saving the money, but with spending the money. If you feel that you have to spend the money just because you have it, then you should find some other activity to take your mind off the urge to spend it.
All that being said, the best thing to do is to start now. It seems like small stuff at first, but it adds up quick. I still have my first 401k statement from 5 years ago, which is about the time I started investing stuff. The balance is $29.94. I'm not going to say how much I have now, but I'm well on my way to being a 50 year old millionaire. If I start investing a little more as my salary grows, then that age will keep decreasing. Either way, I plan to be able to retire and live off the interest earned, without ever digging into the meat of the balance. I guess the point is to start NOW, while you have time on your side.
Regardless of where you put the money, You've already taken the first big step. You've made a concious decision to start saving. Now you just have to define your goals, and stick to them, and watch the money pile up.
If you fail to plan, then you plan to fail.
Edit* Please disregard my signature when reading this post.
). That started when I worked there. I probably should have bought into Checkpoint's stock when I started as well, but it was only like $8/shr, and wasn't doing much. Now it has been over $20. Oh well.....
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