Picking the right time to start investing can be tricky, but it can be made simpler by looking at your personal situation and formulating a timeline that works best for you. Let’s have a look at some factors you may want to consider before you start investing.

Consider your financial position

When you look at your finances, look at everything. That means savings, debts and any recurring expenses – it all needs to be on the table for discussion to develop y

our roadmap towards investing.

  • Sort out any debts: Figure out where you have debts – this will get you started on planning to pay these debts off, particularly if they’re high-interest debts such as credit cards. It’ll also help you realise how many debts you’re juggling at once.
  • Save for an emergency fund: Check how much you have in savings and work out how much you’d like to save before you start investing. This will help you develop your overarching investment plan. It’s good to have a safety net of cash saved in case unpredictable and uncontrollable expenses crop up.
  • Factor in recurring expenses: Take note of any expenses you have that simply can’t be controlled – utility bills, rent, insurance and the likes. Sadly, these expenses are a fact of life and aren’t going anywhere. But, that doesn’t mean they have to impact your plans to invest! Factoring these regular expenses into your overall financial plan can help you prepare to invest sooner.

Create a budget

Once you have considered your financial position, it’s a good idea to start arranging a budget. This is where you can list all the expenses and debts you highlighted in the above steps to start formulating a plan of how you’ll hit your savings and investing targets. Don’t forget to factor in your income – in whatever shapes and forms this takes, from your regular daily job to any ad hoc tasks that generate some type of income. Once you have your budget, remember to stick to it!

Set your investment goals and prepare your investment plan

This might seem like two steps in one, but once you have decided on what you aim to achieve from investing, your plan to make these dreams a reality will come naturally. Following through all the earlier steps will mean you’re well and truly prepared to tackle this step. It’s important to factor the risks of investing into your plan to help you prepare for everything that could possibly be thrown your way.

Now, get to investing! The preparation might seem tedious and strung out, but once it’s done, it’ll help you navigate your way through all the highs and lows of investing.

General Advice Warning: This information is intended to be general in nature and is not personal financial advice. It does not take into account your objectives, financial situation or needs. Before acting on any information in this article, you should consider the appropriateness of the information provided. In particular, you should seek independent financial advice.