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When should you start investing? At first glance the most reasonable response would seem to start investing right away.
Well, investing as soon as possible may or may not be the appropriate time depending on your financial situation. To put it simply, you should start investing only if you have your ‘financial ducks’ in a row. So what does that mean?
TAKE CONTROL OF YOUR PERSONAL FINANCES

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1. Do you have an emergency fund set up?
An emergency fund is money put aside to cover unexpected expenses such as car or house repairs, theft, or even loss of one’s primary source of income.
Depending on your circumstances (such as, how quickly you can find additional or an alternative source of income), you should aim to have enough funds saved to cover 3 to 6 months of your living expenses.
Not only is setting aside an emergency fund a financially sound decision, but it is also a mentally freeing one.
You will be much happier, and likely more productive, knowing that you have enough saved up for a rainy day.
2. Are you carrying any high-interest consumer debt?
The most common type of debt is credit card debt. While credit cards are useful and even necessary for certain purchases, they need to be used with caution. And here is why: credit cards charge high-interest rates which are typically a lot higher than the return you would earn from investing.
If you are paying out more in debt interest than you are receiving in investment returns, the bottom line is that you are losing money.
Making credit card purchases should be avoided if you cannot repay that debt within a month. Making credit card payments (in full) within the month the expense is incurred ensures that you avoid paying those high-interest charges altogether.
Again, you will be so much happier being debt-free (or at least, being high-interest debt-free).
3. Are you spending your hard earned money unnecessarily?
Too often, it is the small sums that add up and chip away at your bank account balance. For the most part, you will have planned and saved up for the big-ticket items (new laptop, the big screen smart TV, vacation trip, etc).
But how about that daily dose of caffeine paired with a muffin or bagel on your way to work. Or the irresistible on sale items purchased at the mall (or online) in a spur of the moment. Or the frequent dinner take-outs. Or the under-utilized gym membership. The list could go on and on because the truth is that the temptations are all around us.
None of these things are bad in and of themselves but if not careful, unnecessary purchases could hinder you from achieving financial stability and thus your ability to start investing.
4. Are you taking care of your physical and mental health?
This last check may seem unrelated to the topic on hand but just stay with me. I believe physical health goes hand in hand with financial health. There is an ancient saying that loosely translates, “if you do not repair a crack, soon enough you’ll be building an entire wall”.
To put this in perspective, the upfront cost of taking care of your health cannot compare to the backend cost of treating a medical issue.
Are you eating right, exercising regularly, getting enough rest and generally taking care of yourself physically and mentally? If so, your loved ones and your bank account will thank you for it.
Now that you have your basic financial ducks in a row, you are well on your way to start investing and I am excited for you! Find out the main reasons to start investing your money here.
Finally, if you have enjoyed this article on what you should consider before investing or have any questions, please leave them in the comment section below. I would love to hear from you!
“When I look into the future, it is so bright it burns my eyes” ~ Oprah Winfrey
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TAKE CONTROL OF YOUR PERSONAL FINANCES
