Don’t jump into the market without a plan.
- Create an emergency fund
3 to 6 months of basic living expenses is a good target for most people to have a fully-funded emergency fund. The goal is to have enough to manage unexpected or crisis-related expenses without borrowing money or being forced to sell your investments at a bad time. Check out the Saving For Emergencies guide to learn more about building extra protection into your budget.
- Manage your debt level
It’s often a good idea to pay down high interest debt before you invest. Chances are the interest rate on your debt is higher than the return you may get on your investment. Get guidance on preventing and managing debt.
- Create a budget
Know where your money is going and have a plan for where you want it to go in the future, before you invest. Learn more about budgeting and saving.
- Have adequate insurance
Having insurance will help protect your investments from being tapped if something unexpected occurs. It is important for you to have appropriate insurance for the things that could happen to you, your health, or your property. Check out our guides on insurance to learn more.