Are you ready to invest? A simple checklist before you start

Important information - the value of investments and the income from them can go down as well as up, so you may get back less than you invest.

Looking after your hard-earned money matters. Beyond your workplace pension, investing any extra savings - outside of your pension - can be a way to make your money work harder. Done well, it brings a sense of security, achievement and wellbeing. But it comes with both risks and potential rewards. That’s why it’s worth taking a little time to prepare before you start.

Here are a few key things to think about before you begin your investing journey.

Tackle any debt first 

Before investing, make sure you’ve paid off any short-term or high-interest debt – such as credit cards or personal loans. These debts typically cost more in interest than you could earn from investing, so it’s usually best to clear them first. And never use borrowed money, such as a credit card, to fund investments. 

Will you need your money in the short term? 

Life is full of surprises, both good and bad. If you suddenly need cash for an unexpected expense and have to sell your investments, you might have to do so at the wrong time – potentially missing out on future growth.

That’s why it’s important to build an emergency savings fund before you invest. Having money set aside for short-term needs gives you peace of mind and means you can leave your investments untouched to grow for the long term. 

Are you comfortable with risk?

It’s natural to feel cautious about risk. No investment is completely risk-free. Markets naturally rise and fall, which means you need to be prepared for the possibility that the value of your investments could go down as well as up.

If you’re comfortable taking on some level of risk, you can shape your approach accordingly. That might mean investing across a diverse range of assets, so that your money isn’t dependent on one single investment performing well. This mix – known as diversification – can help spread risk and smooth out returns over time.

Investing should always be seen as a long-term commitment – ideally for at least five years – to give your money time to recover from short-term market movements. 

Are you okay with the idea of choosing your own investments? 

It’s completely natural to feel uncertain about where to start – especially if investing is new to you. But there are tools and resources to help you feel more confident about making your own decisions.

Start by thinking about your goals and timeframes: are you investing for a specific purpose, such as a house deposit, your children’s future, or retirement? Once you’ve defined your goals, you can choose investments that match your appetite for risk and the time you plan to stay invested.

And remember, you don’t need to be an expert to invest – just patient, consistent, and willing to stay focused on your long-term goals. Support and learning tools can also help guide you as you build confidence over time.