10m+
Customers helped
27,000
Advisers
2009
Est.

When to start investing: 5 things to help decide if you're ready

Updated 16 June 2022

3min read

Kate Morgan
Staff Writer

Many people try to invest too quickly, without having got all their finances straight.

Although there’s no rule against this, investing from a stable starting point is always the best advice.  

This simple checklist will help you decide whether you're ready to start your investment journey, when to invest and whether you have a few things still to tick off before exploring your options.

When to start investing: 5 things to help decide if you're ready

1. Pay off your high-interest debts 

Take stock of what your debts are, particularly those with high interest like credit cards or payday loans. Consider switching to a lower interest card or 0% deal so that you can start making a greater dent in the capital amount. Also think about whether you could consolidate multiple cards and start tackling the full amount owed.  

The reason it’s important to make this a priority is because any returns you make on your investments are unlikely to keep exceeding the interest fees on your debt, so there's a chance you may still find yourself losing money overall. 

2. Have a three-month buffer

Life doesn’t play by the rules and unexpected bills like car repairs or home emergencies can quickly derail any investment plans. Build up a buffer equivalent to three months’ worth of salary in easy-access savings so you know you can cover any surprise costs. 

It’s also worth exploring insurance and protection options to cover unexpected events like illness, injury or loss of income. This would give you peace of mind, knowing you’d have financial support without being forced to sell investments earlier than you’d like. 

3. Check your pension contribution 

You’re investing already if you pay into a pension. What’s more, it’s a very tax-efficient way of growing your money because you won’t pay tax on the returns. For starters, check your contribution levels and consider if you could afford to pay more. Similarly, check if your employer already contributes the maximum amount and that, if you paid more, they would match it. 

You can contribute up to 100% of your earnings to your pension each year or up to the annual allowance of £40,000 (2022/23). This means the total sum of any personal contributions, employer contributions and government tax relief received, can’t exceed the £40,000 annual pension allowance. Individual circumstances differ so always seek independent advice when it comes to your pension planning. 

4. Set your financial goals 

Have you got a specific goal in mind when it comes to investing? Having a purpose makes your investment more tangible and enables you to see the progress you’re making. 

Even if you don’t have a big life goal in sight right now, chances are that you might want to save for a house deposit or review how much money you’ll need saved for retirement. 

Most importantly, having financial goals enables you to get started. Even small steps such as putting aside a little a week puts you in control of your financial planning. 

5. Decide on your attitude to risk 

Investing is a long game and you should be prepared to wait at least three years to give your money the best chance of earning decent returns. The stock market tends to outperform cash, but not necessarily in the short term.  

For this reason, it’s crucial you understand your attitude to financial risk and how much you would be prepared to lose. There’s no right or wrong answer to whether you should be adventurous or cautious, you have to decide what’s right for you and your circumstances.  


Whether you have passed this checklist with flying colours or have a little more work still do, you might benefit from working with a financial coach. Like a personal trainer for your money, financial coaches take a holistic view of your money and work with you to plan your financial goals and future. 

We’ve partnered with Claro, the UK’s first financial coaching app. Find out more and book a financial coaching session today. 

Book a financial coaching session today

Disclaimer: This article does not contain any personal recommendations for a particular course of action, service or product. By clicking on the link to find a financial coach, you will be directed to Claro Money. Before subscribing for any services offered by Claro Money, please read the terms and conditions document on their site. 

About the author
Kate has written for leading publications and blue chip companies over the last 20 years.