Two things to consider before investing in the stock market

Pay off any short term debt

Before you invest, it is important to ensure that your credit card payments are paid off. This also covers any personal loans, overdraft and any short term debts.

Interests on your credit card can increase when you delay any payments, so avoid any unnecessary stress and clear off any debts this will help to give you a clear slate.

Once this is done you can start to strategically save and invest.

Save at least three months of pay

Life happens.

It is important to feel confident in your ability to fund any emergency problems. There is never a guarantee that your job will always be there or you may have a serious request pop up that requires you to support your loved ones etc.

This leads to the topic of emergency funds, so that regardless of any arising situations you are able to easily react.

Your emergency fund depends on your circumstances e.g you may have dependants, you may rent, you may have a big family, you may have other commitments that requires your attention.

As a minimum, try and aim to have three months of living costs saved up. You should be able to live on three months without expecting any earnings to come through.

I know that some of you may automatically react and think hold on how do you expect me to save three months worth of living costs, but the sooner you start the better plus you will be surprised about how much you can save. The time also goes by really quickly.

Once you reach three months, you will be in a better situation to invest. Then you can also push yourself to six months worth of savings.

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