How to Know If You’re Ready to Start Investing

It's never too early to begin saving for the future, and generally speaking, sooner is always better. Having said that, some people are more primed for personal investing than others. Our credit union is here to help you figure out if opening a retirement account, investing in real estate, or entering the stock market is a reasonable next step.

6 signs you should start investing

The simple fact that you're reading this blog signifies you're open to putting money aside for the future. However, as outlined below, a few other indicators can tell you whether now is a good time to start investing.

1. You're not living paycheck to paycheck

Are you able to pay all your bills on time, make more than the minimum monthly payments on debt, afford everyday expenses, and still have some money left over? You might consider investing some of your extra funds. Even if you can only spare a small amount each month, every little bit counts.

2. You have a robust emergency fund

Do you have enough money saved to cover at least three to six months of living expenses? An emergency fund will keep you afloat in the short term in the event of emergencies such as a lost job or unanticipated medical bills—and maintaining one is a sign you're ready to work toward long-term financial stability too.

3. Your debt is manageable

There's nothing wrong with paying down debt while contributing to a retirement account—in fact, it's often recommended. That said, paying off a high-interest credit card or personal loan with a substantial balance can make it hard to fit in any more monthly payments, even to an investment fund. But if your debt is manageable you're wise to start investing.

4. You have money to spend

Do you have funds left over each month from a paycheck or self-employment earnings or money piling up in your checking account? If you're a relatively high earner and aren't sure what to do with your money, we encourage you to explore investing options.

5. You're thinking about your long-term financial health

Saving for retirement can feel like giving money to a stranger. However, when you're in tune with your future self and think about what your finances will look like decades down the road, investing might feel like a worthwhile expenditure. What's more, you can get the most out of compounding interest when you start early.

6. You want to grow your wealth

If you currently have a positive net worth (meaning your financial assets are greater than your debts), you might be thinking about how to grow your wealth. When you own property, have already maxed out your annual IRA contributions, and want to make the most of your earnings, it's a good idea to start investing in other areas.

Invest with a credit union like CCCU

In the end, everyone's situation is unique, and it's important to carefully assess your finances to figure out what's best for your current and future self. CCCU members have access to wealth management support and independent financial advice. Additionally, our Portland and Hood River community credit union is proud to offer high-yield savings plans, IRA retirement accounts, flexible mortgages, and tax-advantaged college savings accounts.

Become a member today and start reaping the benefits of investing with a credit union.

6 signs you should start investing infographic.