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Should I invest my money?

The world of investing can be intimidating and it’s sometimes difficult to know where to begin. But we’re here to make it just that little bit easier for you.

As everyone's financial goals are different, it can be tricky knowing when the right time to invest is.

Of course, there's no right answer it’s individual to the person and we can’t tell you when's the best time for you.

But we can explain what you should take into account when you’re thinking of investing.

Things to consider before investing

Before taking the leap and investing, it’s important to know what you should consider beforehand.

Some key things include:

  • Debt: Reducing or paying off debts before investing money is key to a healthy approach to investing. It also frees up more money to invest because if you have less debt then you have less interest to pay
  • Risk: With investing, there is always a risk that you could lose money, but there are ways to invest that reduce this risk. Generally speaking, the more risky your investments are the more money you could, potentially, make or lose. So, it's important to consider how much risk you're comfortable with
  • Financial goals: Do you have a plan for the money you're investing? Have you thought about long-term and short-term goals? Having these in mind will help you to plan when you'll withdraw your investments and make it easier to resist the temptation to take your money out when the markets aren't doing well
  • Emergency funds: It can take a while to access the money you've invested so it makes sense to keep some money back as an emergency fund just in case you need money quickly. Rather than investing everything you have, it's a good idea to have 3-6 months of your salary saved somewhere accessible

By carefully considering these factors, you can start to build a well-informed and resilient investment plan to confidently reach your financial goals.

Should I invest now?

If you have money in the bank that you're not likely to need in the near future, then it might be a good time to start investing.

But most financial advisers will tell you the same thing: avoid investing any money that you might need for your short-term plans.

Before making any big investment decisions, it’s important that you’re already in a good place financially. This is the most important thing to consider if you're thinking about investing your money.

If you have cash available that you could stash away for a few years without worrying you'll need it, investing it might be a good option!

Think of it like planting a money seed and watching it grow over time. It's not about having loads of money right now, it's about setting yourself up for a brighter financial future.

How much money should I have before I start investing?

The amount of money you should have before you start investing depends on you, as everyone's situation is different.

As we’ve already mentioned, the main the thing to keep in mind is whether the money you're thinking about putting in an investment is cash you might need in the short run. If it's money you can lose for a while without missing it, that's your green light!

But before you jump into the world of stocks and shares, make sure all your basics are covered and that your budget is realistic and leaves you with money to invest. Everyone has different monthly expenses, so a budget that works for one person might look different for you.

Don’t forget: along with your regular monthly expenses, make sure you put some money away in case of emergencies!

How much should I invest?

When deciding how much money to invest, the golden rule is to keep within your means.

This will mean something different to everyone. So, the best thing to do is make a budget that's realistic and covers all your essential needs and commit to sticking to it!

If you’re new to investing, starting small is a smart move. Begin with smaller amounts and then you can gradually build your investments as your confidence and knowledge grows. This will help you learn without getting overwhelmed.

Just be careful. When you're feeling comfortable and you’re making money through your investments, it can be tempting to start investing more than you can really afford.

But, like most activities that involve risk, unexpected challenges can come up so make sure you always stay true to your budget, invest within your means and avoid going too far.

That's the secret to having a winning strategy and avoiding financial curveballs.

Take your investment knowledge to the next level with OneFamily

At OneFamily, we're here to support you at every turn of your savings and investment journey.

Whether you're just starting out or looking to refine your knowledge, our Investments for Beginners hub is a valuable resource, offering insights and guidance tailored to your needs.

OneFamily's Stocks and Shares ISA

Our Stocks and Shares ISA invests in the stock market on your behalf, so it can be a good way to start exploring investing, especially as it comes with two fund choices.

Like with all investments, the value is likely to go up and down over time so there is a risk that your investment could be worth less at the time you choose to withdraw your money.

Explore Stocks and Shares ISA

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