Summarize the following:
Set aside 3 to 6 months worth of living expenses so you're covered if disaster strikes. This money should be easily accessible, but separate from any of your investment accounts. Keep your emergency fund in a savings account (that way it will earn at least a little interest) separate from your main checking account. Get a debit card specifically for your emergency fund so you can access the money quickly when you need it. Any interest you earn from investing will typically be less than 10 percent. If you have credit cards or personal loans with an interest rate greater than that, you'll eat up all your investment earnings trying to get out of debt. For example, suppose you have $4,000 to invest, but you also have $4,000 in credit card debt at 14 percent interest. Even if you realized a 12 percent return on your investments, you'll only make $480. Since your credit card company charged you $560 in interest during that time, you're still $80 in the hole, despite your smart investment strategies. Not all debt is created equal. You don't necessarily have to pay off your mortgage or your student loans before you start investing. These typically carry lower interest rates and can ultimately save you money if you deduct the interest on your taxes. Your investment goals determine your investment strategy. If you don't know how much money you want to make, and how soon you're going to need it, you can't be sure you've chosen the right strategy. You'll likely have short-, mid-, and long-term goals. Decide how much money you'll need for each, and how long you have to make that money. Defining your goals also helps you choose your investment vehicles. With some investment accounts, such as a 401k, you are penalized if you withdraw funds early. You wouldn't want to use that sort of account for a short-term goal because you wouldn't have easy access to the money. You don't necessarily need a financial planner to invest. However, someone who knows market trends and studies investment strategy can be a good person to have on your team especially if you're just starting out. Even if you decide not to stay with a planner or advisor in the long term, they can still provide you with tools to get you started on the right path. Bring your list of goals and discuss them. A financial planner can provide you with options that will help you meet those goals as efficiently as possible.
Build up an emergency fund. Pay off high-interest debt. Write down your investment goals. Consult a financial planner.