Building a budget is a straightforward process that involves adding up your total monthly expenditure, something you can do by checking bank and credit card statements and deducting that from your net take-home pay.
Ms Haines said: “It will also identify any areas where you are overspending so that you cut back to free up more cash for your savings and investment goals.”
Select your financial goals
Whether an investor wants to finance a child’s education, pay for a wedding, save up for a deposit for a house or fund a retirement, setting a clear goal pays off.
Ms Haines said: “Once you know what you want to save for, then you can align an investment timeline to fit in with that strategy.
“Saving for a holiday for example is a short-term goal with cash built up for that purpose best kept in an easy-access savings account because you will typically use the money within a year. A child’s university education or funding your retirement are long-term goals more suited to investing in the markets.”
Consult a financial coach
Before diving into the world of investment, it can be good to get a second opinion from a qualified financial professional to make sure the right path is chosen.
Ms Haines said: “Coaches can provide guidance on whatever query novice investors have during their investment journey. From identifying financial goals and how they might achieve them to helping them assess their tolerance to risk and understand how fees and taxes are applied.”
Coaching can also be much cheaper than paying for advice, with Bestinvest’s 45-minute coaching service, for example, one of the free services of this kind in the market.
Choose your investment vehicle
After consulting a coach and figuring out a timeline, attitude to risk and what to invest in, the next step is to consider how to invest.
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