Setting goals should always be the first step in any significant financial changes you're looking to make. Whether investing, buying a house, or working to increase your income, think of your goals as a roadmap to take you from Point A (where you are now) to Point B (where you want to go).
If your financial goals are your road map, then consider your budget the vehicle that's transporting you along your journey. Often overlooked, your budget is your foundation to financial success. Having a solid grasp of how you spend and save is essential to the beginning investor.
And if your budget is the vehicle to take you where you want to go, financially speaking, then an emergency fund is like your AAA membership (American Automobile Association). When you own a car, you expect it to have issues or need maintenance at some point.
Once you have built an emergency fund, look at your debt profile. Are you in debt? If your answer is “yes,” what types of debt do you owe? Since debts carry different interest rates, accounts like mortgages and student loans often have lower interest rates. In comparison, credit cards and personal loans are typically considered high-interest debt.
It's perfectly normal to feel scared of something you don't understand. Investing-related terms such as real estate investment trusts (REITs), exchange commission, and market conditions can sound like a foreign language to would-be investors.