A month ago I wrote a post here giving a nice little blueprint to millennials on how to start investing by age 20 and, following my plan, showing how much money they could have by age 65. I wish I’d known that when I was at that age, but I didn’t; always glad to pass knowledge when I can.

Creative Commons License Hernán Piñera via Compfight

Although I stick by that plan, I thought it was important to follow up with a few more things. Investing is great for long term success. However, there are things that everyone needs to at least consider, if not address, before getting into investing too deeply. Thus, a follow up that’s actually a prequel; can one do that with blogging? Let’s find out, as I talk about 3 things that should be done before investing money.

1. Learn how to budget your money.

I started out by telling you in the other article to just start putting money away. Well, that’s pretty easy to do when I started you off with only $10 a month. It’s not as easy when you’re getting close to $100 a month or more to do that without a budget.

If you have a budget you know where all your money is going and, by including the money you’re taking out for investing, because you’re used to that (hopefully), you could make things easy on yourself. However, if you’re putting money away that you can’t afford… that doesn’t help you at all in the “now”, which is just as important as your future.

2. Keep debt as low as possible.

It doesn’t pay to have a lot of money saved if you have big bills to pay or continuing bills to pay. For most people, the interest rate on debt is higher than on savings (most credit cards average around 14.9% a year while saving might average 5% a year). Therefore, it’s not only smart to pay it down, but also to keep it as low as possible. Buying things like cars or homes is an investment so those are good, but maybe some other things can be budgeted for instead.

3. Put some money away for a rainy day.

Okay, that’s a stupid catchphrase someone came up with centuries ago so let’s update it. You know the recommendation is to put away enough money to last you four to six months in case you lose your job? I’m going to go you one better. Try to save up enough money to last you 9 months to a year, and not only because of your job.

Basically, the savings recommended is to allow you to pay bills. My recommendation is to try to allow you to have a life, which means eating, going out from time to time, being able to pay to fix your car or refrigerator, pay the doctor or dentist if needed… stuff like that. It’s smart to save for the minimum but if you can save for more you’ll be way ahead of the game.

Taking care of yourself means both your present and future. By making sure you address these 3 things, you should be fine.

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