We all invest some amount from our income for out future goals and retirement. There is not any right time to invest, however, it is better to invest with lesser liabilities and simpler financials.

Before you commit all your money towards investment, here are a few things you need to fixt first to avoid any financial hassle.

#1 Plan a Budget

We often start investing without planning our budget for regular expenses. As a result, we end up breaking our investment commitments to meet our future expenses.

Planning a proper budget considering your household income, expense, and short term financial goals will help you devise a feasible amount that you can invest comfortably. Also consider income from rent, interest, or dividend among others. While calculating expenses, calculate transportation, pocket expenses, school fees, loan EMIs, leisure expense, and miscellaneous.

#2 Pay off debts

Credit card bills, personal, car loan, home loan, or any other debt normally comes with greater rate of interest than savings. The interest paid for debts averages your returns of investments.

For example, if you are paying 12 percent interest on a personal loan and earning 11 percent interest on your investments, then you are only losing money. There is no wealth creation! You can increase the amount of your EMIs to repay your debt at a faster pace.

#3 Plan Goals

You should know the reason behind your investments. This will help you segregate your investments to fund short and long term goals. You can start investing different amounts with different durations.

For instance, you can invest in equities to buy a new car in next 5 years. However, to fund your child's education after 15 years, you can create a portfolio of debt and equities to for long-term gains with lesser volatility.

#4 Emergency Fund

Emergencies like a job loss or uncovered medical expenses can erupt at any point in time. These unfortunate events can turn your financial planning upside down. To keep everything normal even in such emergency, it is advisable to create an emergency fund that can cover your household expenses of at least 6 months. You can park these saving in a short-term liquid fund or bank's savings account for instant access.

#5 Insurance

A prolonged illness can burden you with medical bills worth millions. Hence, having an adequate coverage for you and your family. You should also opt for a good life insurance plan to hedge your family's expenses in your absence.

Considering these points can help you plan your investments more efficiently.