It’s Okay to Take a Break from Investing

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I recently stopped some of my Wealthsimple deposits, for a few reasons. Although my round-up investments are still linked, I’ve stopped my automatic monthly deposits. Part of me feels guilty, but I’ve spent a lot of time on the decision and am confident it’s best for my financial future – that is, as long as I go about it correctly. If you’re taking a break from investing, make sure to do it right!

The Economy Sucks

Let’s be honest, we’re not in the midst of a fantastic stock market at the moment. Although it’s definitely on the rise from this last December, many people are still wary of and disappointed in their stock market contributions. I definitely am! And that’s not even going into my financial hell that is renting in Toronto. Investing as a student is a crucial part of one’s financial future, sure, but so is paying rent.

I’m a full-time student in Toronto working multiple jobs, and money is always tight. When I sat down with my monthly budget glass of wine and took a hard look at the $40 I had set aside for investments and the $10 I set aside for the week’s groceries, the decision seemed really obvious. The fact of the matter was I needed the money.

Cutting down your investment deposits is something a lot of us will have to do at some point or another. It sucks. If you’ve made the decision to pull back on your contributions, you should be focusing on how to do it without hurting your financial future.

Can You Afford to Invest?

Although investing is essential in the quest for financial stability, it also costs money (I know, crazy right?). I attest to putting as much money as you can spare into a portfolio, but the key is knowing how much you can spare in the first place. Basic needs are more important than your interest earnings.

It’s time for my favourite piece of advice! Budgeting with wine! I guess the wine part is optional, but highly recommended. Money can be stressful, especially when you sit down specifically to cut things down.

Start by taking your month’s income and subtracting from it. First, of course, subtract all your set bills. Rent, phone bill, utilities, mortgage, etc – anything that you can aptly plan for. Next, subtract your essentials, things like groceries, transportation, and your eating-out budget (this is assuming you already have a working monthly budget). Finally, you’re going to want a buffer of about 10% of your monthly income, in case you find yourself overspending this month. Subtract that as well, and take a look your remaining balance.

Then, and only then, investing comes in! I would recommend investing about half of what’s left, in a perfect world, but of course that part is up to you.

Did you run out of money to subtract from at any point in this process? Me too! Chances are, you shouldn’t be investing right now. Work on increasing your income or reducing your expenses before looking into building your portfolio.

Before You Stop Investing

If you’re more strapped for cash than usual but still want to be investing, there’s a couple of other changes you can make.

Reduce Your Deposits

Don’t put the numbers away yet! Before deciding to stop investing entirely, you should take a look and see if you can cut your monthly deposits down instead. Adding $10/month is better than nothing. I still have my round-up savings going toward my stocks, which usually adds up to about $15/month. Although only $180/year, that’s still $180 more than most of my peers. Maybe most importantly, keeping my round-up savings going means I haven’t totally given up. Not only does it help with the guilt of not building my portfolio enough,  it also encourages me to get to the point where I can start depositing a lot more money. Smaller deposits are the first step to take if you’re considering taking a break from investing!

Risk-Free Options 

Perhaps you’re more concerned with how your money will do rather than investing it in the first place. That stress is probably rooted in some valid reasoning, considering the risks in the market right now. However, this should never be a reason to pull your assets.

Consider switching your deposits to safer investment options, like a GIC. This way you can have more peace of mind watching your money leave your account, without stepping back from your portfolio entirely.

If this is your plan, however, hold back from withdrawing your money! Especially if your earnings are low at the moment. Just let those investments sit for a while, and start depositing in your chosen low-risk options. One of the first rules of investing is not to withdraw while you’re in the red!

How to Take a Break from Investing (the right way)

Okay, so you’ve decided to cut your deposits entirely (I’m there with ya, friend). The most important tip I’d give is setting a timeline on your hiatus. Tell yourself that you’ll take another look at your investment accounts in 3 months, and at that point revaluate whether you have the means to begin investing again.

If you’re stopping because of financial strain (like I am), then it’s difficult to set a timeline. That’s okay too. As important as investing is, it’s not worth beating yourself about if you’re just trying to get by. Take a break; use that money for food or to pay rent. In my experience, it’s hard to miss it when this strain lightens up. You tend to notice it when tthere arean extra few bucks in your account at the end of the month. I know immediately throwing that extra cash into your portfolio can be hard to do, but remember it’s magic money!

I can’t stress this enough: do all you can to leave the money you’ve already invested alone. Taking money out, especially considering the current market, is almost always the worst thing you can do.

Finally, trust your judgement. You know where your money needs to be better than most people do. Sit down, think about your priorities, and decide how much you can dedicate to investments. It’s ultimately your choice to take a break from investing!


About Author

A professional writing student at York University, Toronto. A newbie in the world of personal finance, but writing with MAG I've got the perfect teacher! Literary nerd, writer, and coffee enthusiast.


  1. I personally recommend to keep investing. Even when the stock market goes down more often than not there are rallies. However, in times of need for example, if you need to save for a car or house, you can slow down on the investing. I try to invest at least 5% of every paycheck, but sometimes go up to 30%. However, you should stop if you absolutely need money.

    • Meagan Loose on

      I agree! It definitely shouldn’t be the first thing you cut, but unfortunately some of us have to.

  2. If you were down to $10 a week for groceries, it’s definitely a good thing you cut back on investing! I currently invest what I have leftover after accounting for my needs plus a couple of savings goals (replacement car fund, for example, and increasing my emergency fund). It doesn’t make sense to make yourself go broke now just to be investing in your future. So yeah, decrease your contributions if need be or, if push comes to shove, take a break. As long as you don’t think inertia will take hold long-term, there’s really no harm in it right now.

  3. The greatest takeaway for me from this article is that one can invest even the smallest amounts. I wish I did that when I was a student. I never even considered investing the leftover 40 bucks (or other random small amounts). I left it in my checking account without giving it a second thought.
    For whatever reason, I had the perception that investing can only be done in thousands. I didn’t start investing until my full-time professional job at 23. I missed out on so many years of compounded growth.