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If you’re not sure whether it’s time for you to start investing, or if you should focus on saving, the answer depends on your goals, risk tolerance, and financial situation.

The difference between saving and investing

  • Saving — putting money aside gradually. People generally save for a particular goal, like paying for a car, a down payment on a house, or any emergencies that might come up. Saving can also mean putting your money into products such as a bank time account (CD).
  • Investing — using some of your money with the aim of helping to make it grow by buying assets that might increase in value, such as stocks, property or shares in a mutual fund.

Should you invest now or wait?

You may want to consider starting your investment strategy after you’ve:

  • Built your emergency savings. Savings should come first. Before investing, try to make sure you have a separate low-risk, low-return account you can use to cover expenses during an unforeseen event — typically at least three to six months worth of living expenses.
  • Paid off high-interest debt. By paying off high-interest debt in full, you’ll reduce the total amount you owe faster and free up money to put toward savings or investing.

Benefits of savings

  1. For short and long term goald
  2. Ready access to cash- Savings gives you access to your cash when you need it
  3. involves minimal risk
  4. Your money generates income

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