Should I Save or Invest My Money?
posted on Monday, February 20, 2023 in Financial Tips
People spend a lot of time pondering whether they should save or invest their money. And although both have their own benefits, it’s crucial to know what to expect when choosing one over the other. Before you jump right into it, here are some things you need to be mindful of:
Saving Your Money
Let’s first discuss saving money. Here, you’re putting some of your current cash aside. Most of the time, this money is used to pay for something later on. This could be for a long-planned vacation, a deposit on your home, or your emergency funds. Your extra finances can be placed in a savings or high-yield checking account.
One thing you should know about saving your money is that it’s great for short-term planning. It also limits any debt you have since you have funds that you can immediately use.
Investing Your Money
On the other hand, when you invest, you’re using your money to purchase something that you expect to turn into a profit or to increase in value over time. There are multiple ways of investing. Typically, you can buy stocks, real estate, commodities, or bonds. Each of these investment types can have different rates and returns. To start, you should open a brokerage account and start purchasing.
With investments, you have to keep a close eye on the constant fluctuation of stocks and bonds. The current economy can have a significant impact on their value. However, investing may have a higher return than putting your money in a savings account. This is especially true if you own a diverse collection of investments.
When To Save or Invest Your Money
If you need to have your money accessible at all times or haven’t built up an emergency fund yet, you may want to save up for now. You may also consider saving if you still have high-interest debts to pay. However, if you currently don’t have any financial liabilities and are willing to take some risk to make a profit, investing will be better for you. Ultimately, the decision will depend on your current financial situation.
No matter what you choose, Community 1st Credit Union will be there to help you achieve your financial goals. Talk to one of our C1st representatives today to learn more.