My Advice on Saving and Investing

By: Katelyn Owen

The Importance of Saving and Investing

Savings are important because:

  • It can help cover unexpected financial events
  • Help for a down payment on a house
  • Save for a vacation
  • For future emergency events

Investing is important because:

  • Either way your money ends up being invested
  • Inflation decreases the buying power of your money if it's in a savings account
  • You get the profits when you personally invest your money
  • Helps with long term goals

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Tips on Saving

If your putting your money into a savings account for the short-term goals in your life, here are some tips:

  1. First off there are two options; Check-able deposits and savings deposits.
  • A check-able deposit is the amount of money you put into a checking account. They are highly liquid and can quickly be converted into cash. It however, earns little to no interest.
  • A savings deposit is money deposited into a savings account. It earns more interest than check-able deposits even though their return is still low. They are only slightly less liquid than check-able deposits. Easy withdraw.
2. It may not make much interest in these accounts but at least it will be easily accessible and is returned in full whenever you need it.

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Tips on Investing

If you plan on investing your money to earn some profits and have money for your long-term goals, here are some tips:

  1. It both offers rewards and poses risks
  2. By investing your money, you can double your money or you can lose it. Just depends on what you go for.
  3. Compounding is a great advantage of investing. Compounding is the ability to generate earnings and reinvesting for those earnings to gain even more.
  4. You can invest in stocks and bonds but always, always, always weight the rewards versus the risk before you commit.
  5. The stocks and bonds have some liquidity but its not exactly high. It's about medium. Most have a time duration that you have to follow.

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