By Ellie Croson
Why Saving and Investing is Important
Saving and investing are important in everyone's life. Saving is important because when you put your money in a savings or checking account you have access to that money but is safe in a bank where there is little risk of losing any money. You can also gain money by putting it in the bank. When you gain money from the bank its called interest. Interest is where the bank pays you a small percentage a year for putting your money in the bank. Investing is also important, when you invest you are using money with the intention of making a financial gain. You can invest your money in stocks, bonds, municipal bonds, mutual finds, ect.
Tips on Saving
When saving money its best to start with a put-and-take account (checking account) with a checking account you can put in what you need and access it as soon as you need it. You can use this money for anything like bills, clothes, gas, ect. Experts say that its best to put aside three to six months of your pay. It is a very low risk option and will benefit you greatly. Saving is a great way to fund your retirement. There are ways to fund your retirement, for example social security, company retirement plans, and personal saving.
Tips on Investing
If you choose to invest there are lots of options on what to invest in. You can invest in stocks, When investing in stocks you are putting your money into a business. The risk level for this is moderately high. When investing you always want to keep the risk in mind, there is a change that you wont be getting that money back from the stock if that business fails. The return on stock is about 11% with a higher return the liquidity will be low. If you plan to invest the best time to invest would be when your put and take account and budgeting is stable most people invest in there 20's and 30's.