Save Your Money or Invest It?

By Megan Floerchinger

Why They're Important

Saving and investing is an easy way to make a little bit of money. It is important to save for your future, especially if an emergency were to happen. When you are saving money you are helping the economy grow too. By letting the banks use your money to loan out to other people. Saving for retirement is a must because you don't want to be working your whole life. When you retire you need money to live off of. With investing your money there is a high return, but also a high risk. It's a way to earn a lot of money to pay off major expenses.

Tips on How to Save

  1. Keeping track of how much money you spend, then you can decide if you are spending too much and need to put it into a savings account instead.
  2. Pay all your bills and monthly credit card payments on time, then you don't have to pay late fees.
  3. Improve your credit score, it could save you interest when you go to get a loan. You can do that by just simply paying your credit card bills on time.
  4. Never pay ATM fees, if you go to an ATM that's not your bank it usually costs you a few dollars. Go to one that is your bank or when you go to the store and buy something with your card just get cash back.

Types of Saving

Savings Account: It is an easy way to put aside extra cash, and get it out whenever you need it. Customers can earn interest on the account but it is very little.

Checking Account: Is about the same as a savings account but has a little higher return of .003% compared to a savings account of .001%. Risk is still very low and liquidity is high.

Tips on Investing

  1. Look at how much risk is involved, the higher the risk the greater reward but then you take the chance of not getting all your money back. If you are younger you can take a bigger risk because then you have plenty of time to pay it off.
  2. Buy low and sell high, for example buy stocks, art, collectibles,etc. for a low price and sell them for more money than you bought them for.

Types of Investments

Bonds: It guarantees that you will get all your money back and then some, but the investor can't get their money back until after a certain amount of time.

Property: It has a high risk, but to come with it it has a high return of about 20%. The liquidity is very low because it can take a while to sell property.