Saving vs. Investing

Saving and investing money are two very different things when it comes to planning your financial budgets. Both of these things play different but significant roles in building your financial plan and put together a strong financial strategy. While saving means putting some money aside in a calculated amount and keep it for future uses as it is, investing refers to spending some money on a greater asset in the hope of getting the return with due profit.

Before you start building your financial plans, you must fully understand the difference between the two terms and how they work together side by side and contribute towards good financial strategies. Saving money includes putting liquid money in saving accounts, checking accounts or other forms of regular banking accounts or cash in hand kept aside while investing money includes putting your money in properties, stocks, bonds etc. One of the major differences between saving and investing money is the amount of risk included. While the amount of risk included in saving money is comparatively very less, investing money has some bigger risks associated. While saving your money, you always have that specific amount ready to take and use within your reach whereas when you invest an amount , there’s a huge risk that your money may or may not recover, partially or completely which makes investing a high-risk task.

However, some people also consider saving money risky if it’s a lot of cash in hand stored in easily accessible places.

However, an important point here is that savings should always be a prior option to investing because your savings will gradually feed your investments time and again. Moreover, in case of any crisis, your savings will be easily accessible and you will not have to sell out your assets in order to meet your basic living standards.