Right after your graduation, it is said to be the beginning of a new chapter in life. You might be wondering what is the meaning of money and trying to figure out which is more crucial, save first or invest first? There is no wrong answer to this and it depends on your financial situation. If you are just starting out, maybe saving will be a better choice, however if you have an aim to expand your savings, investing is the way!

Why is saving important?

The importance of saving money is to help protect you in the event of a financial emergency. Additionally, saving money can help you pay for large purchases, avoid debt, reduce your financial stress, and provide you with a greater sense of financial freedom.

Why is investment important?

Investing ensures long-term financial security for now and in the future. The money you get from the investment is a regular income and is able to protect your cash. On the other hand, since most investments make a monthly or annual dividend, it is partly passive income.

If you are only aiming to save, it is not a bad idea! By saving, you can always have a backup plan should something unexpected happens.

So which one is the best choice for you?

Both are a wise choice! To put it in context, savings are pre-invested because investments come from saving. Once you decide to invest in something, you would require funds, and those investments come from your savings. For example, if you save $ 2,000 in a bank, it will give you back an Interest about 2% per year and accumulate to $ 400 in 10 years. That is actually an investment on it’s own.