When trying to get ahead, lots of people ask themselves, “Should I save my money or invest it”. The answer? It depends on your current financial situation and goals.
- Start with saving. Savings are your safety net. Before diving into the stock market or other investments, it’s wise to build an emergency fund. Emergency funds should ideally contain three to six months of living expenses to protect you from unexpected bills or job loss.
Some savings accounts, such as a TFSA, are low-risk and tax-free, but they typically yield minimal returns. That’s why savings are ideal for short-term goals, for example: vacations, car repairs, or a down payment.
- When to invest. Once your emergency fund is good to go, investing should come next. Investments – like stocks, bonds, or real estate – offer higher potential returns but with added risk. They’re best suited for long-term goals such as retirement, college funds, or wealth building.
The earlier you start investing, the more time your money has to grow through compound interest. Even small, consistent contributions can lead to significant gains over time.
- Talk to an expert. When it comes to your money, you don’t want to learn the hard way. For more information on financial planning, setting up a TFSA account, or other investments, talk to one of experts! Book an appointment online to get started!
