Saving means to put some money aside for later use. When your kids are little, you encourage them to put some of their birthday money in their piggy bank. When they get older you may open a savings account for them to deposit some of the money they earn from jobs. It's the same way for adults. Saving means taking some money and putting it aside for later - maybe saving for holiday gifts or for vacation or for longer-term goals like paying for college, buying a house or saving for retirement. You can save your money at home or you can save money and deposit it in a savings account with a local bank. Investing means taking money that you have saved and using it to buy or participate in a business venture that offers the possibility of profit, or interest. You could invest by taking some of your savings and purchasing a savings bond, buying stock, or depositing money in a certificate of deposit (CD).
To plan ahead for your future, it's a good idea to making saving a priority. Even if it's saving just $10 from each paycheck or a little bit of money you get from occasional work or an unexpected check and putting it in a savings account, every little bit counts. Want to know how? Say you save just $20 a month, or $10 from each paycheck (if you get paid twice a month). At the end of one year, you will have saved $240. If you continue saving that same amount for 5 years you will have saved $1,200! Once you begin saving you'll want to make that money work for you by investing it wisely. Why? Because when you invest money you have the opportunity to earn something called interest.