Saving vs Investing – Where Is Your Money Better Spent?

When it comes to managing your spare funds, it’s natural for you to be torn. There have been differing views when it comes to saving and investing. Some think it’s wise to stick to saving, while others think it’s smart to allocate money for investment. There are also others who perceive investments to be the same as savings.

What does it mean to put your funds to save or for investments? Depending on your lifestyle choices, here’s a quick guide with options to better manage your money.

What’s the key difference between savings and investments?

Savings is essentially setting a safety net of funds that can be utilised in the future. This should be a protected amount – cash reserves which you can turn to in the case of a rainy day. If an emergency arises, such as the need to pay off a medical treatment, it’s assuring to know that you have cash reserves to turn to.

And if you are looking to start your own business, you would be looking for cash funds. This is when savings come in handy: leverage on them to kick start your business. Coupled with a monthly instalment loan, you would have a greater pool of funds to support yourself when income flow has not yet stabilised.

On the other hand, investments are funds that offer you potential monetary returns. While stocks like bitcoin and cryptocurrency have been popular options, you can also hold stocks as a shareholder of a potentially booming company or place your funds in a productive property. The key point to note is that investments are potential returns. Your gain from the investment is subjective to many factors such as the company’s financial performance.

Which is the better choice?

Frankly speaking, having a foot in both savings and investments would be ideal. Savings serve as your financial cushion, in times where you need fast cash. To many, it appears to be the safer path for your financial decisions. With that being said, it’s recommended not to discount investments easily. The reason being, investing grows your financial health through your monetary returns. At times, the returns can be larger than the amount you placed in initially.

How do you manage both saving and investing?

Consider looking at your investments and savings in this financial cycle. Allocate a sum from your savings as your investment fund. As your fund grows with investment, you have the option of moving a portion of your returns into savings, and the rest for more investments. In this way, your investment feeds your savings. Furthermore, if you decide to allocate more savings for future investments, your savings also feed greater returns.

The next dilemma you might have is: the appropriate allocation of your earnings for savings and investment. A general rule of thumb to follow is securing three-months’ worth of salary into your savings. You want this safety net to be a sturdy cushion in need of any financial emergencies.

For instance, if you’ve needed to receive a pay cut in the time of this pandemic, you can tap into your savings to support your daily expenses. In this way, wherever possible, a more significant savings fund is always better.


If you can afford it, consider investments while protecting a sufficient amount for savings. Some have also taken calculated investment steps before attaining more funds from licensed moneylenders in Singapore. There is no one hard and fast rule to managing your money; it is dependent on individual lifestyle and financial freedom. If you are considering investing in the local market, properties and stocks have been known to offer lower risks as compared to stocks.

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