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February 13, 2025
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From Paycheque to Prosperity: How Smart Saving and Investing go Hand-in-Hand

Managing your money is one of the most critical skills you’ll need to achieve financial freedom. And while it may be tempting to simply live from paycheque to paycheque, developing good financial habits is the only way to really make your money work for you. Two of the most important pillars of good financial planning are saving and investing, but these two principles don’t necessarily have to be mutually exclusive. By thinking of your investment decisions as part of your broader savings plan, you can obtain single-minded focus on what you envision for your future.
World Savings Day (31 October), which was established in 1924, serves as an annual reminder to check in on whether your savings goals are on track. It offers a chance to reassess your financial strategy and make adjustments if needed to ensure you’re building towards a secure future. Without a clear plan, it’s easy to fall into debt, overspend, or miss out on opportunities to grow your wealth.
Saving and investing: a power combo
The best way to approach saving is to think of it as an expense when you formulate your monthly budget. Doing this will allow you to shift your mindset to thinking of saving as a non-negotiable financial commitment, just like paying rent or utility bills. To stick to their monthly saving commitment, some people even choose to set up an automatic money transfer into a dedicated savings account at the beginning of each month.
Generally speaking, saving is about setting money aside to meet short-term needs or emergencies. Contrastingly, investment is often seen as a way to grow your wealth over the long term. People often think of saving and investing as two different tickboxes in their financial plan, when really, combining the two can create a robust financial strategy that balances security with growth potential.
Commenting on this is Roger Eskinazi, Managing Partner at Tickmill who says that saving diligently is one of the most effective ways to build a solid financial foundation. One of the key differences between saving and investing is that saving gives you immediate access to funds, whereas investment profits take longer to realise and are often reinvested.
“The best way to think about how saving and investing works together is to think of saving as a safety net that provides you with the liquidity you need to tend to unexpected expenses, without touching your investment capital.
Without a proper savings buffer, you may find yourself having to sell investments prematurely to cover an emergency, which could mean losses or missed opportunities for growth. A strong savings base gives you the flexibility to invest without putting yourself at financial risk,” says Eskinazi.
Perfecting the balance
The catch is that while saving provides access to funds, it offers minimal growth due to typically low interest rates, compared to the growth potential of invested funds. Investments such as stocks, bonds, mutual funds, and real estate have historically provided higher returns than savings accounts, allowing your wealth to compound and grow.
In a sense, savings speaks to an immediate sense of gratification and security, whereas the best way to invest is to have a longer time horizon, which is what compound interest needs in order to accumulate and grow.
In all cases, becoming a diligent and consistent saver is the first step to building wealth, and by investing you can build on that foundation. By investing part of your savings, you give yourself the opportunity to combat inflation and increase your purchasing power over the long term.
However, it’s important to remember that because investing offers relatively higher rewards, it also comes with a higher degree of risk. Unlike savings accounts, which are generally safe, investments like stocks are subject to market fluctuations and may lose value in the short-term. If you are patient enough and can make strategic decisions in times of volatility however, investments tend to recover from short-term losses and in the long-term, grow beyond what a savings account can provide.
“At the end of the day, it’s about creating a balance between safeguarding your present and securing your future. By integrating saving and investing into your financial plan, you’re building both stability and long-term growth potential,” says Eskinazi. “The key is to start where you are and remain consistent. Over time, even small contributions can add up to significant financial security.”

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