Life or Debt: Tips on Saving and Investing

What is Saving?

• Saving is the amount of money you put aside for future use and can only be achieved when you spend less than you earn. It is usually put aside temporarily for short term use. To make saving easier, deposit into your savings acount using automatic payroll deductions.

What is Investing?

• Investing is the use of your savings to earn a financial gain. The objective with investments is to earn money with money. Investing begins when savings are "permanent" rather than temporary.

Saving Tips for Teens

• Pay attention to your minutes and texts
• Start saving early and often
• Pack your own lunch - it's cheaper
• Educate yourself about saving and investing
• Form an investment club at your school and, as a group, learn how to save.

Start Saving Early for the Future

• Use the internet and financial institutions to determine the following:How do I get Started? How much money should I invest? What should I invest in? What is the risk?

The Difference between Saving and Investing

• Saving: Readily accesible, Preserve the principal, No penalty for withdrawal, Used to meet short term goals and emergencies, Lower rate of return on Pricipal, Federally insured by FDIC

Continued

• Investing: Not readily accesible, Principal is at risk, Penalty for early withdrawal, Used to meet long term goals, Higher rate of return on principal, Higher Risk, Not federally insured by FDIC

Investment Practice

• Try this: Create a fantasy account of $5,000 and track different investments for a year. This is a great way to learn how investments work without any financial risk on your end. Get your parents or a few friends involved in the fantasy account so that you can all learn from each other about the world of business and finance.