If you’ve ever wondered whether you should be saving more or investing more, you’re not alone. These two terms come up all the time in conversations about money. While they’re closely related, they’re not the same thing.

Both saving and investing play an important role in your financial well-being. Knowing how they work – and when to use each – can help you feel more confident about the way you manage your money. It’s not about picking one over the other. It’s about using both, in the right ways, to support your goals now and in the future.

Saving: Your financial safety net

Saving is about feeling secure. It means setting money aside in a safe, accessible place so it’s there when life happens – whether that’s something planned or unexpected.

Savings are typically used for:

• Emergency expenses
• Car repairs or home maintenance
• Medical bills
• Short-term goals like a vacation or upcoming event

Because savings accounts are designed to keep your money stable and accessible, they’re generally lower risk. You won’t see dramatic growth, but you also don’t have to worry about sudden losses. The purpose of saving is to make sure you have money available when life happens.

Many people aim to build an emergency fund that can cover several months of essential expenses. Having savings set aside for unexpected situations can help reduce stress and make it easier to handle financial surprises without relying on credit cards or loans.

Common types of savings accounts

There’s no one-size-fits-all way to save. Different tools can help you reach different goals – and many people use a mix. Here are a few options to consider:

• Savings Accounts: Designed for everyday saving with easy access to your money.
• Money Market Savings Accounts: A combination of Savings and Checking accounts that generally earn a higher rate than a standard savings account, depending on your balance.
• Certificates: Typically earn higher dividends in exchange for leaving money deposited for a set period of time.

 Each account type has a different balance of access and earning potential.The right mix depends on your timeline, goals, and how you plan to use your savings.

Investing: Planning for long-term growth*

When you're thinking years down the road – not just months – investing can be a smart way to help your money grow. Instead of keeping funds in cash, investing means putting your money into things like stocks, bonds, or mutual funds that have the potential to increase in value over time.

Investing is often associated with long-term goals such as:

• Retirement
• Future education expenses
• Long-range financial milestones

Unlike savings, investments can go up and down in value. That’s why they’re typically best for money you won’t need right away. Giving investments time – often years or decades – can help smooth out short-term market changes and support long-term growth.

Common types of investment accounts

When you’re ready to start investing, it helps to begin with a few well-known options. These accounts are designed to support long-term goals – not everyday spending – and each offers its own benefits:

• 401(k) plans: Offered through your employer, these retirement accounts let you invest a portion of your paycheck automatically.
• IRAs (Traditional or Roth): Retirement accounts designed for long-term investing outside of an employer plan.
• Investment accounts with mutual funds: These accounts invest in professionally managed funds, giving you built-in diversification without needing to pick individual stocks.

Each of these accounts is meant to help your money grow over time – whether you're planning for retirement, education, or another future milestone. Please consult with a professional to determine what investment accounts might be best for you.*

Do you have to choose one or the other?

A common misconception is that you have to choose between saving or investing. In reality, they often work best together.

It may not make sense to invest money you’ll need next month, but relying only on savings can make it harder to prepare for goals that are years or decades away. Many people find that using both strategies helps them feel more balanced and prepared.

Saving can provide peace of mind today, while investing can help support the future you’re working toward.

Bringing it all together

Saving and investing aren’t competing strategies; they’re complementary tools that serve different purposes. Saving can help you handle life’s short-term needs and surprises, while investing is designed to support long-term goals that take time to build. Understanding how each works can help you feel more confident and in control of your overall financial picture.

Building financial knowledge is a process, and learning the basics is an important step toward a more secure future.

* Chevron Federal Credit Union does not provide investment, tax, or retirement advice. Please consult a qualified financial professional for guidance specific to your situation.