Saving vs. Investing

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Saving and investing — they’re both critical to achieving your financial goals. They both require you to put money aside, but for very different purposes.

Saving is ideal for short term goals (vacations or a rainy day fund). Investing is for long-term goals (down payment on a house or retirement).

But if you’re confused by the difference, you’re not alone. Most people in the U.S. don’t save enough, according to think tank Economic Policy Institute. And only half invest, according to a recent report from polling organization Gallup.

Take a look at this video. It will help you understand the difference between saving and investing.

Originally appeared on Learn.Stash.com and written by Jeremy Quittner, the Stash financial writer.