Is it better to save or invest?

Wondering where to start.

Start with saving. Investing should follow ASAP if not at the same time.

1 Analyze your finances.

• Makes sure you've got more coming in than going out.

2 Income - Expenses = Savings.

• Store your savings in an high yield deposit account (HYDA). If you don't already have one, I'd suggest you start with DCU (Digital Credit Union).

3 Open a Roth IRA.

• Vanguard is excellent for beginners. If you don't know what to invest in, start with an index fund. Their account reps are super helpful and patient with beginners.

4 Split savings between the HYDA and the Roth IRA until your savings are at least 3 months of living expenses. More if you like but at least 3.

5 Once you have enough in savings, continue to contribute to your Roth IRA.

Hope this helps!

If you want your savings to grow faster than just a savings account it is better to invest in Mutual Funds. They are less risky than to invest in the Stock Market directly and managed by a Financial expert. Fidelity Investments has a good number of mutual funds you can choose from.

Start with saving, then once you have an emergency fund in place then move to investing.

Start with savings and build that up. Then look into investing. I recommend Acorns or Robin for investing.

Mutual funds are great investments too

To invest you need to save a little and grow that savings to make your money work for you when you invest. Some starters to invest is with Acorns, Stash and other investment apps are a good way to begin investing.

In my opinion save but save to invest. Meaning, save so you can prepare for emergencies but once you get the opportunity, invest a little. I just got finished reading an article on the website discussing investing in retirement through a 401k and how beneficial it is to utilize the company match if the company offers that. Its free money!

Save enough for an emergency fund and then invest

Start with saving. Investing should follow ASAP if not at the same time.

1 Analyze your finances.

• Makes sure you've got more coming in than going out.

2 Income - Expenses = Savings.

• Store your savings in an high yield deposit account (HYDA). If you don't already have one, I'd suggest you start with DCU (Digital Credit Union).

3 Open a Roth IRA.

• Vanguard is excellent for beginners. If you don't know what to invest in, start with an index fund. Their account reps are super helpful and patient with beginners.

4 Split savings between the HYDA and the Roth IRA until your savings are at least 3 months of living expenses. More if you like but at least 3.

5 Once you have enough in savings, continue to contribute to your Roth IRA.

Hope this helps!

This is the exact advice I would give. There is a whole community of bloggers to help you in the Financial Independence Retire Early (FIRE) world :)

Good advice James.

Why Roth and not the Traditional IRA?

I'm doing both…….saving and investing at the same time so I know for sure I'm making money either way.

I do both!

I do both saving and investment.

I agree with saving enough for an emergency fund and then investing.

Saving for an emergency fund is a must. However, saying you should save for an emergency fund before investing may not be the best advice. For example, an emergency fund should have 6 months of living expenses available in case of an emergency. Saving 6 months of living expenses will take a considerable amount of time especially if you are new to saving and learning this stuff for the first time or simply just starting. For argument sake, let's say you are saving for an emergency fund and have built enough savings to get you through 2 months of living expenses. In this argument, how long did it take to build 2 months of emergency funds? 2 months? 4 months? A year? This is important to consider especially sense having 6 months of emergency funds does not mean that you need to pull all of it out once an emergency happens. You take out what you need only. If something happened where you would need to pull out the entire amount then that would mean, theoretically, you don't have 6 months worth of living expenses available.
Investing for an emergency fund may be a better route and a more practical approach. Think of investing as different sources of income. And there are ways to invest your money that do not incur risk such as certificates of deposits.
If you are wanting to invest, the best thing to do is learn about investing. If you take somebodies advice in where to put your money to invest, then you are doomed. If you don't feel confident in a investment, then don't do it. Go to school or do independent research, which is "investing in yourself", and know about what you are going to do with your money and not rely on others.

I invest with Acorns and Stash.

Thanks for the advice and suggestions. I'm going to try to use it towards my savings/investing.

Step 1: $1000 Emergency Fund
Step 2: Take employer retirement match if available
Step 3: Pay off debt above 5% interest (or all debt if you prefer, it is nice not having any debt but the mortgage)
Step 4: 3-6 months of expenses in Emergency Fund (probably 6 giving current economy)
Step 5: Invest

Just follow James H advice, it’s great! Also read Dave Ramsey books. Great psychological and behavioral concepts to really maximize your financial decisions.

set an obtainable goal

I would also consider buying a small amount of cryptocurrency. PayPal will let you buy at a modest fee.

I'm thinking in terms of $20 every now and then. Personally I like Litecoin and Bitcoin cash but they also sell regular Bitcoin and another.

Currently you can't use it through PayPay for anything except storing value. But you also don't have to worry about being permanently separated from your funds because your hard drive died or you forgot your password.

For emergency money or something of that nature, savings is probably best, but for growth investing is better. If you want to start small, Cash App has a stock investing platform that makes it easy to get your feet wet/learn as you go.

I say go to PayPal and buy a little cryptocurrency and you can do both saving and investing at the same time.

Granted in the short term it drops lately time to buy! but long term it will be around even after Congress kills off the US dollar with stupid spending practices.