when should you start saving instead of investing

When should you starting saving instead of investing?

Most people need to save and invest, but knowing which is a priority now can be a challenge.

Here are some hints that can help.

You need to save when:

• You don't have enough cash saved to cover 3-6 months of living expenses.

  This cash on hand helps you navigate through unexpected financial challenges such as job loss, injuries, and other emergencies.

• You are targeting a short-term financial goal.

  If you want to buy a home or pay for a wedding shortly. Investing is risky when the timeline is short.

You're ready to invest when:

• You can afford to keep the money invested. Investing requires a minimum timeline of about five years.

  This is because the stock market can be volatile in shorter time frames.

  If you need the money, you may have to sell your stocks just as share prices take a temporary dip.

  That's a situation to avoid.

• Invest if you are preparing for retirement. Investing is ideal for long-term financial goals like retirement.

  A longer timeline insulates you from short-term volatility. It also gives you the opportunity to practice buy-and-hold investing.

• This is the investment practice of buying quality stocks or funds and letting them appreciate for decades. It's the simplest way to make money in the stock market.

  With a solid budget, you can also save and invest at the same time.

  How much you should save versus invest depends on your situation.