When it comes to managing money, the terms “saving” and “investing” get tossed around a lot—sometimes even used interchangeably. But they aren’t the same thing. In fact, they serve very different purposes in your financial life. If you only save and never invest, you may find your money isn’t growing fast enough. On the flip side, if you only invest and never save, you might find yourself in trouble when an emergency hits. The key is understanding what each is for, how they work, and why a smart financial strategy usually includes both.

Saving is all about safety and access. It’s the money you set aside for short-term goals and emergencies. This could be your rainy-day fund, your vacation money, or the cash you keep on hand just in case your car suddenly needs new brakes. The goal of saving is to protect your money and keep it available when you need it. Because of this, savings are usually stored in low-risk places like savings accounts, money market accounts, or certificates of deposit (CDs). These accounts earn some interest, but the growth is slow—and that’s okay. The point isn’t to make a fortune; it’s to have stability and peace of mind.

Investing, on the other hand, is about growth. It’s a long-term strategy where you put your money into things like stocks, bonds, real estate, or mutual funds with the hope that over time, it will grow in value. Unlike saving, investing involves risk. The value of your investments can go up and down, and there’s no guarantee you’ll make money. But over the long haul, investing tends to yield higher returns than saving. This is how people build wealth, save for retirement, or fund big future goals.

So, how do you know when to save and when to invest? It depends on your timeline and your comfort with risk. If you’re planning to use the money soon—say, within the next couple of years—it’s usually better to save. That way, your money will be there when you need it, no matter what the market is doing. If you’re thinking ten, twenty, or thirty years down the road, investing can make more sense. That long timeline gives your money more time to grow and more room to recover from any bumps along the way.

There’s also an emotional side to this. Saving feels good because it gives you security. You know the money is there, ready if something unexpected happens. Investing, though, requires a bit more faith. Markets go through ups and downs, and it can be nerve-wracking to see your balance drop during a downturn. But those who stick with it through the ups and downs often come out ahead.

The real magic happens when saving and investing work together. Your savings provide a safety net so that you don’t have to dip into your investments every time life throws you a curveball. This protects your investments, allowing them to stay put and grow over time. Meanwhile, your investments help your wealth grow faster than savings alone ever could.

A good starting point for most people is to build an emergency fund—typically three to six months’ worth of living expenses—in a savings account. This way, you’re prepared for unexpected expenses like medical bills, car repairs, or job loss. Once that foundation is in place, you can start focusing on investing for long-term goals like retirement, buying a home, or funding a child’s education.

And while it’s true that investing involves risk, not investing comes with risks too—just of a different kind. If you only save and never invest, your money might not grow fast enough to keep up with inflation. Over time, inflation eats away at your buying power. Something that costs $100 today might cost $120 in a few years. If your savings are only earning a tiny bit of interest, you could actually be losing money in real terms.

It’s also worth noting that you don’t have to be rich to start investing. Thanks to technology, there are plenty of apps and platforms that let you invest with just a few dollars at a time. The important part is to start, even if it’s small. The earlier you begin, the more time your money has to grow. That’s the power of compound interest—when your earnings start to earn their own earnings.

In the end, saving and investing aren’t rivals. They’re teammates. Each plays a crucial role in your financial health. Saving keeps you steady and secure; investing helps you grow and reach bigger goals. If you rely too much on one and ignore the other, your financial plan might fall short. But with both in play, you’re better prepared for the short-term bumps and long-term dreams that life throws your way.

So yes, be proud of your savings account—but don’t stop there. Once you’ve built a solid base, start exploring how investing can help you build a future. With a balanced approach, you don’t just protect what you have—you build on it.