Saving vs Investing vs Spending: Find the Right Balance

The nightmare that was 2020 has passed and it is time to actively reflect on our financial goals for this year. Yes, the past year has passed on ordering take out, online shopping and binge watching on entertainment streaming services.

Needless to say, spending has taken precedence in 2020. But now is the time to find the right balance between saving, investing and spending. 

If we were to describe the difference between saving, investing and spending in a nutshell, we’d say each is a way to not only spend our income but also grow our income.

Wondering how? Our spends are generally for things we want, to want those things we need to save up and to save up, we must invest that income. So far? Let’s make this simpler and understand each concept, one at a time.



Let’s start with savings. There are different ways to save your money the simplest way is to let it sit in your bank account and let it build over time. But with today’s savings account interest rates offered by banks, your savings will build up at a tediously slow pace. 

Additionally, your savings are not going to be able to keep up with the rapidly increasing prices. Most banks offer several ways to save money like fixed deposits, term deposits and recurring deposits. 

These tools can actually help you make disciplined savings especially if you instruct your bank to auto deduct the amount each month.

You can also save money by tracking your expenses, planning your goals, cutting costs by cutting down on impulse purchases and managing your budgets better. But managing your expenses and setting up a savings account will only get you so far. 

A great way to save and build your money is through investments. But before we cover investments, let’s understand spendings.



Spending money can be interpreted in many ways, spending money can help you buy what you want but it can also help you save your money. For instance, spending money on motor insurance can help you save money in case of an accident. 

The same stands true for health insurance. Spending money on the new PlayStation 5 is just that spending money. 

But let’s say you’re spending money to buy supplies for your business. That’s spending money to make money. 

It’s a well planned expense which will eventually help you grow your income. Speaking of growing your income, let’s understand how spending is different from investments.



Spending money is not necessarily done with the goal of receiving a return. But investments always have the goal of either saving your money or growing your money. 

In today’s financial market, potential investors have access to several investment instruments like stocks, Real Estate, and cryptocurrency etc. 

These investments can help you save money by reducing your income tax burden and can help you grow money by giving you returns after a certain period.

Now that you have a fair idea of what are savings, spendings and investments, let’s look at understanding how you can go about getting started on each of them.

Save, Invest then Spend

Every person has a different appetite for savings, spendings and investments. This is usually dependent on how much money they make, their age and their financial goals. 

Let’s say you’re a student. Most of your income comes from a parent or a guardian and in the odd case, a part time job. But that income is usually used for expenses like food and entertainment. 

As you grow older, you transition into being a professional and start making your own money. At this stage you’re usually advised by your parents or anyone in a senior position to start saving actively. 

This means you open up a savings account and might even experiment with deposit schemes. As your income grows, you automatically start considering where you can invest your money. At this stage, you need investment options that will help your wealth grow. 

This means investing in stocks, Cryptocurrency, Real Estate and other market securities that will help you accumulate enough wealth to meet your financial goals.

These financial goals could include larger purchases like a home or a car or even a holiday to different countries of your choice. The wealth accumulated from your investments can also be used to fund further education, your wedding or your own business. 

All in all, savings, spendings and investments are inversely related to each other. They are a part of your financial life cycle and the state of each determines your financial health.

Choosing the right investment is very important, you wouldn’t want to invest your hard earned money on some investments you know nothing about. 

Please do take your time to make research about any investment you decided to invest your money in because there are fraud out there clamming what they are not, just only to look for people with little or no knowledge about investment and taking advantage of their ignorance and take their money, it is very common today. Please take note and be careful.

I always advise, seek help from expert on areas you are not clear on, we can help you with good investments and help you make good use of your money.

Don’t let expenses cut a hole in your pocket


Whether you are a student or a professional, your financial cycle of savings, spendings and investments has to start somewhere each element leads to the other. A great way to start saving is to budget your expenses.

Savings, alone cannot constitute the increase in wealth, because it can only accumulate funds. There must be the mobilization of savings, i.e. to put the savings into productive uses. 

There are a number of ways of channelizing savings; one of them is an investment, where you can find unlimited options to invest your earnings. Although risk and returns are always associated with it, when there is no risk, there is no return.

The stepping stone of wealth formation is savings, which is decided by a person’s level of income. The higher the income of a person, the higher is his capacity to save, because the rise in income increases the propensity to save and decreases the propensity to consume. 

It can also be said that it is not a person’s ability to save that encourages him to save money, but the willingness to save forces him to do so.

In other words, investing is just one kind of saving. Whenever you put something aside, regardless of your hopes for the future, you’re saving. When you put something aside with the hopes that it will somehow provide a bonus to you after you set it aside, you’re investing.


If you have been wondering why you have still not been able to building wealthy, you should ask yourself if you have been saving enough, if you have been putting your experience in check and if you have been making investments. Try this today and start seen changes in your financial life.

The issue of finance is one part of life that is yet to be revolutionalize, most people keep finding themselves in the same financial circle over the years.

In life there are four (4) kinds of people who manage wealth in different ways, not as they please but as their capacity can will. We have the following kinds of people in life…

1. The multipliers (investors)

This set of individuals once any money enters their hand, what they do is look for ways to make their money work for them which is investing.

2. The Savers

This are the set of people once money comes to hand all they think is saving the money for the future Instead of investmenting.

3. The Spenders

They are the ones who spends whatever money that comes to hand without any investment or even savings.

4. The Borrowers

This set of people are the ones always looking for a place to borrow, no matter what comes to hand by the end of the month it is never enough, they are always looking for places to borrow.

If you find yourself in any of these categories please do well to evaluate yourself before making any decisions because those who rule the world today are thinkers and not those who work hard.

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