When it comes to how to save money, it’s easy to think that saving and investing are the same thing, but they each serve a different purpose. Each plays a distinct role in helping you achieve your financial goals. Understanding how they work together can make a major difference in achieving your short and long-term financial goals. 

In this guide, you’ll learn the differences between saving and investing, how to use both effectively and why they’re essential for your financial well-being. Plus, discover how our Mainstreet and Aviso Wealth Advisors are here to support you throughout your entire saving and investing journey with high-quality personalized advice and flexible solutions to help you save with confidence.

What Is Saving? 

Saving means setting aside money in a safe and accessible place for when you need it. You’ll rely on your savings for short-term goals, emergencies, or unexpected expenses. Before you start investing, it’s essential to establish a strong savings foundation. Saving gives you peace of mind and financial security so you can invest confidently later. If you’re wondering how to save money effectively, starting with a dedicated savings account is the first step.

Key Features of Saving

  • High Liquidity: A savings account gives you quick access to funds, which makes it ideal for emergencies or upcoming purchases. Just remember, GICs are less flexible unless they are cashable or redeemable.  
  • Lower Returns: Because saving is low risk, the potential return is also modest. In most cases, interest earned on savings doesn’t keep pace with inflation,  though some GICs may keep pace with inflation, depending on their interest rate.  
  • Short-Term Focus: Saving works best for goals you’ll need money for soon (in 1 to 3 years), such as an emergency fund, a vacation, or a home down payment.

Common Saving Vehicles

  1. Regular Savings Accounts: Easy to open and access at most Canadian banks or credit unions. 
  1. High-Interest Savings Accounts (HISAs): These accounts offer higher rates than regular accounts, though they may have withdrawal limits or transaction fees. 
  1. Guaranteed Investment Certificates (GICs): Provide a fixed rate of return over a set term. Longer-term GICs often offer higher rates, but the funds are locked in until maturity unless you choose cashable or redeemable GICs.

Why Saving Is Essential

Even though returns are modest, saving is the foundation of any financial plan. Here’s why: 

  • You Need Liquidity: Emergencies happen, and you may need access to cash without selling investments at a loss. 
  • You Want Stability: When your goal is less than a few years away, keeping the money safe matters more than chasing returns. 
  • You Build Good Habits: Saving regularly creates financial habits that last a lifetime. 
  • You Establish a Base: A solid savings cushion gives you confidence to start investing without fearing short-term shocks. 

If you’re wondering how to save money effectively, a Mainstreet and Aviso Wealth Advisor can help you create a plan that fits your life. Our advisors will work with you to build a investment plan, help you reach your savings goal and guide you on the path to investing.

What Is Investing?

Investing means putting your money into assets like stocks, bonds, exchange-traded funds (ETFs), and mutual funds, to grow your wealth over time. Unlike saving, investing involves market risk but potentially offers a much higher return over the long term. If you’ve ever wondered about the difference between saving and investing, saving protects your money while investing helps it grow.

Key Features of Investing

  • Higher Potential Returns (and Higher Risk): When you invest, values can fluctuate, but over the long term, they tend to grow faster than in a savings account. 
  • Longer Time Horizon: Investing works best when you give it time. Remember, time in the market often beats timing the market. Staying invested for several years allows time to recover from any market downturns and benefit from compounding. 
  • Inflation Protection: Savings accounts often lose ground to inflation, but investing can help your money grow faster than inflation over the long term, preserving your purchasing power.

Popular Investment Options

  • Mutual Funds: Professionally managed portfolios that pool money from many investors.  
  • Stocks and ETFs: Represent ownership in companies or a basket of companies. 
  • Bonds: Fixed-income investments that pay regular interest and return your principal at maturity.

Investing Accounts

Investors typically hold investments through these main account types: 

Why Investing Is Important

Saving alone rarely builds enough wealth for big goals like retirement. That’s where investing comes in; it gives your money the chance to grow meaningfully over time. 

  • It helps you to reach long-term goals like retirement or education. 
  • You benefit from compounding, where your investment earnings generate more earnings. 
  • With time and diversification, you can reduce overall risk while maintaining higher growth potential. 

If you’re ready to start investing, our Mainstreet and Aviso Wealth Advisors are here to support you in reaching your investment goals. Our advisors can help you find the right investment options, accounts and align them with your timeframe and goals.

Saving vs. Investing: A Side-by-Side Comparison

Feature SavingInvesting 
Risk Very low; principal is usually safe Moderate to high; value fluctuates 
Return Low; may not keep up with inflation Potentially higher; can grow significantly over time 
Time Horizon Short-term (1-3 years) Medium to long-term (3+ years) 
Liquidity High; easy access  Varies by product 
Purpose safety and short-term goals Build wealth and reach long-term goals 
Example Products Savings accounts, HSAs, GICs Stocks, ETFs, mutual funds, bonds 
Inflation Protection Limited Better protection over time. 

This comparison shows that saving vs investing are not rivals; they’re actually complementary tools for different financial purposes. Both are important in your financial journey.

Why You Need Both

You might wonder why you need both. The truth is, savings vs investing isn’t about choosing one or the other; it’s about using them together. Saving ensures security with quick access to cash, while investing focuses on long-term growth. 

Your savings should cover short-term goals and an emergency fund (typically 3-6 months of expenses) to protect you from unexpected expenses or job loss. It’s a crucial step to your financial foundation.  

Long-term goals like retirement or funding your children’s education call for investing. Long-term market growth has historically outperformed saving rates and helps you build substantial wealth over time. 

Combining saving and investing creates a well-rounded financial plan. Your savings provide stability and liquidity, while investments provide growth for future goals. Having both will give you confidence to succeed and stay on track with your goals, even during market downturns. 

If you’re unsure whether to save or invest, our Mainstreet and Aviso Wealth Advisors will guide you in a way that fits your goals.

How to Combine Saving and Investing

Wondering how to save money while still investing for the future? Here is a simple step-by-step approach.

1. Define Your Goals and Timelines:

Ask yourself: What am I saving or investing for, and when will I need the money? 

  • Under 3 years: Saving goal (vacation, car, wedding, home down payment). 
  • 3 to 10 years: Consider moderate-risk investing (balanced or conservative portfolio). 
  • Over 10 years: Long-term investing (growth-oriented portfolio). 

2. Build Your Emergency Fund 

The next step is to set up a separate high-interest savings account for your emergency fund. For seamless transfers and regular contributions to your account, automate transfers every payday.

3. Make Use of Registered Accounts

Leverage investment accounts such as a TFSA, FHSA, RRSP or RESP to maximize your growth potential and take advantage of what each investment account has to offer.

4. Match Risk to Timeline

Choose your investment mix based on how soon you’ll need the money. 

  • Short-term (less than 3 years): Stick to savings, HISAs, or GICs. 
  • Medium-term (3–10 years): Consider balanced or conservative portfolios (ETFs or mutual funds with a mix of stocks and bonds). 
  • Long-term (10+ years): Growth-focused portfolios (higher equity exposure, diversified globally).

5. Automate and Stay Consistent

Set up automatic contributions to both savings and investment accounts. The “pay yourself first” strategy removes emotion from financial decisions and builds wealth consistently.

6. Review Regularly

Check your savings and investment balances at least once a year. Make adjustments if your goals or risk tolerance change.

Common Mistakes to Avoid

  1. Saving Only: While saving feels safe, it rarely builds enough wealth to meet big goals. 
  2. Skipping an Emergency Fund: Don’t invest everything. If an unexpected expense hits, you may be forced to sell investments at a bad time.  
  3. Using the Wrong Account: Always match your account to your goal and timeline.  
  4. Ignoring Inflation: Low-interest savings accounts often don’t keep up with inflation.  
  5. Not Reviewing Your Plan: Markets change, interest rates shift, and life circumstances evolve. Failing to review your strategy can lead to missed opportunities or unnecessary risk.

How to Balance Saving and Investing by Life Stage

Your balance between saving vs investing will naturally shift as you age and your priorities change.  

  • 20s: Build your emergency fund first, then start investing early. Time and compounding work best when you start early. 
  • 30s: Start contributing more to your investments while maintaining your short-term savings.  
  • 40s and 50s: Continue to invest for growth but diversify and optimize. However, don’t forget about risk reduction as retirement nears. 
  • 60s and beyond: Focus on preserving your investments with a more conservative approach. The goal is to maintain your wealth, ensuring a reliable income in retirement. 

Not sure where to start? Our wealth advisors are here to help. They’ll understand your needs, goals and timeframe to create a plan that fits your life stage.

Why “Saving vs. Investing” Is the Wrong Question

Saving vs investing are not competitors. Saving protects what you already have, while investing helps you build more over time. Together, they provide both security and growth. 

It’s not about choosing one over the other; it’s about knowing when and how to use each.

When you combine saving and investing, you create a strong financial foundation that lets you handle life’s surprises while steadily moving toward your long-term goals.  

If you’re wondering how to save money confidently, a Mainstreet and Aviso Wealth Advisor is here to help. Our team will offer personalized advice and flexible solutions so you can save confidently and reach your goals. 

Book an appointment today and start building your financial future with a plan that balances saving and investing.

Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc. Online brokerage services are offered through Qtrade Direct Investing, a division of Aviso Financial Inc. The information contained in this article was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This material is for informational and educational purposes and it is not intended to provide specific advice including, without limitation, investment, financial, tax, or similar matters. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing.  Unless otherwise stated, mutual funds, other securities and cash balances are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer that insures deposits in credit unions. Mutual funds and other securities are not guaranteed, their values change frequently and past performance may not be repeated.