Have you been thinking about better ways to save money? What about investing - have you ever considered it? Check out our new Personal Finance 120 video about "Saving and Investing" to learn more about the many options you have!

Transcription: Hi, I'm Carly Cherry and welcome to personal finance 120, information for managing your financial life in less than two minutes. Today, we're going to be discussing saving and investing. Most people are aware of the many options they have, but not all know that it's important to both save and invest. While the two involve different methods, they play an equal role in securing your future. There are two primary purposes for having a savings account. First, everyone should have at least three months of living expenses in their savings account in case they experience a sudden loss of income. You’ll want to have enough in your savings account to cover all of the financially heavy events that you may or may not see coming. Second, a savings account should be used if you're looking to make a large purchase in the near future such as a car or a family vacation. In order to build savings, you have to set goals for yourself or your family. First, you'll need to think of what you and your family want to achieve financially. Make a list of everything from a more reliable car to a family vacation. Once you have your list, it's important to establish the priority of each goal and the timeframe needed to reach your goals. Figure out how much you can afford to put into savings every month and adjust your time frame based on that amount. Aside from saving, investing is also a good way for you to secure your financial future. There are many types of investment options for you. The three most popular investment options are stocks, bonds, and certificates of deposit. Stocks are securities that give you part ownership at a company depending on how many shares of that company you purchase. Stocks would be best to invest in if you want to cash them in later, once they've increased in value for a large purchase. A bond, while not ownership, is like an IOU. You make an investment and receive a specific interest rate to be paid periodically at the date of maturity, or to be reinvested. Bonds can be cashed in and used through things like education. if you plan on using them for education, visit www.IRS.gov to learn more about education savings bond programs and how you may be able to avoid paying interest on your savings bond. Unlike the debt of a bond, a certificate of deposit involves depositing money in the bank and receiving an interest rate and return for allowing them to jus money for a period of time. CDs are best used for things that aren't happening in the immediate future, since there's typically a large penalty for cash from them out early. CDs start at a six month timeline and increase from there. So, say you have money you want to invest for the purchase of a home next year, choose the best interest rate available and put that money away in a one-year CD. At the end of that year your money will be available again and you'll have earned some interest on that amount as well. While saving is something you can start without much research, be sure you fully understand the risks of investing as well as the rewards. Don’t forget to check us out on social media for more videos, articles, and tips to help you with your financial needs. Until next, time I'm Carly Cherry for Cambridge Credit Counseling.