Investing Unit 3: Saving Money to Invest



Are You Satisfied with the Amount You Save?

This unit is designed to help you “find” money to fund your investment plans. We will suggest tools for success, but you have to supply the desire, self-discipline, wise decisions, and good planning to be successful.

Review your financial status by answering these questions:

  • Do I have 3 to 6 months’ income in an emergency fund?
  • Do I save regularly?
  • Do I know how much I need to save to achieve future goals?
  • Do I save to purchase big-ticket items instead of buying on credit?
  • When I use credit, do I save to make as large a down payment as possible?
  • Do I save at least 10% of my personal disposable income?
  • Do I know how much I need to save for retirement?

The more times you answer “yes” to these questions, the more likely you are a prudent saver. A “no” can help you identify areas where you could do better. Once you have a sound savings program in place, you are ready to invest surplus funds. Unfortunately, many people feel their savings are not sufficient, and they see no way to meet their immediate needs and have extra funds to invest.

Through this unit of study, you will explore strategies that will help you:

  1. Identify ways to increase your savings
  2. Fund your savings program
  3. Accumulate funds to begin your investment program.

It doesn’t take a lot of money to start investing. Unit 8, Investing With Small Dollar Amounts, provides examples of investments that require as little as $25 for a U.S. savings bond or $250, $500, or $1,000 to open a mutual fund account, depending on account requirements.