Recently, I worked with a client that a while ago came to me ready to move on from her small apartment where she'd been living for over a decade. Her rent kept on going up and she always wanted a place of her own. But honestly, she was overwhelmed by all the what-ifs. She's single. What if she couldn't afford a home all by herself? She still had some debt. What if she didn't get approved for a loan? What if she couldn't save enough money for the 20 per cent down payment? Ultimately, I wanted to help her see that she could turn all of those what-ifs into what's possible by taking a step back and approaching her accumulation goal step by step, whether it's building up enough money to buy a home, growing your emergency fund, retiring someday or sending your kid to college. You likely have a few different accumulation goals that are on your radar. In this video, we're going to lay the foundation for how you can approach different accumulation goals. That's going to include how you define your goals, how you prioritize your goals, and then whether or not saving or investing is a better fit for making progress towards your goals. You might be tempted just to jump right in and get started saving money for the future, but before you dive in head first, you should start with "why". Ask yourself, why is saving money important? What exactly am I saving for? Is it a short term goal or a long term goal? Another way to think about something that's years away or someday or something that's right around the corner. If you haven't started, what's keeping you from making saving money a practice that you take on right now? Once you've decided what you're saving for, how do you make it happen? The next critical step is to develop a plan to build up that savings. It's important to pinpoint what that actual goal amount is and a timeline for when you want to achieve that goal. For example, if you need to save $1,200 in 12 months, saving $100 a month will get you there. Just like any healthy habit, if you have a goal of eating, let's say, three servings of vegetables a day or exercising three times a week, you're going to want to approach your financial fitness the same way. That's where the specific savings goal of how much you want to stash away in a certain period of time. Earlier, after some careful thought along the way, she gave herself the goal of saving up for a down payment for her new house over the course of the next three years. She realized to reach the goal of saving up $50,000, she'd have to stash away about 1,400 bucks a month. So thinking that through, she figured out what her goal amount would be, her timeline, and how much she'd need to save each and every month. The final decision that she had to make was what to do with that money as it grew between now and when she actually needed it for her down payment. Should she use the savings account or invest it? Savings boils down to building up cash in a savings account, hopefully, one that pays some sort of interest, where investing is about taking your money and investing it in mutual funds, ETFs, stocks or bonds, in the hope that it's going to grow. The biggest difference between saving and investing comes down to risk. Investment accounts hold the potential for higher returns, but they also have the potential for major fluctuations. So thinking about that decision between saving and investing is based on when you're going to need the money and how comfortable you are with risk. Generally, if you're going to need the money within the next 3-5 years, it should be saved, not invested. But if you don't need it for at least five years and you're comfortable taking on some risk, investing could be a better choice. The last thing I'll mention is that it's important to balance your accumulation goals with any debt pay down goals if you do have them. So think about if you have any high-interest debt, it may make sense to put more towards your debt and less towards your saving and investing goals until you get your high-interest debt wiped out. It also might not be an all or nothing type of things. So working towards a saving goal, an investing goal, and debt pay down goal at the same time might work out really well for you. But you should also just keep in mind that you want to include debt pay down in the mix, especially if you have high-interest debt. Making progress requires discipline, determination, a little strategy and a plan from beginning to end, and, of course, time. But in the long run, making progress in your accumulation goals is not as much of a financial diet as it is a daily financial habit or lifestyle. So going back to that client I talked about, the reason I talked to her recently. I'm happy to report that her persistence ultimately paid off. The last time we talked, she reached out to a Realtor and she had saved up enough money for a down payment. Now it's no more, what if, but it's truly she gets to see what's next and begin the house-hunting process.