Putting something aside every month is a foundation for sound money management and for growing future wealth. But many people get confused around the differences between saving and investing.

A big issue which affects savings is inflation. During the past decade or so, this is an economic problem that seemed to have largely gone away. Particularly in the UK or US. Inflation means rising prices, which put another way means the value or spending power of your money falls over time. If you can get 1% interest on your savings but inflation is running at 5% then in real terms, your money is shrinking at 4% per year.

The purpose of investing is to increase your wealth. You are buying an asset of some kind, which will either give a regular return or increase in value over time (sometimes both). For the inexperienced investor, buying a stock market based investment which tracks the movement of the index is a straightforward option. Exchange traded funds or ETFs are available for whole markets such as the FTSE100, or S&P500, or specific sectors such as banks, green energy or cannabis producers. These can be purchased through many banks or you can open a Stocks and Shares ISA via an investment company. These are UK specific but in other countries there are similar. The advantage with an ISA is that any gains you receive are tax free.

Build a safety net through savings and low risk investments then consider your investment strategy based on your long term goals and attitude to risk. Look at ways to simplify and automate the process via apps or direct debits to take the decision making and risk of financial apathy from the table.