A bank is a safe place for you to keep your money. When you deposit money into an account what you are actually doing is lending your money to the bank. The bank then takes your money and lends it to someone else and when that person gives the money back to the bank, they have to pay interest. The bank then gives some of this interest to you.

Interest

One of the great things about investing your money is something known as interest. By investing your money you receive interest for every day invested.

Here is how interest works: Suppose you have an account and for each week you keep your money in the account you receive $1.00. The $1.00 you receive is called interest.

Saving

Saving is basically the only way to ensure that you can afford to pay for your everyday expenses or even future needs such as your first car. The better you are at saving, the shorter time it will take you to meet your short or long term needs. For most, your every day or weekly expenses usually require you to scrabble for things like movies, CDs, clothes etc. These everyday or weekly expenses can be planned for. All you have to do is determine what you spend your money on each day or week and budget for your savings. This will allow you to determine what you will need to save in the future to ensure that your everyday expenses will be met.

The Smart Shopper

In order to maximize the value of your dollars spent, you should first consider whether you really need the item. For example, there could be alternatives like renting, borrowing from a friend or just deciding that the item is not worth giving up your savings for.

Investments

An investment is a great way to make your money grow even faster. Bonds, Mutual Funds, GIC's and stocks are just some of the things that people invest in. Imagine owning a part or share of your favourite movie theatre chain, television network or video game maker. A share or a stock is a partial ownership of a company and you can own just one, a few, or a whole bunch of shares in a company.

Start Early

The earlier you start to save the less you need to put aside in the future. Suppose you would like to save $5.00 a week over a 5-year period. You would have approximately $1,515.04 based on a 6% return on your investment.
 

Credit Cards

A credit card enables you to get a loan that allows you to spend an amount of money at a store, on almost anything you want, up to whatever your maximum credit card spending limit is set at. At the end of the month, you'll get a bill for the amount you spent. If you pay the whole bill immediately, it will not cost you anything. If you do not pay the card off at the end of the month the bank will charge you interest on the balance outstanding.

Debit Cards

With a debit card you can make an immediate withdrawal from your account to buy anything from groceries to a pair of jeans at a store that accepts it for payment. Unlike a credit card, the money has to be available in your account for the direct payment to be accepted. A direct payment is any amount you transfer from a bank account to pay for something you just bought.

Guaranteed Investment Certificates

Guaranteed Investment Certificates, or GICs, are investments where you agree to invest your money for a certain period of time, and you get a guarantee of how much money you will make. With other investment situations, you do not always know how much you will earn. When you buy a GIC, you have the benefit of knowing what you will earn, but you have to leave your money with the bank for the length of time you agree on. Whether you invest for nine months or three years, GICs are good investments for people who have a short time horizon for when the money is needed.

Mutual Funds

Mutual Funds are different than GICs in that they cannot guarantee how much money you will make. They are good investments because your money is invested in stocks, bonds and other securities. You must also understand that there is a certain amount of risk when you buy mutual funds, because you are not guaranteed an exact amount of money. There is a trade off between risk and return, the higher potential for return the more risk involved. Mutual funds allow investors to choose from a wide variety of investment options including shares, and bonds, at differing levels of risk and growth potential.