Saving involves setting aside money that you presently don't spend, whether for unexpected expenses or future purchases. It's about having funds readily accessible, with minimal risk and tax implications. Financial institutions provide various saving avenues to cater to different preferences and needs.

Investing, on the other hand, entails purchasing assets like stocks, bonds, mutual funds, or real estate, with the anticipation of generating returns. Typically, investments are chosen with long-term objectives in mind, categorized broadly into income or growth investments.

While the concept of saving may vary among individuals, economists view it as the act of reducing present consumption to enhance future consumption. To illustrate, imagine an economy with a single commodity, such as corn. Each unit of corn can be either consumed immediately or saved (invested) by planting it for future growth. This process increases the stock of capital, leading to higher future yields, which can then be consumed or saved again, perpetuating economic growth.