If you’re still working and earning, it goes without saying that saving and investing are important habits to nail down, whether you’re working towards a specific goal, want to grow your wealth, or wish to give yourself some financial peace of mind.

But if you aren’t maximising the returns you get on the money you are saving, you are likely to be missing out on extra value that could really make a big difference to your future.

Discover why having too much in savings and not enough invested can harm your long-term wealth plans, and why it’s important to set out clear time frames when it comes to your savings and investment strategies.

Your savings habits, and the outcome of them, will depend on your financial circumstances and objectives

There are two common ways to manage your accumulated wealth over the long term:

• In an interest-bearing savings account
• By investing in shares and other investment options.

Clearly, how much you save will be driven primarily by your financial circumstances and objectives. A common guideline suggests that you should look to use 50% of your earnings on needs, 30% on wants, and 20% to clear debt and set funds aside for the future – but your own circumstances may dictate a different ratio.

Before starting to put together your savings and investment plan, it’s advisable to clear excessive unsecured debt. Credit card interest is likely to exceed savings and investment returns, so it makes financial sense to use the money to clear debt first.

Within those parameters, it’s important to make choices that align with your goals.

Holding some cash is prudent – but it may not work very hard for you

Before you start looking at a wider savings and investment strategy, ensure you have an emergency fund in an instant-access savings account.

This should amount to approximately three to six-months’ household income. Having cash in place will give you valuable peace of mind and ensure that in the event of any unforeseen circumstances, you won’t have to resort to expensive short-term borrowing.

Beyond your emergency fund, the decision to save or invest should be primarily driven by time frame.

We usually recommend that if you will need to access your money within five years, you should probably put it in a savings account, rather than investments. This is likely to include saving for specific short-term events, such as buying a new car or paying for a holiday.

That said, with inflation at 2.8% (as of December 2025), money in low-interest accounts is losing its purchasing power.

Furthermore, the Irish Independent confirmed that savers missed out on €800 million of interest in 2024 alone, simply by keeping money in low-interest accounts.

So, even for short-term savings, you should take the opportunity to shop around for the best returns you can. It’s also worth considering the range of tax-exempt options from State Savings.

Investing could help your wealth to grow, but there are risks involved

Historically, the most effective long-term way to grow your wealth has been through investing.

For example, according to Curvo, the S&P 500 index has average annualised returns of 15.9% over the last 10 years, while Trading Economics confirms that the ISEQ has more than doubled in value over the same period.

You may have specific goals you want to achieve with long-term investing, such as accruing wealth for your children to access when they are older or contributing towards your own retirement income.

However, it’s important to be aware of the risks involved when you invest.

The nature of stock markets and shares in individual companies means that the values can rise and fall based on business and sector performance. There is also the potential for adverse economic conditions or political events to trigger market upheaval, which could cause share values to fall dramatically.

Because of this, we would normally recommend that you invest for a minimum of five years, ideally a decade or more, to ride out the effects of any short-term market decline.

Read more: Why passive investing is hard for decision-makers (and how to get used to it)

A bespoke investment strategy could help you grow your wealth

When deciding on your investment strategy, it can help to follow some simple rules:

• Understand your attitude to risk and how much you are prepared to lose to meet your investment goals.
• Select a spread of investments rather than putting all your eggs in one basket.
• Don’t constantly check your fund values, as the growth you enjoy is likely to be long-term rather than instantaneous.
• Accept that volatility is a natural feature of stock markets.
• Reinvest your dividends to buy extra shares and compound your investment growth.

The key point to bear in mind is that you should see investing as a long-term commitment. Historical evidence suggests the longer you stay invested, the better your chances of enjoying strong growth.

Work with us to define your saving and investment strategy

For most people, a balance of cash and investments will ensure that you have funds readily available for short-term goals and emergencies, while long-term, your invested wealth has the opportunity to grow.

Our team can assess your financial situation and speak to you about your goals, helping you make the right choices when it comes to your savings and investment strategy.

We can also help you protect what you love and retire with the peace of mind you need.

Email us at clients@iqf.ie, or call +353 71 915 5560.

Please note

This article is for information only. It does not constitute advice.

It describes financial planning services that iQ Financial can offer to you. Financial planning services are not regulated by the Central Bank of Ireland.

iQ Financial is not a tax adviser, and tax advisory services are not regulated by the Central Bank of Ireland.

The value of your investments (and any income from them) can go down as well as up, and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.