A Better Way to Manage Your Everyday Money - Book - Page 106
Savings expense
You set aside current income in savings to be used for a purpose in the future. Savings can be
either short- or long-term. Savings are an expense because you are setting current income aside
for use in the future which makes the money unavailable to use today.
Short-term savings
A short-term savings is used to accumulate money for an immediate need. The money in
short-term savings is kept in your checking account for quick access. Earning interest on
short-term savings is normally not a concern.
In PerNetFlow, the amount and frequency of a short-term savings set-aside can be:
● A percent of an income … The planned set-aside amounts are based on the planned
income receipt amounts. The actual amounts set aside to the savings ledger are a percent
of the income deposits.
● A fixed amount … The same amount of money is set aside on a fixed schedule.
● Unscheduled … Set-asides are made when there is extra money not needed for any other
purpose.
96
