Savings is the money a person has left over when they subtract their consumer spending from their disposable income over a given time period. Savings can be used to increase income through investing. Savings comprise the amount of money left over after spending. For example, Nana's monthly paycheck is $5,000. Her expenses include a $1,300 rent payment, a $450 car payment, a $500 student loan payment, a $300 credit card payment, $250 for groceries, $75 for utilities, $75 for her cellphone and $100 for gas. Since her monthly income is $5,000 and her monthly expenses are $3,050, Sasha has $1,950 left over. If Sasha saves her excess income and faces an emergency, she has money to live on while resolving the issue. If Nana does not save her extra money and her expenses exceed her income, she is living paycheck to paycheck. If she has an emergency, she does not have money to live on and must secure payments for her bills. --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app