A Better Way to Manage Your Everyday Money - Book - Page 27
Chapter 3: Terms and Procedures
While reading this book you will encounter terms that may be new or used in new ways. This
chapter introduces the terms and concepts that are fundamental to understanding your everyday
money and PerNetFlow.
Allowance
Our lives normally revolve around our jobs which tend to happen
between our weekends. A byproduct of a weekly job schedule is that
our out-of-pocket spending also happens weekly: morning lattes,
lunch, gas for the week, bus money, dry cleaning, groceries for dinner,
and so on. Since our spending revolves around our workweek, it makes
sense that we give ourselves money for out-of-pocket spending once
each week. This is called an allowance.
Sinking funds
A sinking fund is used to accumulate a goal amount of money by a date to pay for the purchase
of an item or items in the future. It’s how you save up for something. Examples could be putting
aside money for a vacation, a new bicycle, the down payment on a car, or Christmas presents.
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