How it is calculated
Every month: amount = amount × (1 + rate/12) + the amount set aside. The principle is from Module 8: saving is the first expense, not what is left over.
The terms in the Glossary
- Pay yourself first — "Pay yourself first" is the principle that saving is the first expense on payday, not whatever is left at the end of the
- Saving — Saving is setting aside part of your income today to use later — for a reserve, a goal or the future — with the money ke
- Compound interest (compounding and capitalisation) — compound interest is interest charged not only on the starting amount but also on interest already added — which is why
- Personal budget — A personal budget is a plan of how much money comes in and where it will go over a period — for example a month — regula