When You Automate Your Savings You Are Less Likely to Spend

question 28

True/False

When you automate your savings you are less likely to spend those dollars because they never become part of the funds in your checking account.

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Definitions:

Depreciation Expense

A technique in accounting for distributing the expense of a physical asset across its usable life.

Fixed Costs

Expenses that do not change with the level of activity or output over a short period, such as rent, salaries, and insurance premiums.

Operating Leverage

A measure that evaluates the extent to which a firm can increase its profits by increasing sales, highlighting the fixed versus variable costs in operations.

Financial Break-Even

The point at which total revenues and total expenses are equal, resulting in neither profit nor loss.