Definition
When you earn more money than you spend in a given period. It gives you extra funds to save, invest, or pay off debts.
What to consider
- A surplus means you’re bringing in more than you spend—great for savings!
- Decide how to best use that extra money, whether saving or investing.
- Keep an eye on it as a sign of financial stability.
Real world scenarios
- Tanisha ends the month with extra cash after meeting her savings goal, so she makes an extra student loan payment.
- When Logan receives a performance bonus at work, he allocates the surplus to beef up his emergency fund.
- A year of small surpluses helps Liam fund a dream vacation without relying on credit.
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