Personal Finance Question

[Pixel1980]

Are savings considered an expense?

[Pixel1980]

Would savings (such as the amount you deposit into a savings account or contribute to 401k) be part of the monthly expenses?

[monty613]

Would savings (such as the amount you deposit into a savings account or contribute to 401k) be part of the monthly expenses?

monthly expenses for what? in what context?

if you're trying to determine a budget, i suppose you could consider savings an "expense" or an outflow of cash (?)

your question doesn't really make any sense.

[Pixel1980]

Yeah, I'm trying to set up and manage my budget. For some reason, it doesn't make sense to me for savings account or RRSP to be considered an expense. Aren't expenses outflows of money to other people in exchange for goods/services?

[jobby]

Would savings (such as the amount you deposit into a savings account or contribute to 401k) be part of the monthly expenses?

you can consider them as monthly expense but CRA does not allow them as expenses (for tax purpose). Contribution to savings account in Canada is not tax deductable, interest is taxable except in TFSA. 401 equivalent in Canada is RRSP, amount contributed is tax deductable.

[Shojin]

Savings should not really be considered an expense, as it doesn't negatively affect your overall net worth. For purposes of cash flow however, it can be factored in when determining budgets, especially if you are saving for a particular goal in mind.

From a lenders perspective, of course it won't be seen as an expense and won't negatively affect maximum exposure calculations (credit limits etc.)

[Thalo]

The stupid CFP exam considers savings an expense.

[angiek]

I have always thought an expense was anything consumable. Once you use it, it will not be there. So, no it would not be an expense since you will still have it.

[uglyguy]

The stupid CFP exam considers savings an expense.

Really??????