Copyright Goodheart-Willcox Co., Inc. Chapter 8 Consumer Services 219 Saving and Investing Budgeting is not only about spending to meet needs and wants, but also about saving and investing for the future. Investing involves putting money into something to gain a fi nancial return. A common way to save money is to open a savings account that earns interest. Interest is a percentage of money the fi nancial institution pays regularly for the use of the account holder’s money. With an interest-bearing savings account, the interest rate is usually fairly low, but the principal (original amount invested) will grow over time. Figure 8.17 shows other common ways to save and invest. Banking Electronically In times past, invoices or statements were mailed to purchasers of goods and services. The purchasers wrote checks and mailed them to the merchant. This took time and created a significant cost for transactions in printed paper, postage, and check processing. Electronic banking has changed this process significantly (Figure 8.18). Electronic banking involves using the Internet to access banking services. Through the use of electronic banking, people can instantly check account balances and look at their statements. They can transfer money from one account to another, which is called electronic funds transfer (EFT). My Monthly Budget Income Part-time job Babysitting Gifts $150 $50 $5 Total income Expenses Fixed expenses Lunch Flexible expenses Other flexible expenses Device apps Snacks and eating out Clothing and accessories Transportation Total expenses $30 $5 $20 $20 $10 $10 $95 $205 Figure 8.16 When income is greater than expenses, saving money can occur. How much money can be saved in this budget?