Purchases versus Expenses

Purchases versus Expenses
What\'s the difference?

Purchases

Examples:
  • Sunglasses
  • That daily mocha latte
  • MP3s on iTunes

Purchases are something you choose to spend money on. These might be spontaneous (beware of the impulse buy!) or planned for months. Either way, you should consider them carefully!

Expenses

Examples:
  • The mortgage
  • Your school loan payment
  • Subway fare or gas for the car

Expenses are things you have to pay for, things like rent, or the electric bill. You can't choose to not pay rent! Expenses are a fact of life, but you should budget for them. And don't forget annual expenses like insurance!

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