What is the outcome when you subtract your actual expenses from your actual income at the end of the month?

When you subtract your actual expenses from your actual income at the end of the month, the outcome is typically referred to as either a "profit" or "surplus." This calculation helps you understand your financial status over that period.

If your income exceeds your expenses, the resulting value indicates that you have earned more than you spent, which is considered a profit or surplus. This means you have excess funds available, which can be saved or invested. However, if your expenses exceed your income, this results in a deficit, which could lead to debt if you have to borrow to cover the shortfall.

The correct term for this situation is influenced by the context of financial management. Profit usually applies within a business framework while surplus is often used in personal finance. Understanding this concept is crucial for managing finances effectively, ensuring you strategically allocate any surplus or profit toward savings, investments, or debt repayment.