Near Money: Definition, Examples, and Importance

example of near money

Mental accounting is the idea that people think about money differently depending on the circumstances. For example, if the price of gas goes down, they may begin to buy premium gas, leading them to ultimately spend the same amount, rather than taking advantage of the savings offered by the lower price. Bounded self-interest is the idea that people are often willing to choose example of near money a less-optimal outcome for themselves if it means they can support others. Giving to charity is an example of bounded self-interest, as is volunteering. While these are common activities, they are not captured by traditional economic models, which predict that people act mostly to further their own goals and those of their immediate family and friends, rather than strangers.

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You have the right to part of the money in that plan if any of it was earned during your marriage. You need to know when you married and when you separated to figure out what’s separate property and what’s community property. We strive to provide you with information about products and services you might find interesting and useful. Relationship-based ads and online behavioral advertising help us do that. If you’re not sure whether it’s time for you to start investing, or if you should focus on saving, the answer depends on your goals, risk tolerance, and financial situation.

How much has the U.S. government spent this year?

For others, this is a day the two spouses agreed together that their marriage was over, and they made plans to divorce. Generally, from that day forward, what you or your spouse earned or loans you took out were no longer community property. Investment products and services are offered through Wells Fargo Advisors. Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC (WFCS) and Wells Fargo Advisors Financial Network, LLC, Members SIPC, separate registered broker-dealers and non-bank affiliates of Wells Fargo & Company.

example of near money

It is taken into consideration when analyzing the quick (acid-test) ratio and current ratio of an organization. The difference between “money” and “near money” is an important distinction. Money includes physical cash and bank checking accounts that can be used as a medium for exchange and exchanged immediately.

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Keep reading to find the savings strategy, or strategies, that work best for you. Making Transactions – we use money directly for making transactions, while near money is an indirect medium of exchange – we need to convert it into money first before it can be used for transactions. For example, if they are going to retire soon or are needing a large amount of money to put a child through post-secondary education etc. Let’s face it, utility costs seldom go down over time, so take charge now and weatherize your home. Call your utility company and ask for an energy audit or find a certified contractor who can give you a whole-home energy efficiency review.

example of near money

Add up how much you spend servicing your debt each month, and you’ll quickly see. Once you’re free from paying interest on your debt, that money can easily be put into savings. A personal line of credit is just one option for consolidating debt so you can better pay it off.

Use money, save money, get Wise

The federal government spends money on a variety of goods, programs, and services that support the economy and people of the United States. The federal government also spends money on the interest it has incurred on outstanding federal debt. Consequently, as the debt grows, the spending on interest expense also generally grows. Near money and near moneys (or near monies) comprehensively have been influencing financial analysis and economic considerations for decades. Financial analysts view near money as an important concept for testing liquidity. Central banks and economists utilize the concept of near money in determining the different levels of the money supply, with the nearness of near moneys serving as a factor for classifying assets as either M1, M2, or M3.

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  • The term was coined in 1955 by Nobel laureate and UChicago alum Herbert A. Simon, AB’36, PhD’43.
  • For example, if you know you’re going to need to replace your car in the near future, you could start putting away money for one now.
  • Money’s most important function is as a medium of exchange to facilitate transactions.
  • Individuals with a high requirement for liquidity will hold various near money assets, such as high-yield savings accounts, money market funds, and Treasury bills.

Gain unlimited access to more than 250 productivity Templates, CFI’s full course catalog and accredited Certification Programs, hundreds of resources, expert reviews and support, the chance to work with real-world finance and research tools, and more. The types of near money used will depend on the analysis and situation.

Near money, although highly liquid, will take time to convert to cash. Therefore, the “nearness” of money refers to how much time it will take to convert it into cash. The Federal Reserve (Fed) generally has three levers it can use to influence money supply. These levers are open market operations, the federal funds rate, and bank reserve requirements. Adjusting one or all of these levers can affect the money supply and its different tiers. Thus, money supply levels can be important in comprehensive central bank policy analysis.

Separate property

You can explore the spending related to these supplemental appropriation laws in’s  COVID-19 Spending Profile page. For more details on U.S. government spending by category and agency, visit’s Spending Explorer and Agency Profile pages. Compared to the federal spending of $0 billion for the same period last year (Oct -1 – Invalid Date null) our federal spending has by $0 billion.

In order to ensure the maximum impact, TAIEX INTPA aims at strengthening the national development policy context. It supports the achievement of the Sustainable Development Goals, in line with the EU commitments to the Agenda 2030. TAIEX INTPA events will also be designed in synergy with other technical cooperation modalities active in the partner country. TAIEX INTPA geographically extends the Technical Assistance and Information Exchange instrument (TAIEX) to partner countries and territories covered by Directorate-General for International Partnerships. TAIEX relies on a network of contact points at the level of national public institutions implementing or enforcing EU legislation.

Near money, sometimes referred to as quasi-money or cash equivalents, is a financial economics term describing non-cash assets that are highly liquid and easily converted to cash. For most of us, keeping your savings separate from your checking account helps reduce the tendency to borrow from savings from time to time. If your goals are more long-term, consider products with higher yield rates like a CD or money market account for even better savings. If you’re trying to save money through budgeting but still carrying a large debt burden, start with your debt.

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Unit of Account – money is a unit or account, it is a common measure of value. If you don’t have a case with us you can view your payment history on If you need a certified payment history, please contact the Clerk of Court in the county where your order was issued. You will need to include your name, the other parent’s name, and child support case number or depository number . Do you pay $20 a week for snacks at the vending machine at your office?

Think about the most common kind of unexpected expenses you’ve had in the past and how much they cost. This may help you set a goal for how much you want to have set aside. Money also functions as a unit of account, providing a common measure of the value of goods and services being exchanged. Knowing the value or price of a good, in terms of money, enables both the supplier and the purchaser of the good to make decisions about how much of the good to supply and how much of the good to purchase.

  • If you use a credit card or take out a loan to pay for these expenses, your one-time emergency expense may grow significantly larger than your original bill because of interest and fees.
  • No such agreement exists today, and the definition of money appropriate to present circumstances is debated.
  • The quick ratio looks at assets with the shortest nearness, usually 90 days.
  • For example, if the price of gas goes down, they may begin to buy premium gas, leading them to ultimately spend the same amount, rather than taking advantage of the savings offered by the lower price.
  • These ideas (overconfidence, loss aversion and self-control) are foundational concepts in behavioral economics today.

If you can’t decide, a judge can decide for you at a hearing or trial. WellsTrade® and Intuitive Investor® accounts are offered through WFCS. Visit the Monthly Treasury Statement (MTS) dataset to explore and download this data. The U.S. government has spent $NaN billion in fiscal year to ensure the well-being of the people of the United States.


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