Bottom Line Savings Definition
When it comes to your bottom line, savings are key. But what exactly does that mean? In short, your bottom line is the difference between your total revenue and your total expenses. Savings, then, are any extra money you have left over after you’ve covered all of your costs.
For businesses, the bottom line is often represented as a profit or loss. If your business has more revenue than expenses, it’s said to be profitable. If expenses exceed revenue, then the business is operating at a loss.
Of course, businesses aren’t the only ones with a bottom line. Individuals also have a bottom line: their net worth. Your net worth is simply the value of your assets (property, savings, investments) minus any debts and other liabilities you may have. So if you own a home worth $200,000 and have $50,000 in savings, but also owe $150,000 on your mortgage and have $10,000 in credit card debt, your net worth would be $0.
The term “bottom line” can also be used more broadly to refer to the most important factor in any situation. For example, if you’re trying to decide whether to take a new job or stay at your current one, the “bottom line” would be which option offers more pay and better benefits.
