income

1. General: Flow of cash or cash-equivalents received from work (wage or salary), capital (interest or profit), or land (rent).

2. Accounting: (1) Excess of revenue over expenses for an accounting period. Also called earnings or gross profit. (2) Amount by which total assets increase in an accounting period.

3. Economics: Consumption which, at the end of a period, will leave an individual with the same amount of goods (and the expectations of future goods) as at the beginning of that period. Therefore, income means the maximum amount an individual can spend during a period without being any worse off. Income (and not the GDP) is the engine that drives an economy because only it can create demand.

4. Law: Money or other forms of payment (received periodically or regularly) from commerce, employment, endowment, investment, royalties, etc.

Always live within your means: If you make it a habit to live within your means each and every day, you are less likely to go into consumer debt when gas or food prices go up and more likely to adjust your spending in other areas to compensate. Debt begets more debt when you can't pay it off right away - if you think gas prices are high, wait until you're paying 29.99% annual percentage rate (APR) on them. To take this principle to the next level, if you have a spouse and are a two-income family, see how close you can get to living off of only one spouse's income. In good times, this tactic will allow you to save incredible amounts of money - how quickly could you pay off your mortgage or how much earlier could you retire if you had an extra $40,000 a year to save? In bad times, if one spouse gets laid off, you'll be OK because you'll already be used to living on one income. Your savings habits will stop temporarily, but your day-to-day spending can continue as normal.

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• One Perspective on Income