What is the consequence of spending money from your savings account?

When you spend money from your savings account, the balance in the account decreases. This reduction in balance directly impacts the interest that you can earn on the remaining funds. Savings accounts typically earn interest based on the total balance. Hence, with a lower balance, the amount of interest accrued over time will also decrease, leading to a "lost interest" scenario. Essentially, by withdrawing funds, you are not only reducing your immediate available savings but also the compounding potential of those funds, which could result in less money earned over time as the interest compounds on a smaller amount. Maintaining a higher balance allows for greater total interest accumulation, emphasizing the significance of the time value of money principle.