 For simplicity, it is also assumed that the individual spends his entire paycheck over the course of the period (there is no saving from period to period).As a result the total cost of money management is equal to the cost of withdrawals, formula_6, plus the interest foregone due to holdings of money balances, formula_7, where formula_8 is the average amount held as money during the period.Efficient money management requires that the individual minimizes this cost, given his level of desired transactions, the nominal interest rate and the cost of transferring from interest accounts back to money.