| Disposable Income |
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Information AboutDisposable Income |
| CATEGORIES ABOUT DISPOSABLE INCOME | |
| taxation | |
| income | |
| household behavior and family economics | |
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Disposable income is the total amount of income an individual makes after direct taxes. DISPOSABLE/DISCRETIONARY Another concept that is often confused with disposable income is discretionary income. This is equal to disposable income ''minus'' the cost of the fixed expenses of life (such as rent/ Mortgage , food, car payments, insurance, etc.). It is income that can be saved or spent on goods and services ''wanted'', not ''needed''. Disposable income is gross pay minus taxes and deductions. In other words, disposable income is the same as "net pay". Unfortunately, the definition of discretionary income is fuzzier than that of disposable income, making it harder to measure. When applying for a Loan or a Mortgage , banks often take into consideration the applicant's disposable income in order to assess the loan repayment capacity of the applicant. POVERTY People that are living at or below the Poverty Line have no discretionary income. SEE ALSO EXTERNAL LINKS
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