Investopedia

Continue to Site »

Disposable Income

Filed Under » ,
Dictionary Says

Definition of 'Disposable Income'

The amount of money that households have available for spending and saving after income taxes have been accounted for. Disposable personal income is often monitored as one of the many key economic indicators used to gauge the overall state of the economy.

Calculated as:

Disposable Income


Also known as "disposable personal income" (DPI).
Investopedia Says

Investopedia explains 'Disposable Income'

For example, let's assume your household personal income includes $100,000 from salaries and you are paying at the 35% tax rate. Your household's disposable income would then be $65,000 ($100,000 - $35,000). Economists use DPI to gauge households' rate of savings and spending.

In 2005, the average disposable personal income dipped into negative territory for the first time since 1933. This means that in 2005, Americans were spending their entire DPI and then tapping into debt for further spending.

Articles Of Interest

  1.

    Bloated Budget? How To Trim The Fat

    Blood, sweat and tears should belong in the gym, but your money deserves some training time too.

  2. Top 5 Budgeting Questions Answered

    You don't need a degree to understand your money, begin saving and pay down debt.

  3. The Seasons Of An Investor's Life

    From a tentative spring to a comfortable winter, learn how to weather the phases of your investing journey.

  4. The Beauty Of Budgeting

    Make it to the end of the month, before you run out of money.

  5. 10 Tips For Achieving Financial Security

    Follow this sound advice and plan for a comfortable future.

  6. Increase Your Disposable Income

    Here are four quick and easy ways to up your spending money.

  7. Budgeting While You're In College

    Test your money management skills as you work your way through university.

  8. Kids Or Cash: The Modern Marriage Dilemma

    It now costs nearly $300,000 to raise a child for 18 years. Are you sure you're up for it?

  9. The Economics Of Pet Ownership

    Before you bring a furry friend into your household, make sure you can handle the hefty financial commitment.

  10. Microeconomics

    This tutorial teaches the basics of one of the most important economic topics. A must for all investors.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  2. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  3. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  4. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  5. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  6. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.
Trading Center
Array ( )
taggroups(for debug only):
Array ( [0] => Taxes [1] => Personal Finance [2] => SEG (Head Of Households) [3] => SEG (Head Of Households:Topic-Taxes) [4] => SEG (Head Of Households:TaxType-Personal) [5] => What's New ) time:11ms