Dissaving

AAA

DEFINITION of 'Dissaving'

Spending an amount of money greater than available income. Dissaving is considered the opposite of saving, and can include tapping into money already in a savings account or accumulated elsewhere. An individual may also borrow against future income by taking out a loan or using credit cards. Dissaving can continue to the point where an individual's income, savings and available credit are all exhausted.

BREAKING DOWN 'Dissaving'

An individual might experience a period of dissaving for a number of reasons. Events within the control of the dissaver may include making too many big ticket purchases in a short time frame, taking an expensive vacation or generally living outside of his or her means. Events outside of the dissaver's control, such as unemployment, may require the individual to tap into reserves even if the individual greatly reduces consumption. In the case of unemployment, disposable income from a salary no longer exists, though obligations may still require payment (rent, loan payments and so on).

RELATED TERMS
  1. Credit Card

    A card issued by a financial company giving the holder an option ...
  2. Disposable Income

    The amount of money that households have available for spending ...
  3. Savings Account

    A deposit account held at a bank or other financial institution ...
  4. Credit Limit

    The amount of credit that a financial institution extends to ...
  5. Emergency Fund

    An account that is used to set aside funds to be used in an emergency, ...
  6. Autonomous Consumption

    The minimum level of consumption that would still exist even ...
Related Articles
  1. Budgeting

    How Much Debt Can You Handle?

    Follow these five steps to manage debt without cutting up your credit cards.
  2. Savings

    10 Tips For Achieving Financial Security

    Follow this sound advice and plan for a comfortable future.
  3. Options & Futures

    Top 5 Budgeting Questions Answered

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

    Increase Your Disposable Income

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

    Understanding Credit Card Interest

    Paying these rates can impact your disposable income and your investment returns.
  6. Options & Futures

    Changing The Face Of Bankruptcy

    A 2005 law attempts to unmask fraudulent debtors and still save those who are struggling. Will it affect you?
  7. Insurance

    5 Ways to Lower Life Insurance Premiums

    Learn several effective methods for lowering life insurance premiums. These include quitting smoking and considering term life insurance.
  8. Budgeting

    The 7 Best Ways to Get Out of Debt

    Obtain information on how to put together and execute a plan to get out of debt, including the various steps and methods people use to become debt-free.
  9. Economics

    Is a Recession Coming?

    In the space of a week, the VIX Index, a measure of market volatility, spiked from 13, suggesting extreme complacency, to over 50, evidencing total panic.
  10. Mutual Funds & ETFs

    4 Mutual Funds to Consider If Interest Rates Rise

    Learn what mutual funds will perform best if interest rates rise. Interest rates can rise due to inflation or to an improving economy.
RELATED FAQS
  1. What is the difference between induced consumption and autonomous consumption?

    The first step to determining the difference between autonomous and induced consumption is to look at what each of these ... Read Full Answer >>
  2. Is Japan an emerging market economy?

    Japan is not an emerging market economy. Emerging market economies are characterized by low per capita incomes, poor infrastructure ... Read Full Answer >>
  3. Are Social Security payments included in the US GDP calculation?

    Social Security payments are not included in the U.S. definition of the gross domestic product (GDP). Transfer Payments For ... Read Full Answer >>
  4. How does a bank determine what my discretionary income is when making a loan decision?

    Discretionary income is the money left over from your gross income each month after taking out taxes and paying for necessities. ... Read Full Answer >>
  5. What economic indicators are important to consider when investing in the retail sector?

    The unemployment rate and Consumer Confidence Index (CCI) rank as two of the most important economic indicators to consider ... Read Full Answer >>
  6. How do changes in interest rates affect the spending habits in the economy?

    Changes in interest rates can have different effects on consumer spending habits depending on a number of factors, including ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Bubble Theory

    A school of thought that believes that the prices of assets can temporarily rise far above their true values and that these ...
  2. Stock Market Crash

    A rapid and often unanticipated drop in stock prices. A stock market crash can be the result of major catastrophic events, ...
  3. Financial Crisis

    A situation in which the value of financial institutions or assets drops rapidly. A financial crisis is often associated ...
  4. Election Period

    The period of time during which an investor who owns an extendable or retractable bond must indicate to the issuer whether ...
  5. Shanghai Stock Exchange

    The largest stock exchange in mainland China, the Shanghai Stock Exchange is a nonprofit organization run by the China Securities ...
  6. Dead Cat Bounce

    A temporary recovery from a prolonged decline or bear market, followed by the continuation of the downtrend. A dead cat bounce ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!