How Much Disposable Income Do You Have?
When we are children growing up, we reach a certain age, an age where we really cannot go out and get a job, and yet an age where we need some money; more than just asking our parents to pay for everything, every time.
We need to learn a little responsibility with and about money, and this usually begins by our parents giving us an allowance or “pocket money”.
As to what age this giving of cash begins, and how much is given, can vary among households and families, but even if it is just a few quid a week, it is to help teach us about money at a young age.
There also is the teaching of the value of money, usually this begins with the exchange of cash for doing some chore/work.
For some it may be cleaning their room, taking the rubbish out, cleaning the garden, doing the dishes, or a combination of them all. You do your chores, you get your allowance.
Of course when we are younger if we are given a fiver or £10, we hav no bills to pay with it, the money is ours to spend as we see fit.
If we want to spend it on fast food with our friends, we can do so. If we wish to use the money to go to see a film or show, that is our choice.
For larger purchases we may need to save up a few weeks or months of our pocket money to make the purchase. But the point is, the money is ours to spend, it is disposable money.
What is Disposable Income?
The definition of disposable income is generally thought to be the money you have left over after paying all your bills and expenses each month.
It is also called discretionary income.
This is money that you have left after paying your rent/mortgage, council tax, gas and electricity, insurances, food, clothing (although this can be seen as part of your disposable income), and any loans or credit cards.
After you pay all the bills and expenses, what money you have left for going out, buying music or books, meal out, etc, is what you may choose to spend your disposable income on.
How much we may have each month for disposable income can vary among households, and can vary each month according to how we are paid, and also each month may bring about extra expenses.
Extra expenses such as gifts for friends and family, and holidays such as Christmas or holidays away.
So sit down, put pen to paper and calculate your disposable income…..I’ll wait.
How much disposable income do you have?