What is personal disposable income?

After income taxes have been subtracted, is the amount of money that an individual or household has to spend or save. Disposable personal income is extensively watched at the macro level as one of the primary economic indicators used to assess the overall status of the economy. Disposable income is the source of a variety of statistics and economic indicators. Economists, for example, utilize the disposable income to compute measures like discretionary income, personal savings rates, marginal propensity to spend, and marginal propensity to save.

  • Disposable income is net income. It’s the amount left over after taxes.
  • Discretionary income is the amount of net income remaining after all basic necessities are covered.
  • Economists monitor these numbers at a macro level to see how consumers are saving, spending, and borrowing.