disposable income
/dɪˈspəʊzəbl ˈɪnkʌm/
Meaning
This term refers to the amount of money an individual or household has available for spending or saving after income taxes have been deducted. It represents the actual purchasing power of consumers. It is used in economic reports, financial planning, and everyday discussions about personal budgeting.
Examples
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After paying his rent and taxes, he had very little disposable income left for entertainment.
After paying his rent and taxes, he had very little disposable income left for entertainment.
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An increase in disposable income usually leads to higher consumer spending.
An increase in disposable income usually leads to higher consumer spending.
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Young professionals without children often have more disposable income to spend on travel.
Young professionals without children often have more disposable income to spend on travel.
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The government hopes that tax cuts will boost the average household's disposable income.
The government hopes that tax cuts will boost the average household's disposable income.
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She allocates a portion of her disposable income to high-yield savings accounts every month.
She allocates a portion of her disposable income to high-yield savings accounts every month.
Common Mistakes
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✗ I don't have much disposed income this month.
✓ I don't have much disposable income this month.
The correct adjective is 'disposable' (available for use), not 'disposed' (which means inclined or thrown away).
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✗ My disposable income is low because my rent is so high.
✓ My discretionary income is low because my rent is so high.
Strictly speaking, 'disposable income' is income after taxes. Income left after taxes and essential living expenses (like rent) is 'discretionary income', though people often conflate the two in casual speech.
Related Expressions
Practice
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With rising inflation, many families are seeing a sharp decrease in their ___.
💡 The money left over after taxes for spending or saving.
Show answer
disposable income
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He decided to invest his ___ in the stock market rather than buying a new car.
💡 Available net income.
Show answer
disposable income