What is Disposable Income?
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Disposable Income is defined as the amount of income you have after taxes (i.e. federal income tax, state income tax, city income tax, social security and Medicare).
Disposable income is frequently confused with Discretionary income, which is your Disposable income minus any fixed expenditures such as housing, food, car payments, insurance, etc.
Be aware, these two terms are often used interchangeably, and you’ll really need to read the article to determine the true definition.
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May 23rd, 2008 at 6:43 am
Good concise explanation. You also find that it is often those on lower incomes that have a higher disposable income. It is beleived that this is because some people on lower incomes are likely to save less and spend more and hence why advertisers try to target them more.