Disposable vs Discretionary Income – Daily Flash Briefing

January 6, 2021 by Bautis Financial

Discretionary income is disposable income (after-tax income), minus all payments that are necessary to meet current necessities.

Have you ever been confused about disposable versus discretionary income?

Disposable income doesn’t mean you can throw it away, it means it’s at your disposal. Disposable income includes essential and non-essential spending and saving.

Discretionary income is the saving, spending or investing after necessities have been paid. It could be as simple as a latte, dining out or a vacation.

So remember, if the money is at your disposal, it’s disposable income.

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