Quicken > Personal Finance
Disposable Income: What Is it and How
Does it Affect your Finances?
August 15,
2019 | John Worley Personal Finance
The term
“disposable income” is something of a misnomer. Quicken customer service sounds
like fun money, but it’s quite the opposite.
Quicken customer support is known as disposable personal income (DPI) or
“take-home pay,” disposable income, is the Quicken phone number amount of money available after
taxes and other employee deductions have been taken out of your paycheck. It’s
not truly “disposable” because it has to cover your family’s most essential
needs each month.
So why is
disposable income so important? On a national level, it’s used to measure
consumer spending and the health of the Quicken helpline number economy. On a
personal level, it’s often a critical factor in determining your family’s
financial resources & Quicken support number.
Let’s take a closer look at disposable income to learn more about what it is, what it isn’t,
and how to use it as the basis for your household budget.
Disposable
Vs. Discretionary Income
Disposable
income is the Quicken customer service money you have leftover after taxes to
pay for necessities such as rent or mortgage, transportation, groceries,
utilities, insurance premiums, and other essential costs.
Discretionary income, a subset of disposable income, is the amount of
money you have leftover after you’ve paid for all the Quicken
customer support above necessities. It’s up to you how to use the Quicken
customer support number discretionary income—you can save it, spend it, invest
it, or some combination of the three.
According to
Quicken customer support freelance writer and Contributor Robert Longley,
disposable income and discretionary income are two of the Quicken customer support number most
important terms in the world of personal finance. “Understanding what
disposable income and discretionary income are and how they differ is the key
to creating and living comfortably within a manageable budget,” he explains.
Budgeting
your Disposable Income
There are
many Quicken support technical support number different budgeting methods out there, and the Quicken support
phone number one that’s best for you and your household might be quite
different from that of a friend or family member. However, many Quicken
customer service experts agree that the 50/30/20 method is a great option for new budgeters, as well as those
who don’t necessarily want to get into the Quicken tech support number nitty-gritty
of tracking spending via multiple categories.
With the
50/30/20 method, you only have to the Quicken technical support number manage
three broad spending categories:
50
percent of your income is set aside for needs (e.g. housing,
groceries, utilities, health insurance)
30
percent of your income is set aside for wants (e.g., dining out,
travel, movies)
20
percent of your income is set aside for financial goals, including
savings, investments, and paying down debts such as monthly credit card bills
To see how
your Quicken customer support number current spending compares to the 50/30/20
budget, you can do the Quicken customer service number calculations yourself,
or use one of the many free budget worksheets available online.
Understanding
what disposable income is and how it works is really the Quicken technical support
number first steps in creating and maintaining a healthy household budget. If you
follow the Quicken support number basic parameters of the 50/30/20 budgeting
method and make adjustments where needed, you’ll be better prepared for any
unexpected expenses that may arise—and more likely to enjoy the Quicken
customer support number a stress-free financial future
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