The
concepts of personal disposable income and saving try to explain the relationship between the disposable or discretionary income of an individual and his savings. The two terms are in fact pretty deeply related.
Personal Disposable Income
The term
personal disposable income can also be called as the personal discretionary income. This form of income could be explained as the money that is left with an individual after he has made the necessary expenditure like paying off the taxes.
The categories of expenditure that could be classified as fixed are also relevant in the context of personal disposable income. Personal disposable income has often been expressed in mathematical terms as the difference of gross income and the combination of taxes and the essential expenses of life.
Relationship of Personal Disposable Income and Saving
Personal disposable income is often used for purposes of spending money on goods and services that are desired by an individual. However, it may also be used for the purposes of saving as well by not spending a particular amount of money for consumption. The personal disposable income of a person could be used for the purposes of investing in saving options like insurance plans.
