A fuller guide to this term is on the way. In the meantime, the related terms below explain the ideas around it.
Related MoneyPedia terms
- Discretionary IncomeThe money remaining after covering both taxes and essential living costs, available for wants, extra savings, or debt payoff.
- Net IncomeWhat is left of your earnings after taxes and deductions, which is the money you actually have available to spend or save.
- Take-Home PayThe amount of your paycheck that actually lands in your account after taxes, benefits, and other deductions are removed.
- Spending PlanA forward-looking plan for where each dollar of income will go before you spend it, covering bills, saving, and everyday costs.
- Savings RateThe share of your income you set aside rather than spend, usually shown as a percentage of your take-home pay.
- Discretionary SpendingMoney spent on nonessential things you want but could go without, like dining out, hobbies, or entertainment.
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Plain-English education — not personalized legal, tax, or investment advice.