💰Disposable Income Calculator
Calculate how much money you have left after essential expenses for discretionary spending and savings
Monthly Income
Essential Monthly Expenses
How to Use This Calculator
This calculator shows how much money you have available after covering all essential expenses. Enter your net income and monthly expenses to see your disposable income and receive a financial health analysis.
The budget health check compares your housing and debt ratios to recommended guidelines to help you identify areas for improvement.
Understanding Disposable Income
What is Disposable Income?
Disposable income is money left after essential expenses. It's what you can spend on wants, savings, or investments.
The 50/30/20 Rule
A popular budgeting guideline: 50% for needs (essentials), 30% for wants (discretionary), and 20% for savings and debt repayment.
Housing Ratio
Financial experts recommend keeping housing costs below 30% of your income to maintain a healthy budget.
How to Increase Your Disposable Income
Reduce Housing Costs
Consider renegotiating rent, looking for cheaper housing, getting roommates, or refinancing your mortgage. Housing is usually the biggest expense and biggest savings opportunity.
Eliminate High-Interest Debt
Credit card debt and personal loans eat into disposable income. Use the avalanche method (highest rates first) or snowball method (smallest balances first) to pay off debt.
Increase Your Income
Options include: asking for a raise, looking for a better job, side gigs or freelancing, monetizing hobbies, or creating passive income through investments.
Cut Unnecessary Expenses
Review subscriptions (streaming, gym, apps), negotiate bills (internet, phone, insurance), bring lunch to work, and compare prices before big purchases.
Frequently Asked Questions
What percentage of my income should be disposable?
Ideally, 30-50% of your income should be disposable after essential expenses. If you are below 30%, your essential expenses may be too high.
What should I do with my disposable income?
Prioritize in order: emergency fund (3-6 months of expenses), debt payoff, retirement (at least 15% of income), then wants and entertainment.
How does housing ratio affect my disposable income?
Housing is normally 25-35% of income. If you are above 35%, there is little left for other needs and savings. Consider more affordable housing options.
Financial Accuracy
Disclaimer: This calculator provides estimates for informational purposes only. This is not financial, tax, or legal advice. Please consult a qualified financial advisor for advice specific to your situation.