In the current climate when many countries around the world are making cutbacks, disposable income is at its lowest level in many years. Tax rises and inflation are the key factors in ensuring that people now have to make their money go that little bit further. In order to ensure that you do not overspend and leave yourself in debt it is important to be able to accurately calculate what your daily disposable income is.
An eHow article describes disposable income as being the money that you have to spend after your taxes, bills and other outgoings have been accounted for. By calculating your disposable income you will be in a position to understand how much money you have to spend on luxuries and other non essential items.
The simplest way to calculate your disposable income is as follows :-
Add up all of your incoming amounts. The main amount will be your salary if you are working however other benefits can be taken into account if they are received on an ongoing basis. It is worth remembering that if you have a joint account with your partner then all of their income details will need to be included in order to reach the final figure of your household income.
The next stage is to add up all of your outgoings for the same period as you calculated your income for. These will include large items such as the mortgage or rental payments on your home, any loans you may have for items such as cars or home improvements, utility bills, credit card bills plus any other payment you make on a regular basis. For items where the amount is not always the same such as fuel or shopping, an estimated amount should be uses. Rather than guessing, historical transactions should be studies in order to come to the figure for this expense.
When you have reached a grand total for all of your outgoings it is simply a case of subtracting this amount from the income amount in order to give you your disposable income. This figure in most cases will be your disposable income for the month. There are going to be some occasions where you need to pay bills which only occur once a year, in this case, you already have your base figures so you can just add on the payment to this total in the month that it is due for payment. You now need to divide the amount by the number of days in the month to get your daily allowance. Of course, you will not spend exactly the same amount each day so if you know you have a social event or a birthday to buy for during the month, you will need to ensure that you have enough disposable income set aside for this event.
By managing your daily disposable income you are going to reduce the chances of going into debt and therefore reducing the stress and anxiety you may put yourself under if you were to be careless with your finances.