Disposable Income for Dummies

Disposable income is the money that you have left over after you have paid for all the things that you really need to live. It's the money that you can choose to spend on whatever you want, like buying things that make you happy or saving up for something big, like a trip or a special toy. It's like the money that's leftover after you buy all the groceries, pay for the bills, and take care of all the things you need to live your life.

So, let's imagine that your parents give you some money every week to do your chores, like taking out the trash and cleaning your room. They tell you that from this money, you need to first put some aside for your lunch at school, then give some to help pay for your little brother's medicine, and finally, use some to save up for a new video game. The money that you have left after doing all these things is your disposable income.

Another way to think about it is that it's like the spending money that you have after you take care of all the important things that need to be paid for. So, disposable income is the money that you can decide how to spend with no rules or restrictions.