Financial Literacy provided by
New Mexico Educators Federal Credit Union


Disposable vs. Discretionary Income

These are two concepts you should become familiar with:

Disposable Income is all the money you have left after you pay taxes, Social Security, and FICA. This is the amount you have for paying all your bills and taking care of all of your needs.

Discretionary Income is the money that is left over after you take care of all of your needs. If you keep your expenses low, you will not have to use so much disposable income and you will have more discretionary funds left over to save for the things you want.