What Is Disposable Income?

By Kristi Waterworth – Updated Mar 15, 2025 at 12:28 AM

Key Points

Disposable income is what remains after taxes and unavoidable payments are deducted.
Higher disposable income boosts consumer spending and economic growth.
Investors should monitor disposable income to assess company and market health.

Living in a consumer-driven economy means that your income matters a lot more than you might imagine, and that there are lots of ways to describe that income. One type of income, disposable income, is really the powerhouse for the whole system.

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woman holding fan made of cash — Image source: Getty Images.

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About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

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