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Need To Increase Disposable Income? We Can Help!

Help To Increase Disposable Income

Here are ways to increase disposable income that will help you get some financial breathing room in your budget.

Who wouldn’t want to increase their disposable income? We all could use more dollars to pay down debt, save for buying a home or retirement, or invest in a large purchase you have been waiting to make.

Here is an explanation of disposable income and some suggestions for increasing it.


What is disposable income?

Disposable income is the amount of money left over from your income after you pay federal, state, and municipal taxes. For example, if your income is $100,000 annually and you pay out 25% of that in various taxes, your personal disposable income would be $75,000.

Disposable income shouldn’t be confused with discretionary income. Discretionary income is the amount of disposable income that remains after you pay the necessary expenses for daily living, including food, shelter, and clothing. Therefore, discretionary income is what a person can use for things like iPhones, vacations, and nocha lattes.

Increasing disposable income

People have many options to increase their disposable income, but all of them involve either increasing personal income or decreasing your tax burden…

…Increasing income

When did you last receive a raise? If it’s been a while, it could be time for a chat with your employer.

According to Glassdoor’s first-quarter employment confidence survey, 45% of American workers expect to win a pay increase over the next 12 months. That was up by two percentage points from the fourth-quarter survey results and was the highest proportion of respondents since 2008.

The increase in the number of people who believe they’ll be paid more a year from now stems in part from an improving job market that has more workers believing they could find a new job quickly. Overall, Glassdoor found that 48% of Americans think they could land a similar job and pay within six months if they were let go from their current job.

If a pay raise isn’t in the cards, there are still a few options.

First, a number of websites have popped up, including Elance, that allow people with certain skill sets, such as programming, writing, editing, or creating spreadsheets, to earn extra money by contracting their services to others who lack those skills.

If contract work isn’t your thing, an improving job market offers a growing availability of second jobs, too. According to the Glassdoor survey, 50% of employers initiated large-scale hiring programs in the first quarter. – via The Motley Fool

Two More Ideas for Increasing Disposable Income

There are a number of ways you can increase your disposable income. Get your creative juices flowing to help you bring more dollars home and keep them there!

Here are two more ideas to help you increase your disposable income and improve your financial outlook!

Start a Business

Starting a business, even a small one, is a legitimate way to bolster your income. Much like a raise or second job, running a business will put more demands on your time and require more effort. The difference is that you will see more of the income from your labor because taxation for business owners is a small pinch when compared to the slap that the IRS gives to employees. Some of your business write-offs can even be claimed against other income sources, but you have to follow the rules carefully.

The major drawback of starting a business is that there is no guarantee of success or income like there is with a raise or a second job. Starting a business takes a certain type of person, one with the motivation and the ability to handle the details involved in implementing an idea. The time, effort and nerves that it takes to run a business (that has no certainty of success) means that very few people will take this route…

…Spend Less

The best way to increase your disposable income is to protect the money you earn by spending less. Tightening your budget will take some effort in the form of sacrificing a few luxuries, but the increase to your disposable income will not require longer hours or incur any extra tax. The more after-tax dollars you hold onto, the easier it is to do things like investing to secure more income in the future.

You don’t have to scour the classifieds or create a business model or subscribe to a bunch of financial magazines, you just have to spend less than you are currently making. Earning more may help you, but spending less is the only iron-clad solution to the problem of living paycheck to paycheck and never having enough. – via Investopedia

What ways could you try to increase your disposable income?

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