News Room


29th September 2012
Discretionary Income

We end this month’s series on personal finances and lending terms with a term, which is relevant to everyone. This week’s term: Discretionary Income.

 
Discretionary income is the income/earnings remaining after taxes and basic expenses (rent or mortgage payments, utilities, and food) are paid. It is the amount that is available from an individual’s income for spending after the essentials have been taken care of. Discretionary income can therefore be simplified as gross income minus taxes and necessities.
 
 
What does this mean for you?
The amount available to you to invest, save, or spend for that matter, depends on the amount of discretionary income you have. Therefore, it is important that before deciding on a savings or investment plan, you ensure that adequate discretionary income is available to enable you to stick to this plan. It is also important to put as much of your discretionary income into savings rather than spending on things that you do not really need. This practice will definitely reap dividends in the future. A proactive way to determine how much you have available as discretionary income is by preparing a budget. Therefore, it is imperative that everyone prepares a budget, irrespective of how much money you earn monthly. For more information on how you can use your discretionary income for savings, investments and loan opportunities call Bank of Saint Lucia at 456-6000.


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