Disposable income

Incomes – it is the amount of wealth and money made or received for a certain period of time. The role of income is that level of consumption depends on the size thereof.

Cash income includes all financial income in the form of wages, business income, various benefits, pensions, stipends, from property, interest on deposits, rents, dividends, profits from sales of securities, services rendered and so on.

The Level of income is an important indicator of the welfare of members of society, because it defines the possibilities of spiritual and material life of the individual: good education, recreation, satisfaction, and health care.

For the analysis of incomes and their dynamics are based on measures such as nominal, real and disposable income. Let's consider them in more detail.

The nominal income is an absolute amount of income, of pensions, of the salaries expressed in current prices.

Disposable income-the amount that can be used on personal savings and consumption. To measure the dynamics of the key figure for real disposable income, which is calculated based on the price index. Thus, if you want to calculate disposable income, the formula is: disposable income = nominal income-taxes-obligatory payments.

Real income includes the amount of goods and services that the consumer will be able to purchase within a certain period of time on disposable income. In other words, adjusted for the dynamics of the price level, that is, the quotient of disposable income by the consumer price index.

There is also another definition of the concept, according to which it is understood as part of the national income, is designed to meet the needs of the population and created in the production process. Thus, gross national disposable income has to compensate labor expenses, that is, all mental and physical abilities of the population that was spent in production.

However, in modern society there is unequal distribution of national income. As a result, some categories of the population resources are insufficient to maintain vitality at the desired level. In this case, the state is forced due to the budget, and entrepreneurs by their own profits to replenish the finances of the population and thereby increase disposable income.

At each stage of the life of the citizen and his family has different possibilities to get funds. At each stage they have their needs, they face the appropriate life stages of the task. And they strive to meet the needs in different ways.

Disposable income depends on lifestyle, class, disability, health, market opportunities, market conditions, labour market, risk situation and other factors.

Belonging to a social class requires a citizen to lead a certain way of life inherent in itself. To ensure the ability to act according to the axiological concepts, to meet the needs and interests requires a certain level of income.

Sustainable consumption is achieved by the accumulation of funds, creation of funds and their redistribution. Those surpluses, which were established in favorable years, are redistributed and are then used in less profitable periods. This allows us to satisfy the needs of the population and to maintain a stable standard of living.