A young working couple earned $35,000 last year, and paid $10,000 in taxes. They spent $13,000 on rent, food, insurance, and other "necessities." What is their discretionary income?

Question

Quizplus · Accepted Answer

Discretionary income is the amount of an individual's income that is left for spending, investing, or saving after taxes and personal necessities have been paid. Here, it is calculated as total income ($35,000) minus taxes ($10,000) minus necessities ($13,000), which equals $12,000.

A Young Working Couple Earned $35,000 Last Year, and Paid