Disposable income: how to calculate what's left to live on

Your salary says little about your real margin. What matters is what's left once every unavoidable cost is paid: your disposable income, or what you have left to live on. It's the number that decides whether you can save, breathe… or face a tight end of every month.

The definition

Disposable income = income − fixed costs.

It's the money available for everything else: groceries, outings, clothes, surprises and savings.

What counts

On the income side (net, monthly):

• Salaries and self-employment income
• Benefits and allowances (housing, family, in-work benefits)
• Pensions, rental income

On the fixed-cost side:

• Rent or mortgage payment
• Other loans (car, consumer credit)
• Energy, water, internet, phone
• Insurance and health cover
• Taxes paid monthly
• Recurring subscriptions, childcare, maintenance paid

Groceries usually aren't counted as fixed costs: they're part of what your disposable income has to cover.

A worked example

A couple with one child:

• Income: €2,400 + €1,900 + €140 in benefits = €4,440
• Mortgage: €1,150
• Car loan: €220
• Energy, internet, phones: €230
• Insurance and health cover: €190
• Childcare: €300
• Subscriptions: €60

Fixed costs: €2,150. Disposable income: €2,290, about €760 per person for groceries, leisure and savings.

What amount to aim for

There's no universal threshold: it depends on the city, the household size and the lifestyle. A few benchmarks:

• Lenders look at your debt-to-income ratio and at what's left after repayments. In France, for example, mortgage lenders generally cap debt payments at 35% of income, insurance included.
• For your own comfort, a good test: does your disposable income cover groceries, everyday spending and at least 10% savings? If yes, your budget can breathe.

How to raise your disposable income

Two levers: income or fixed costs. Fixed costs are usually the fastest to work on:

• Renegotiate your contracts: car and home insurance, health cover, phone plans. One comparison a year is enough.
• Clean up your subscriptions: streaming, gym, apps.
• Check your entitlements: housing and in-work benefits are often under-claimed.
• Consolidate or renegotiate loans when rates allow.
• Work on housing over the long run: it's almost always the biggest item.

Disposable income and your budget

Disposable income is the starting point of any budget. Once you know it, split it between wants and savings, for example with the 50/30/20 method or zero-based budgeting. For a first calculation on paper, our Excel budget template does the job.

With Trya

If you've entered your monthly income, Trya's fixed-expenses screen (TRYA+) shows your disposable income directly: your income minus the total of your fixed costs. Auto-detection spots your recurring payments in one tap, and each charge is converted to its monthly equivalent (a yearly insurance counts for a twelfth). The Budget tab then shows what you have left to spend this month.

Frequently asked questions