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Conflicting Explanations ...?

Submitted by eaglebqh on 22 October 2009 - 11:38am

I found what seem to me to be conflicting explanations in the Forum regarding disposable income.

#1..."Your disposible income for each year is the 'consumption' figure in total spending"

#2... "Std of Living is 'Disposable Cash' after all Bills are paid"

Even though the verbage is not identical - aren't they addressing the same question (i.e., "how much do I have left over"?), and if so isn't that two different answers to the same question? Or what am I missing?

I'm not really trying to be picky but trying to understand which is which ...

Thnx

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Submitted by Dan Royer on 22 October 2009 - 3:59pm.
1

What ESPlanner calls consumption is displayed in the consumption column in the Annual Recommendation report (also in the total spending report). This is discretionary spending, meaning--spending that goes on after the off the top expenses like housing. It's what we pay our monthly bills with and go out to eat with.

We often refer to "living standard" as that number in the right-most column of the Annual recommendations report. This is "consumption" number scaled to the size of the household (to account for spouse and children). So essentially it means the same thing. It's just scaled.

I think consumption is best understood by looking at the Total Spending report and noticing that the consumption is what is left over after you subtract all of the other numbers in the report. That is, all columns but "consumption" represent off the top expenses.

Hope that helps a little.

Dan

Submitted by eaglebqh on 23 October 2009 - 8:32am.
2

Thanks for the help Dan

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