What is disposable income?
The calculation is simple: your net monthly income, minus your fixed costs. What remains pays for everything that changes from one month to the next — food, clothes, leisure, gifts, small unexpected expenses. It is the real room for manoeuvre in your budget.
It says more than a salary does. Two people earning the same amount can have very different day-to-day lives depending on their rent, their loans or their commuting costs. At equal income, it is what is left over that tells you what you can actually afford.
Lenders look at it closely before granting credit, alongside your debt-to-income ratio: a borrower who keeps a comfortable margin after the monthly repayment is a lower risk. Knowing your figure also means knowing how your application will be read.
Which costs to count, and which to leave out
Count everything that comes round every month and that you cannot cut overnight: rent or mortgage repayment, energy and water, insurance, consumer loans, a travel pass or car costs, phone and internet, subscriptions, any maintenance you pay. If you pay tax separately in monthly instalments, include that too.
Leave out variable spending: groceries, restaurants, nights out, clothes, hobbies. That is precisely what your disposable income has to cover. Counting it as a fixed cost would subtract it twice and underestimate what you really have.
For income, start from the net amount that lands in your account. If it varies, take an average over several months rather than your best month: a figure built on an exceptional month paints too rosy a picture.
Save first, spend afterwards
The calculator lets you enter what you set aside each month. It is not strictly a fixed cost, but treating it as one changes everything: if savings leave at the start of the month, what remains is what you can spend without putting your plans at risk.
It is the opposite of saving whatever is left at month end, which usually ends with nothing set aside at all. Scheduled for payday, a modest but regular transfer is enough to turn saving into a habit rather than an effort.
Finally, look at the daily figure. 900 a month feels abstract; knowing you have roughly 30 a day for everything else makes every spending decision much easier — and lets you treat yourself without guilt when you know it is already accounted for.