On the calculation of disposable income

So I’m reading Robert Samuelson’s column in today’s Washington Post. In it he mentions that the savings rate in the United States dropped from 4.8% (1996) of disposable income to 1% (2000).

And that got me wondering where the Chance family fits on that curve. We have an automatic savings plan. Yanks it right out of our checking account (at one bank) and drops it into a savings account (at our broker). That cash goes into a money market and when it accumulates a certain level it’s invested. Suits me and my broker and we’ve NEVER had to access it. (Side note: Turning down the ATM card and checkbook on the money market account confused my broker but prevents us from having easy access to the savings.)

So I can determine how MUCH money per month or year that we’re saving. What I’m uncertain of is how to calculate disposable income. There seems to be roughly one thousand different ways to get there. Do I just include net monthly income? Or is it net income less mortgage? Or less net mortgage and average utility bills and food? Gasoline? What?

Oh my aching head. Answers would be much appreciated.

Personal disposable income is defined as total income minus personal tax and nontax payments to local, state, and federal governments. Personal taxes include income taxes, gift taxes, inheritance taxes, and taxes on movable property, but they exclude sales taxes and real estate taxes. Nontax payments include fines. See http://eslmi98.esc.state.nc.us/navigator/research/workingpoor/GLOSSARY.htm