Income
The amount of money spend by a individual on goods and services depends upon the level of income of a person, the main source of income for most of people is wages and salaries
The sources of wages and salaries -:
Interest on savings ( return on capital )
Rent earned from leasing properties ( return on land )
Dividends ( Share of companies profits )
Profit earned from a running business
Disposable Income
Disposable income is amount of money a person spends on goods and service
Its also the money earned by a individual deducting the taxes
Higher levels of disposable income leads to higher savings and spending, when the disposable income is higher the taxes are also higher considering the reduction of large incomes, it reduces
Lower income tend to spend a large proportion to the needs and basic necessity while higher incomes focus on needs and wants
Income Chart
Lower Income
Spending - The individuals with lower income tend to spend most of there income on the necessity of their life style and needs for them
Savings - The saving of people with lower income is mostly gonna be low as there is no more income saved for savings
Borrowing - They borrow due to shortage of income as they need expenditure, in extreme conditions people might borrow to fund expenditure
Middle Income