What is meant by spendable income?

Spendable income refers to the amount of money that an individual has available to use after accounting for taxes and unavoidable expenses, such as housing, food, and insurance. This concept captures the notion of disposable income that can be utilized for discretionary spending, saving, or investing. It is crucial for budgeting purposes, as it represents the actual funds one can allocate to various financial goals, lifestyle choices, and unexpected expenses.

The other options do not accurately capture the definition of spendable income. The total income before any deductions does not account for necessary expenses, making it misleading in context. Funds available for emergencies only restrict the idea of spendable income to a specific use rather than encompassing a broader range of spending opportunities. Lastly, the notion of income that cannot be spent directly contradicts the idea of spendable income, which is fundamentally defined by its availability for consumption or saving.