Have you ever used a common term or phrase without thinking about what the words mean? Do the words we use to describe things matter? Can the words we use to describe things affect our attitudes about them, and even our actions?
I have been thinking a lot about these questions since coming across the term disposable income in the book Your Money or Your Life, by Vicki Robin and Joe Dominguez. Although it has a different meaning in economics, according to Wikipedia the common usage of the term is “the amount of ‘play money’ left to spend or save” after all our bills are paid.
Robin and Dominguez believe the use of this term reflects the low priority we, as a society, place on saving. They summarize the attitude conveyed by the term, stating, “What else would you do with ‘disposable income’ besides dispose of it – we certainly wouldn’t want to keep it around where it would just rot!”
A new study by interest.com provides evidence of the low priority we place on saving. The study, using data from the Bureau of Labor Statistics, found that families earning the median income in nearly all the large American cities studied would have a significant amount of disposable income if they simply limited spending to their city’s median cost of living. In spite of this the median savings rate in each of the cities studied was zero. In other words, most people were successfully disposing of every bit of their disposable income.
This got me thinking about how we could rebrand disposable income to promote the benefits of saving instead of spending. My first thought was to call it savable income or investable income. Both are definite improvements, but they didn’t quite do it for me.
My next thought was the question, “Why do we save or invest?” This led to faith-in-the-future income and hope-for-a-better-tomorrow income. Nice thoughts, but a little cumbersome and not concrete enough for me.
The word I kept coming back to was freedom. This led to more questions: “Freedom from what?” and “freedom to do what?”
Then I remembered a Prudential TV commercial where the narrator asks people, “If you could get paid to do something you really love, what would you do?” The answers were as diverse as the people giving them. The conclusion is that retirement should be “paying ourselves to do something we love.”
I really like that thought and combined it with my earlier thinking to arrive at the phrase, freedom-to-do-what-you-love income as a replacement for disposable income. This conveys the importance of saving and the benefits that come from it. Instead of simply disposing of our income we can choose to use it to purchase the freedom to do what we love in the future.
While I like the idea this conveys, freedom-to-do-what-you-love income doesn’t exactly roll off the tongue. I am sure it can be improved on. What ideas do you have for replacing the term disposable income? You can suggest improvements along my line of thinking or go in a totally different direction. I would love to hear everyone’s thoughts and suggestions.