Dissaving is negative saving. If spending is greater than disposable income, dissaving is taking place. This spending is financed by already accumulated savings, such as money in a savings account, or it can be borrowed. Household dissaving therefore corresponds to an absolute decrease in their financial investments.

What is an example of dissaving?

For example, a retired person who has saved over a lifetime of work may live comfortably while dissaving. The person has a certain fixed income but spends more every month, dipping into savings to make up the difference. This might be called planned dissaving.

How do you calculate dissaving?

For instance, if income is, say, Rs 5,000 and consumption expenditure is, say 6,000, then saving will be negative, i.e., -1000 (= 5000 – 6000). It is called dissaving. Here average propensity to save is negative. APS = -1000/5000 = -0.2.