What is defined as money that individuals or households have saved and not spent?

The correct choice is personal savings because this term specifically refers to the amount of money that individuals or households set aside from their income instead of spending it. Personal savings can accumulate through various means, such as saving a portion of income, earning interest on savings accounts, or receiving monetary gifts. This concept is critical in understanding personal finance, as these savings can be utilized for future expenses, investments, or emergencies.

Net worth represents the total value of an individual's assets minus their liabilities, which does not solely focus on the amount saved but rather the overall financial position. Capital typically refers to financial assets or resources owned by a business that can be used to generate wealth. Discretionary income is the amount of income left after necessary expenses have been deducted, used mainly for non-essential items, and therefore does not accurately describe funds that are saved. Understanding the nuances of these terms helps clarify the specific role that personal savings play in an individual's financial health.