What Does Discretionary Spending Mean?

What are three examples of discretionary spending?

Some examples of areas funded by discretionary spending are national defense, foreign aid, education and transportation..

Is rent a discretionary expense?

While rent, mortgage payments, and groceries are necessary, discretionary expenses are those you incur voluntarily such as dining out or cable television. Your discretionary spending budget is only as big as the income you have available to fund it.

What are the 4 types of expenses?

You might think expenses are expenses. If the money’s going out, it’s an expense. But here at Fiscal Fitness, we like to think of your expenses in four distinct ways: fixed, recurring, non-recurring, and whammies (the worst kind of expense, by far).

Is eating out a discretionary expense?

Discretionary expenses are non-essential, unlike those for things like housing and insurance. It’s money you can spend on dining out or other niceties because it’s left over after you pay your essential bills. … The money that is left over is your discretionary income.

What is the difference between a discretionary and non discretionary bonus?

What is the difference between a discretionary and a nondiscretionary bonus? For a bonus to be considered discretionary, it should be awarded at the sole discretion of the employer rather than expected to be received by the employees. … A nondiscretionary bonus is the opposite of a discretionary one.

What are discretionary items?

Discretionary income is the amount of an individual’s income that is left for spending, investing, or saving after paying taxes and paying for personal necessities, such as food, shelter, and clothing. Discretionary income includes money spent on luxury items, vacations, and nonessential goods and services.

What is discretionary and nondiscretionary spending?

These categories can be further broken down into nondiscretionary expenses, which are things you can’t do without, such as food and rent, and discretionary expenses, which you can do without (vacations and entertainment).

What is an example of discretionary income?

Discretionary income is what a household or individual has to invest, save, or spend after taxes and necessities are paid. Examples of necessities include the cost of housing, food, clothing, utilities, and transportation.

What is a good discretionary income?

While there are many factors that may affect the percentage of take-home pay that you allocate as discretionary income, the general rule is 30 percent or less.

What is another word for discretionary income?

What is another word for discretionary spending?disposable incomediscretionary incomedisposable personal incomediscretionary expenses

How do you determine discretionary income?

To calculate discretionary income for most student loan repayment plans, the Education Department:Finds the correct federal poverty guideline for your location and family size.Multiplies that number by 1.5.Subtracts that number from your adjusted gross income.

What does discretionary mean?

adjective. subject or left to one’s own discretion. for any use or purpose one chooses; not earmarked for a particular purpose: discretionary income; a discretionary fund.

What is an example of discretionary authority?

Here are a few examples: the Department of Education, Environmental Protection Agency, Federal Elections Commission, and the Securities and Exchange Commission.

What does discretionary spending mean in government?

Discretionary spending is spending that is subject to the appropriations process, whereby Congress sets a new funding level each fiscal year (which begins October 1st) for programs covered in an appropriations bill.

What are non discretionary items?

Non-Discretionary Items means all real estate taxes, insurance premiums and utilities relating to the Property.

What is an example of a discretionary expense?

Discretionary expenses are often defined as nonessential spending or, in other words, wants rather than needs. This means a business or household is still able to run even if all discretionary consumer spending stops. Meals at restaurants and entertainment costs are examples of discretionary expenses.

How much should you have after all bills are paid?

According to the rule, you should be spending no more than 43 percent of your before-tax income on all your debt payments. So, if your gross income per month is $4,000, your total debt including mortgage, auto loans, credit card payments and student loans should be less than $1,720.

How do you spend discretionary income?

Here are five smart ways to invest your tax refund — and reap some big rewards.Pay Off Debt. This is probably the least fun way to spend discretionary income because you won’t have anything tangible to show for it. … Meet With a Fee-Only Financial Planner. … Open a 529 Plan for Your Child. … Invest in Your Home. … Take a Vacation.

What is seller’s discretionary income?

Seller’s Discretionary Earnings (“SDE”) is a calculation of the total financial benefit that a single full time owner-operator would derive from a business on an annual basis. It is also referred to as Adjusted Cash Flow, Total Owner’s Benefit, Seller’s Discretionary Cash Flow, or Recast Earnings.

Who decides discretionary spending?

Discretionary spending refers to the portion of the budget that is decided by Congress through the annual appropriations process each year. These spending levels are set each year by Congress. This pie chart shows how Congress allocated $1.11 trillion in discretionary spending in fiscal year 2015.

What are discretionary funds used for?

Meaning of discretionary fund in English an amount of money that is available to spend on things that are not considered necessary but that may be useful: Governors of some states are given discretionary funds to spend on small-scale projects.