Discretionary Spending

Discretionary spending refers to the portion of an individual's income that is spent on non-essential items. This includes expenses on entertainment, luxury goods, hobbies, dining out, travel, and other activities or products that enhance one's lifestyle but are not necessary for daily living. Unlike mandatory spending, which covers essential needs like housing, food, and healthcare, discretionary spending is often the first to be adjusted when budgeting or during economic downturns. Understanding your discretionary spending habits can help in better managing finances and ensuring that essential needs are met while still enjoying the pleasures that life has to offer.