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Placeholder Lesson:
** This lesson is generated with AI assistance and approved by Danny Nelson. This lesson will communicate the essence of the topic for now until Danny can create a full lesson. **
A discretionary expense refers to spending on non-essential goods or services that are not required for basic survival or necessities.
These expenses are optional and can be adjusted or eliminated based on an individual's financial situation or priorities.
Common examples include dining out, entertainment, travel, hobbies, and luxury items like designer clothing or subscriptions to streaming services.
In contrast, non-discretionary expenses cover essentials such as rent, utilities, food, and transportation.
Managing discretionary expenses is key to budgeting, as cutting back on them can free up funds for savings or debt repayment.