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.
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Why is eating out a discretionary expense?

Thus, the cost of the meal is considered to be a discretionary expense, as the choice to dine out was decided at the discretion of the consumer. … Basically, any expense for goods and services that are not used in the essential day to day operations of the business would be classified as a discretionary expense.

What are examples of discretionary costs?

Discretionary costs (avoidable costs) are costs or capital expenditures that can be curtailed or even eliminated in the short term without having an immediate impact on the short-term profitability of a business. Examples of discretionary costs include advertising, maintenance, training, R&D, etc.

What types of items will your discretionary spending cover?

Discretionary spending – 30%: Thirty percent of your budget is for anything you want but wouldn’t say you need. It would cover all of your non-necessities, such as entertainment and travel.

What are discretionary funds?

discretionary fund. noun [ C ] FINANCE. 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.

Which of the following is an example of a discretionary fixed expense?

Examples of discretionary fixed costs include advertising, research, public relations, management development programs, and internships for students. Discretionary fixed costs can be cut for short periods of time with minimal damage to the long-run goals of the organization.

What are 4 examples of discretionary spending?

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

What are non-discretionary items?

Non-Discretionary Items means expenditures payable by the Partnership for taxes, utilities, insurance, debt service and expenses or other amounts required to be paid by the Partnership under contracts or agreements of the Partnership.

What type of expense is groceries?

Discretionary Expenses You need food, but you don’t need it to come from a restaurant. So, groceries are a variable expense, but dining out is a discretionary expense. Examples include: Entertainment.

What is included in the non-discretionary spending?

Within the U.S. budget, non-discretionary spending is referred to as mandatory spending and includes spending on social service programs, such as social security, Medicaid and Medicare. Funding for research and defense is considered discretionary spending.

Is Internet a discretionary expense?

Therefore, the cost of internet would be a discretionary cost for the retail store even though it is not for the cloud storage company. This is also true in personal finance. A discretionary expense for an individual might be a morning coffee.

What is the largest category of discretionary spending?

By far, the biggest category of discretionary spending is spending on the Pentagon and related military programs.

Which category is an example of discretionary spending?

Discretionary spending is what the President and Congress must decide to spend for the next fiscal year through annual appropriations bills. Examples include money for such programs as the FBI, the Coast Guard, housing, education, space exploration, highway construction, defense, and foreign aid.

What are discretionary services?

Discretionary Services means opening/closing positions and/or placing/modifying/deleting Orders on behalf of a customer on a discretionary basis and any and all other actions that may be undertaken by a customer under the Client Agreement that the Introducer carries out on the customer’s behalf.

What are the two categories of discretionary spending?

Totaling about one-third of the federal budget, discretionary spending programs can be further divided into two categories: defense and non-defense.

What is a fixed discretionary expense?

A discretionary fixed cost is an expenditure for a period-specific cost or a fixed asset, which can be eliminated or reduced without having an immediate impact on the reported profitability of a business.

Which expense is considered a fixed expense?

Fixed expenses or costs are those that do not fluctuate with changes in production level or sales volume. They include such expenses as rent, insurance, dues and subscriptions, equipment leases, payments on loans, depreciation, management salaries, and advertising.

Is are an example of a committed fixed cost expense?

Fixed costs can be further identified as: Committed fixed costs: These are multiyear organizational investments that cannot be easily changed. Examples of committed fixed costs include investments in assets such as buildings and equipment, real estate taxes, insurance expense and some top-level manager salaries.

What is consumer discretionary spending?

What Is Consumer Discretionary? Consumer discretionary is a term for classifying goods and services that are considered non-essential by consumers, but desirable if their available income is sufficient to purchase them.

What is an example of a flexible expense?

Flexible expenses are any non-essential cost that can be changed, reduced, or eliminated to help balance your budget. … Flexible expense examples include groceries, dining out, entertainment, and even utilities.

What is discretionary vs non discretionary?

A discretionary account is an account that gives an investment adviser the authority to make individual trades without the consent of their client. A non-discretionary account is an account where the client always decides whether or not to conduct a trade.

Which two expenses are considered variable non discretionary expenses?

  • Food.
  • Utilities.
  • Entertainment.
  • Vacations.
What is discretionary capital?

Discretionary Capital means the proceeds of any issuance of Equity Interests of the Borrower permitted by this Agreement or any Debt permitted under Sections 9.02(c) or (m) of this Agreement.

Is food a fixed expense?

Grocery shopping is also a variable expense. Your utility bills may also be variable expenses because they may change from month to month. … Variable expenses may be harder to cut back on than fixed expenses because they can affect your lifestyle.

What are personal discretionary expenses?

What are discretionary expenses? A discretionary expense is voluntary spending. You want to buy something, but it isn’t mandatory. Entertainment and recreational purchases fall into this category. On the other hand, bills such as rent, mortgage payments and utilities are nondiscretionary expenses.

What are 4 types of expenses?

  • Variable expenses. Expenses that vary from month to month (electriticy, gas, groceries, clothing).
  • Fixed expenses. Expenses that remain the same from month to month(rent, cable bill, car payment)
  • Intermittent expenses. …
  • Discretionary (non-essential) expenses.
What are expenses examples?

  • Cost of goods sold.
  • Sales commissions expense.
  • Delivery expense.
  • Rent expense.
  • Salaries expense.
  • Advertising expense.
Are groceries variable expense?

Variable expenses are costs that change over time, such as groceries or movie tickets. Because these costs might fluctuate over a week, month or year, it can be challenging to pinpoint what you’ll spend.

Is social security discretionary spending?

The discretionary budget and taxes are the two main tools of discretionary fiscal policy. The discretionary budget does not include Social Security, Medicare, or Medicaid. These are part of the mandatory budget. These programs were authorized by previous Acts of Congress.

What is an essential expense?

While essential expenses are every expense related to living, non-essential expenses are usually the expenses that you don’t necessarily need. For example, expenses such as rent, mortgage, utilities, groceries, or medication are essential ones that you need to pay for living.

What are the 5 largest federal expenses?

Major expenditure categories are healthcare, Social Security, and defense; income and payroll taxes are the primary revenue sources.

What is one example of mandatory spending an example of discretionary spending?

For example, the administrative expenses associated with running the Social Security Administration generally are funded with discretionary spending, but the benefit checks sent to retirees and disability recipients enrolled in Social Security programs are classified as mandatory spending.

What are the three largest discretionary items in the federal budget?

Discretionary Spending The largest of these programs are Health and Human Services, Education, and Housing and Urban Development.

What does discretionary mean in business?

A discretionary expense is a cost that a business or household can survive without, if necessary. Discretionary expenses are often defined as nonessential spending. This means a business or household is still able to maintain itself even if all discretionary consumer spending stops.

What is discretionary basis?

Discretionary things are not fixed by rules but are decided on by people in authority, who consider each individual case.

Do you have to pay a discretionary charge?

Discretionary service charge Discretionary means optional so if you’re not happy with the service or think the tip is more than you’d like to pay, you don’t have to pay it! The easiest way of avoiding a scene is to hand over your card or cash and inform the waiting staff how much you are paying.