What is an example of discretionary income?

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

What is discretionary example?

adjective. The definition of discretionary is something that you use as desired or needed. When you have petty cash available to you to use, the money you spend is an example of discretionary spending.

What is included in discretionary income?

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 an example of a discretionary purchase?

Discretionary spending refers to non-essential items, such as recreation and entertainment, that consumers purchase when they have enough income left over after paying the necessary expenses such as the mortgage and utilities.

What are 2 examples of discretionary spending?

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

What is a good discretionary income?

A well-known guideline on how to divide your income across necessities, savings, and discretionary spending is the 50-20-30 rule. This has you designating 50% of your income on necessities, 20% on savings, and 30% on everything else.

Is welfare a discretionary spending?

Discretionary spending does not include expenses for Medicare, Medicare, TANF, and other mandatory programs. By law, these are fixed expenses of the government budget.

What is an example of a discretionary item in the federal budget?

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.