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 an example of a discretionary spending?
Non-defense discretionary spending includes a wide array of programs such as education, training, science, technology, housing, transportation, and foreign aid.
What can discretionary funds be used for?
Answer: Discretionary funds are used for spending, investing, or saving after paying taxes and paying for personal necessities, such as food, shelter, and clothing. Explanation: Discretionary income incorporates cash spent on extravagance things, excursions, and unnecessary merchandise and ventures.
Which of the following is an example of government discretionary spending?
Some examples of areas funded by discretionary spending are national defense, foreign aid, education and transportation.
Who determines 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 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. Mandatory spending is simply all spending that does not take place through appropriations legislation.
What does discretionary funding mean?
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.
What types of items will your discretionary spending cover?
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 mandatory and discretionary spending?
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.
What are three examples of discretionary expenses?
Some common discretionary items include:
- Vacations and travel expenses.
- Automobiles.
- Alcohol and tobacco.
- Restaurants and other entertainment-related expenses.
- Coffee and specialty beverages.
- Hobby and sports-related expenses, such as crafting, sewing, and gym memberships.
Is discretionary spending a fixed expense?
Know The Definition of Fixed Expenses It’s much easier to budget for fixed expenses than it is to budget for a variable expense or discretionary expense. Typical household fixed expenses are mortgage or rent payments, car payments, real estate taxes and insurance premiums.
What are some examples of discretionary spending?
How do you explain fixed expenses?
The definition of fixed expenses is “any expense that does not change from period to period,” such as mortgage or rent payments, utility bills, and loan payments. The amounts may vary slightly, which may be the case with utilities, but you know they are due on a regular basis.
What are discretionary, variable, and fixed expenses?
Budgeting Discretionary, Variable, and Fixed Expenses. Discretionary expenses are recurring or non-recurring costs for non-essential items or services. Although these can be somewhat subjective in nature, discretionary expenses are often viewed as “wants” rather than “needs.”.
What are some good examples of fixed costs?
Amortization. This is the gradual charging to expense of the cost of an intangible asset (such as a purchased patent) over the useful life of the…
Is it necessary to spend money on fixed expenses?
Spending money on these expenses is optional, and unnecessary to maintain your health or safety. If sticking to your budget is challenging because you’ve already slashed discretionary expenses, consider cutting fixed costs to help you stick with your financial plan.
What’s the difference between personal fixed expenses and advertising?
In fact, advertising is a strategy that changes with time and may generate demand such that it is variable. Personal fixed expenses are recurring costs that are a predictable and stable amount. These include both non-discretionary expenses such as rent and fixed price discretionary expenses such as a streaming media service.
