discretionary spending definition:

begin quotes: 

AI Mode

All

Images

News

Short videos

Shopping

Videos

More 

Discretionary spending is money spent on non-essential goods, services, or programs that can be adjusted, reduced, or eliminated at the discretion of the individual or government. Unlike mandatory spending, which is required by law, discretionary spending requires annual approval and can be flexible to meet evolving priorities or economic conditions. Examples include luxury goods for individuals and government funding for programs like transportation and education, contrasting with essential expenses like food, shelter, or legally mandated entitlement programs.  

For Individuals and Households

Definition: Spending money on "wants" rather than absolute needs after essential expenses are covered. 

Examples: Vacations, dining out, hobbies, luxury goods, and upgrading electronics. 

Management: Individuals can reduce or eliminate discretionary spending to save money or pay down debt during financial hardship. 

For Businesses

Definition:
Expenses that are not core to a company's daily operations but are important for growth or specific goals. 

Examples:

Marketing and advertising campaigns, custom product development for clients, and team-building events. 

Management:

Businesses can adjust discretionary spending based on financial constraints or strategic priorities. 

For Governments

Definition:
Funds formally approved by Congress and the President annually to operate government agencies and programs. 

Examples:

Funding for national defense, transportation, education, and scientific research. 

Management:

These funds are subject to annual budget allocation and can be modified to address current needs. 

• Discretionary spending - Wikipedia

  In 2016, the U.S. federal government spent $1.2 trillion on U.S. discretionary spending. Of this $1.2 trillion, nearly half ($584 ...

  

  Wikipedia

• 
• Show all

Dive deeper in AI Mode

Federal Spending | U.S. Treasury Fiscal Data

Discretionary spending is money formally approved by Congress and the President during the appropriations process each year. Gener...

U.S. Treasury Fiscal Data

Discretionary Expense - Definition, Examples, Budgeting

Households and Individuals. An economy is made up of many households and individuals. The economy grows through increased producti...

Corporate Finance Institute