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What is considered discretionary spending?

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 is an example of discretionary spending quizlet?

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 is discretionary example?

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.

Which of these is an example of discretionary spending?

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

Are groceries fixed or discretionary?

To determine whether something is a discretionary expense, consider whether it’s a want or a need. 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.

Are car payments discretionary?

Disposable income is the money you have available to spend after your employer withholds taxes from your paycheck. It doesn’t account for any necessary bills you have like rent or car payments. Discretionary income is your remaining money available after subtracting necessary bills from your income.

What is discretionary spending in government?

Discretionary spending is money formally approved by the President and voted on by Congress during the appropriations process each year. Generally, a majority of the discretionary spending is budgeted towards national defense.

What is the largest category of discretionary spending identify three additional examples?

Explanation. The largest category of discretionary spending is defense spending, which accounts for about half of all the federal government’s discretionary spending. Other examples of discretionary spending are spending on education, scientific research, and law enforcement.

What is the largest category of discretionary spending?

The largest category of discretionary spending is defense spending, which accounts for about half of all the federal government’s discretionary spending.

Is clothing a discretionary expense?

Clothes. While clothes do service a function and meet basic living needs, they are also a prominent category for discretionary spending.

What are non discretionary expenses?

Expenses are split into two categories – discretionary and non-discretionary. In simpler terms, non-discretionary expenses are those that are necessary to be incurred, also called as needs such as utilities, groceries, mortgage, taxes, etc.

What are some examples of mandatory and 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.

Is a phone bill a discretionary expense?

Like there are different types of finance, discretionary expenses can take many forms and may include: Electronics, such as a television or a phone upgrade.

Is rent a discretionary expense?

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.

Is a cell phone bill a fixed expense?

Fixed expenses are consistent and expected bills you pay each month, such as a mortgage or rent, a cellphone bill and a student loan payment. Car insurance, home insurance and life insurance are also fixed payments, along with your monthly electric and water bills.

Is food a discretionary expense?

Non-discretionary spending is essential and non-negotiable spending defined within a budget. What are Non-Discretionary examples? Examples of these expenses include: rent, food, or mortgage payments. In contrast, discretionary spending refers to non-essential expenses, such as hobbies and travel.

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.

Is gas a discretionary expense?

Although variable costs are quite often discretionary expenses, some may be necessities. Buying gas for your car each month is a variable expense, as are car repairs and maintenance. Grocery shopping is also a variable expense.

What are the 4 types of expenses?

Terms in this set (4)

  • 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 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.

Is the military discretionary spending?

Defense spending accounts for more than 10 percent of all federal spending and nearly half of discretionary spending. Total discretionary spending — for both defense and nondefense purposes — is typically only about one-third of the annual federal budget.

Is national defense discretionary spending?

The United States federal budget consists of mandatory expenditures (which includes Medicare and Social Security), discretionary spending for defense, Cabinet departments (e.g., Justice Department) and agencies (e.g., Securities & Exchange Commission), and interest payments on debt.

What is the smallest share of the discretionary spending?

Under those projections, in 2023, defense and nondefense discretionary spending would each equal 2.6 percent of GDP—the smallest share of the economy for either category in at least five decades.

What can discretionary funds be used to pay for?

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 the difference between discretionary and non discretionary spending?

While non-discretionary expenses are considered mandatory—housing, taxes, debt, and groceries—discretionary expenses are any costs incurred above and beyond what is deemed necessary. These are generally considered wants, while non-discretionary expenses are usually referred to as needs.

What are non discretionary products?

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.

Are groceries a fixed or 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.

What are discretionary goods?

Discretionary products are any goods that are not necessary and thus not required to enjoy basic living conditions. In contrast, those products that are necessities of life such as food, drugs, medical supplies, hygiene or personal care products, often classified as consumer staple.

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

The following can be considered discretionary fixed costs: Advertising campaigns. Employee training.

Are clothes fixed or variable?

Variable expenses represent those daily spending decisions like eating at restaurants, buying clothes, drinking Starbucks, and playing a round of golf with your buddies. These costs are not considered variable because they’re discretionary.

Is rent a fixed or variable expense?

Examples of fixed expenses include: Rent or mortgage payments. Car payments. Other loan payments.

Is housing a fixed or variable expense?

Examples of Fixed Expenses

Fixed expenses can include essential expenses, such as those needed to maintain a basic standard of living each month. Some of the most common fixed expense samples include: Rent or mortgage payments. Renter’s insurance or homeowner’s insurance.

What percentage of discretionary spending is spent on education?

Education spending for elementary, secondary and higher education is projected to account for 6 percent of total federal discretionary spending in fiscal year 2015, a figure that has held roughly constant for decades despite consistent polling that shows education is a top priority for most Americans.

What items are considered part of discretionary uncontrollable spending?

Discretionary spending, set in annual appropriations acts, includes most defense programs as well as spending for education, transportation, environmental protection, law enforcement and border security, international assistance, and a host of other programs.

What are the 3 types of spending?

That spending can be divided into three categories: mandatory, discretionary, and interest.

Mandatory vs. discretionary spending in Congress

Discretionary and mandatory outlays of the US federal

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Tommy E. Junkins

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