Discretionary expense

Discretionary expense,

Definition of Discretionary expense:

  1. The term discretionary expense refers to a cost that a business or household can get by without, if necessary. Discretionary expenses are often defined as nonessential spending or, in other words, wants rather than needs. This means a business or household is still able to run even if all discretionary consumer spending stops. Meals at restaurants and entertainment costs are examples of discretionary expenses.

  2. Expenses are divided into several categories, namely non-discretionary and discretionary. While non-discretionary expenses are considered mandatory—housing, taxes, debt, 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. As such, discretionary expenses rarely have anything to do with a business or household's day-to-day operations and, instead, have to do with lifestyle and choice.

  3. An account to record unusual purchases or fees for the course of business operations. For example, a meal at a 4-star restaurant for a prospective client.

How to use Discretionary expense in a sentence?

  1. Tracking discretionary expenses enables businesses and households to identify where they can save money in times of financial difficulties.
  2. A discretionary expense is a cost that is not essential for the operation of a home or a business.
  3. Discretionary expenses vary depending on the business or person.
  4. In a corporate environment, discretionary expenses are usually costs linked with improving a company’s standing with its customers and employees.

Meaning of Discretionary expense & Discretionary expense Definition