Question

What is non-discretionary spending? Define and give examples.

Answer 1

For any business or person there are two type of spending that are discretionary and non discretionary spending

Both are differentiated by terms want and need

The want is used for discretionary spending and need is used for non discretionary spending

Discretionary spending is that spending which are integral part of the life like travelling, eating in restaurant, spending time with children

The non discretionary spending comes under the need category

Non discretionary spending is also called mandatory spending

For example day to day living expenses like rent, gas, petrol, taxes, insurance and healthcare etc