what does discretionary income mean 
the term discretionary income refers to the total income left after a household or business pays for necessities including taxes housing groceries and utilities this type of income is used to maintain a certain standard of living or operations as such discretionary income can be used to pay for things like vacations luxury items and savings the bottom linecosts are divided into several categories some are essential while others are not the first which includes essential and mandatory items are called non discretionary expenses this is contrasted to discretionary expenses these costs are deemed non essential such as vacations luxury goods and nights out discretionary spending happens when all non discretionary costs are covered keep in mind that these are needs and can be sacrificed when times get tough 