MANAGEMENT

Detailed explanation-1: -Discretionary expenses are often defined as nonessential spending.

Detailed explanation-2: -A discretionary expense is a non-essential expense that is incurred by an individual, household, or business. Another way to think of discretionary expenses is to classify them as “wants” instead of “needs.” A common example is when an individual purchases a new smartphone whenever the latest edition comes out.

Detailed explanation-3: -Discretionary costs (avoidable costs) are costs or capital expenditures that can be curtailed or even eliminated in the short term without having an immediate impact on the short-term profitability of a business. Examples of discretionary costs include advertising, maintenance, training, R&D, etc.

Detailed explanation-4: -A discretionary expense is voluntary spending. You want to buy something, but it isn’t mandatory. Entertainment and recreational purchases fall into this category. On the other hand, bills such as rent, mortgage payments and utilities are nondiscretionary expenses. You have to pay those.