What Is Discretionary Spending? How You Can Reduce It and Save More
FRUGAL LIFESTYLE - SAVE MONEY - COUPON CODES
Published On: July 13, 2023
Whenever it is time for pay day, you might want to buy that expensive wallet or that sofa you had been eyeing for the whole month. Doing so is known as discretionary spending.
When making expenses, there are needs and then there are wants. The main difference between them is that your needs consist of expenses which are vital to your survival, for example basic transportation and food.
However, wants are usually associated with luxury items which are considered more as a personal purchase than a need, and this is where discretionary spending comes in.
Current Projections show that discretionary spending can reach an astounding $2.4 trillion by the year 2033!
Discretionary spending is one of the main reasons for a lack of finance management and proper budgeting, but the good news is that there are ways to reduce it and save more money.
Let us explore this in greater detail, understanding the concept of discretionary spending in further detail, exploring ways on how you can reduce discretionary spending and save quite a lot of your income as well.
What Is Discretionary Spending?
To be precise, the expenses that you make from the funds that you have left over after covering all of your necessities is known as discretionary spending.
Necessities cover expenses including rent, groceries and the entirety of your utilities as well. Spending your income by making purchases that are not essential to your life, such as going to the movies or buying designer clothes are known as discretionary spending.
Unlike spending money on the essentials, discretionary expenses do not cover a set amount.
There might be a month when you may be spending just a small portion of your income on discretionary spending going to the movies or hanging out with your friends. However, there might be a month when you may travel somewhere, burning through your money because of discretionary spending.
Reducing Discretionary Spending
Discretionary spending is dangerous, as we never know when it might creep up into your thought process. It may be the desire to keep up the current trends, or a specific product that caught your attention, and before you know it, your hands will be in your wallet, and you will be making a huge discretionary purchase.
Luckily, there are several ways to reduce this and save up as much of your funds as possible.
• Delay the Big-Ticket Expenses
If you are saving up to make a big purchase soon, such as a new car or putting the lease down on a new house, consider giving it some more time so that you can reach the cash reserve goal which you have set for yourself.
You might be itching to make the big non-essential purchase you are saving money for, but a cash reserve is key to financial stability, which should be your top priority.
• Track your expenses
Keeping track of your expenses is essential to reduce discretionary spending and save money, because monitoring your purchases helps you determine where you are spending how much of your non-essential funds.
This is the first step to saving up because it can help you understand your spending so that you can gradually reduce your discretionary spending, chipping away at one purchase at a time.
Nowadays, a simple internet search can give you access to thousands of coupons
that can provide you with amazing discounts, making it the best option for saving money.
By couponing, not only are you potentially reducing your discretionary spending by quite a bit, but you are also going to save up on your essential expenses like groceries, making it a perfect fit for all those who are looking to reduce their non-essential expenses while saving money.
• Prepare a grocery list
Have you ever gone grocery shopping with the intention to simply buy milk and bread, but somehow ended up with the cart full of snacks and other non-essentials?
This is impulse buying and puts a heavy dent on your expenses whenever you go for your groceries. However, there is a way to make sure you do not give in to your impulses and save money in the long run.
Whenever you go out for groceries, prepare a list of essentials you need beforehand. This will provide you with a set of items to stick to, preventing impulse buying.
Discretionary spending can put a huge dent into your wallet, and the unpredictability of these expenses is what makes it so dangerous. However, following these tips and tricks will allow you to save up and cut down on those pesky discretionary expenses in no time!