Discretionary spending is the part of your budget where you have a choice.
Direct answer
Discretionary spending is money you spend on wants rather than needs, such as dining out, entertainment, hobbies, travel and new gadgets. Non-discretionary spending covers essentials like housing, utilities and basic food. Setting a limit on discretionary spending lets you enjoy it without guilt.
Examples
| Discretionary | Non-discretionary |
|---|---|
| Takeaways and restaurants | Rent and utilities |
| Streaming services | Basic groceries |
| Hobbies | Transport to work |
| Holidays | Health costs |
| New clothes | Minimum debt payments |
How to manage it
- Total last month's wants.
- Set a monthly limit that fits your goals.
- Use a separate account or card for it.
- Decide your top three treats and prioritise them.
See the 50/30/20 rule for one way to size this.
Where Teyro fits
Teyro's Needs vs. Wants: Making Better Spending Decisions course turns this into short lessons you can play in a few minutes a day. It has 50 lessons, and you can start free.
The bottom line
A fun budget with a limit is better than a vague guilt.
This is general education, not personal financial advice.
