They include such expenses as rent, insurance, dues. Fixed Monthly Expenses Mortgage/Rent Health Insurance Car Insurance Home Owners or Renters Insurance Cable or other TV subscription Phone Cell Phone. As such, discretionary expenses rarely have anything to do with a business or household's day-to-day operations and, instead, have to do with lifestyle and choice. Fixed expenses or costs are those that do not fluctuate with changes in production level or sales volume. In personal budgeting, a flexible expense is a non-essential expense that can be cut back or eliminated. These are generally considered wants, while non-discretionary expenses are usually referred to as needs. While non-discretionary expenses are considered mandatory-housing, taxes, debt, and groceries-discretionary expenses are any costs incurred above and beyond what is deemed necessary. Variable expenses are discretionary and can be modified by your financial behavior. Discretionary expenses vary depending on the business or person.Įxpenses are divided into several categories, namely non-discretionary and discretionary. Periodic expenses also occur in predictable amounts and intervals, but are much less frequent (i.e.Period costs are not directly tied to the production process. They differ from fixed expenses in that the company may make these payments on a quarterly or annual basis rather than on a monthly basis. Period costs are all costs not included in product costs. Tracking discretionary expenses enables businesses and households to identify where they can save money in times of financial difficulties. Periodic expenses are any payments where the amount is constant, similar to a fixed expense.In a corporate environment, discretionary expenses are usually costs linked with improving a company’s reputation among its customers and employees.A discretionary expense is a cost that is not essential for the operation of a home or a business.
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