Making the most of your discretionary income
Discretionary income is what you have left over after paying your fixed costs. It is yours to spend on whatever you choose.
But….
How you spend this money can make a difference to your financial situation, but before this we have to ascertain what is discretionary income.
Rent/rates
Car running expenses
Power
Debt
Groceries etc.
People who have an addiction of some kind will prioritise their spending so that the addiction is included among their fixed expenses.
Everyone as an adult has freedom of choice unless they have debts which means their freedom is being eroded away in relation to their level of debt.
The old Proverb, “The borrower is a slave to the lender,” sums it up.
We all have some control over most of our fixed expenses such as groceries and power;we can cut down on these but with items such as rates/rent are fixed but even then we can choose to live in a more modest apartment or downsize.
The excess to your expenses is called discretionary income.
Another way of increasing your disposable (discretionary) income is to increase your income by getting a part time job, getting a higher paying job, or selling stuff online.
Saving your discretionary spending for some greater purpose instead of frittering it away gives your life some meaning. Instead of just letting things happen you are making things happen. Many people in 10-20 years time wondered what happened.
There is a major difference between saving your money and investing it. Astute investors use their discretion to increase their wealth by investing in higher risk stocks and shares, gold, and cryptocurrency. There are enough online platforms where you are able to drip feed money into these things if you are still climbing up the investment ladder.
If you are interested in investing in gold then check out the site below:
https://affiliates.goldco.com/l/1VRW1MU2Q/
The important thing to remember is that because you are using discretionary income you can fully afford to lose this money.
But then you may prefer to save for a holiday and tick off one or two items on your bucket list. The border closures will restrict your choice of places but here in New Zealand there are so many fantastic places to visit it is an opportunity to discover your own backyard.
New Zealand has some of the world’s most stunning scenery.
Photo: Franz Josef Glacier
