discretionary income

Discretionary Income

The amount of an individual's income that is left for spending after the essentials have been taken care of.

Investopedia Commentary

Essentials are things like food, clothing and shelter. Although some might consider Chai Lattes and the latest People magazine to be necessary, they are not essentials.

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See also: Disposable Income, Personal Income

discretionary income

Individual income that is not allocated to expenditures for necessities such as food and shelter. Increasing amounts of discretionary income are especially favorable for the prospects of firms that sell luxury or leisure items and services.