Discretionary Income Options

Make the most of your discretionary income

Discretionary income is what you have left after paying your fixed costs. It is yours to spend on whatever you choose.

Objective…
How you spend this money can make a difference to your financial situation, but before that we have to determine what discretionary income is.

Rent / rates

Car operating expenses

Energy

Debt

Groceries, etc.

People who have some type of addiction will prioritize their expenses so that the addiction is included among their fixed expenses.

Everyone, as adults, has freedom of choice unless they are in debt, which means that their freedom is eroding relative to their level of debt.

The old saying, “The borrower is the slave of the lender,” sums it up.

We all have some control over most of our fixed expenses, like food and energy; we can lower them, but with things like fees / rent they are fixed, but even then we can choose to live in a more modest apartment or downsize.

The excess of your expenses is called discretionary income.

Another way to increase your disposable (discretionary) income is to increase your income by landing a part-time job, a higher paying job, or selling things online.

Saving your discretionary expenses for a greater purpose instead of wasting them gives your life meaning. Instead of letting things happen, you are making things happen. Many people in 10-20 years wondered what happened.

There is a big difference between saving your money and investing it. Savvy investors use their discretion to increase their wealth by investing in riskier stocks and shares, gold, and cryptocurrencies. There are enough platforms online that you can drip money into these things if you are still climbing the investment ladder.

But you might want to save for a vacation and check off an item or two on your wish list. Border closures will restrict your choice of venues, but here in New Zealand there are so many great places to visit that it’s an opportunity to discover your own backyard.

Among the most popular activities in New Zealand are landing on the Franz and Fox glaciers, taking a dip in the thermal pools at Hanmer Springs, visiting the Marlborough wine country or attending one of the sports gatherings across the country. One thing I have to mention here is the Tranz Alpine Express train ride between Christchurch and Greymouth. It is rated as one of the best train rides in the world and having experienced it, I do not disagree. It has to be on everyone’s wish list.