7 Examples of Discretionary Expenses

John Spacey, June 24, 2020

Discretionary expenses is a category of business and consumer spending that can be easily cancelled or deferred. This type of spending is often cut back when consumers and businesses are feeling less optimistic about their future economic prospects. The following are common types of discretionary expense with examples of each.

Durable Goods

Consumer goods that last longer than 3 years such that upgrades and improvements can easily be deferred. For example, a consumer who foregoes upgrading their television when they anticipate layoffs from their employer.

Appliances	Electronics
Furniture	Vehicles

Business Capital

Business capital is property that generates long term value for a business. Businesses often cut back on capital spending in response to a recession or industry downturn. For example, an airline that stops replacing older aircraft during a recession.

Equipment	Facilities
Machines	Vehicles

Travel

Both businesses and consumers can quickly cut back on nonessential travel.

Flights	Hotels
Theme Parks	Tours

Luxury Goods

Goods that have unusually high quality or social status such that cheaper substitutes are easily found.

High-end Fashion	Jewelry
Luxury Travel	Spas

Entertainment

Entertaining experiences and media.

Concerts	Cultural Events
Movies	Sports Events

Leisure

Enjoyable activities and hobbies.

Gyms	Lessons
Skiing	Sports Equipment

Services

Business and consumer services.

Advertising	Consulting
Events	Restaurants

Overview: Discretionary Expenses
Type	Expenses
Definition	Business and consumer spending that can be easily cancelled or deferred.
Related Concepts	Expenses » Durable Goods » Consumer Goods » Business Capital » Luxury Goods » Services »