Unit 17.2
Essential vs Discretionary
VS.
Discretionary Expenses
Essential Expenses
Expenses that are not essential, or necessary, for you to earn a living and support yourself. This term means that it is at your discretion as to whether or not you spend money on an item
If it hinders your ability to earn money or to live, it is an essential expense. Essential means extremely important or absolutely necessary.
Examples
Examples
Define each expense as essential or discretionary:
Discretionary
Essential
Discretionary
Discretionary
Essential
Essential
An emergency fund is an easily accessible account (typically savings) in which you keep enough funds to cover your essential expenses for 3 to 6 months.
Example
Suppose you want to build up an emergency fund with enough money to cover 5 months of essential expenses, and you want the fund to be ready in 15 months. How much do you need to set aside each month if your essential expenses are $960/month?
You have $1,470 in essential expenses each month, suppose you would like to build up a 6-month emergency fund over a 21-month period of time.
How much do you need to save each month to accomplish your goal?
You have $1,200 in essential expenses each month, suppose you would like to build up an 8-month emergency fund over an 18-month period of time.
How much do you need to save each month to accomplish your goal?
Which of the following is NOT a discretionary expense?
Pets
Jewelry
Concerts
Car Insurance
Which of the following is NOT a Essential expense?
Work Shoes
Mortgage Payments
Attending a Musical
Groceries
Upcoming
Friday - 17.3 Budget Planner Monday - Academic Catch Up Day Tuesday - Flex Day Wednesday - Unit 17 Project
17.2 Essential vs Discretionary
HS: High School
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Transcript
Unit 17.2
Essential vs Discretionary
VS.
Discretionary Expenses
Essential Expenses
Expenses that are not essential, or necessary, for you to earn a living and support yourself. This term means that it is at your discretion as to whether or not you spend money on an item
If it hinders your ability to earn money or to live, it is an essential expense. Essential means extremely important or absolutely necessary.
Examples
Examples
Define each expense as essential or discretionary:
Discretionary
Essential
Discretionary
Discretionary
Essential
Essential
An emergency fund is an easily accessible account (typically savings) in which you keep enough funds to cover your essential expenses for 3 to 6 months.
Example
Suppose you want to build up an emergency fund with enough money to cover 5 months of essential expenses, and you want the fund to be ready in 15 months. How much do you need to set aside each month if your essential expenses are $960/month?
You have $1,470 in essential expenses each month, suppose you would like to build up a 6-month emergency fund over a 21-month period of time. How much do you need to save each month to accomplish your goal?
You have $1,200 in essential expenses each month, suppose you would like to build up an 8-month emergency fund over an 18-month period of time. How much do you need to save each month to accomplish your goal?
Which of the following is NOT a discretionary expense?
Pets
Jewelry
Concerts
Car Insurance
Which of the following is NOT a Essential expense?
Work Shoes
Mortgage Payments
Attending a Musical
Groceries
Upcoming
Friday - 17.3 Budget Planner Monday - Academic Catch Up Day Tuesday - Flex Day Wednesday - Unit 17 Project