Types of Expenditure

Essential Expenditure:
- Food and Drink: Everyone needs to eat and drink to survive. This can include groceries and dining out.
- Housing: This can be in the form of rent or mortgage payments.
- Utilities: Expenditure on electricity, gas, water, and internet services.
- Transport: Costs related to public transportation, car payments, petrol and maintenance.
Discretionary Expenditure:
- Leisure and Entertainment: These are non-essential expenses such as movie tickets, travel, social events, and hobbies.
- Clothing and Personal Care: Spending on clothes, beauty products, grooming and hygiene.
- Home and Garden: Expenses for furniture, appliances and maintaining or improving the home or garden.

Key Terms to Remember

Essential Expenditure: These are necessary expenses for basic living needs.
Discretionary Expenditure: Also known as non-essential or optional expenses. These are personal choice and can be minimized or eliminated if needed.

Financial management requires an understanding of different types of expenditure and the ability to control discretionary spending in order to maintain a savings balance.