Where there is no guidance, a people falls,
but in an abundance of counselors there is safety. Proverbs 14:3 ESV
Let’s talk about discretionary income as defined by businessdirectory.com. Discretionary income is the “Portion of an entity’s income available for saving, or spending on non-essentials. It is what remains after expenses for basics (such as food, clothing, shelter, utilities) and prior commitments (such as school fees and loans) are deducted from the disposable income. Total amount of discretionary income in an economy is a key indicator of the level of possible economic growth and is the target of all commercial advertising. Also called hot money.”
Some people save their discretionary income. Others spend everything to the tilt. Where you are depends upon how well you manage yours.
Let’s see how much we can find from your budget. If you brought a new car and made all the payments so that the car becomes yours, you may want to check your car insurance policy and perhaps lower the payments by changing policies. Paying for the policy itself is cheaper when you pay it in full or even every six months. I will give you the why. The Insurance salesman receives a commission for each sale in advance of the year. The risk to the insurance companies of recouping their money back from the salesmen lessens when you make full payments. There are possible discoveries of new discretionary income even if you are a home owner. If you came into the home with having to buy mortgage insurance because you came into the come with less than 20% down, you may be able to discontinue that payment if you own more than 20% of the house. Basically everything that you are purchasing on time-payments can be renegotiated, modified or changed to reflect your current position of ownership versus your status when you initially contracted. There you may find that you are paying for something that you don’t need. Therefore investigate it and modify whatever you can to create more discretionary income. Some mortgages lenders allow you to make partial payments. If you are fortunate to be able to do so, take half of your mortgage payment and make it on the first, the other half on the 15th. This exercise decreases the overall amount of interest you will pay on the mortgage over the life of it.
Let’s talk about Cable TV. Really, are all those stations necessary? Here’s an example of my world. I don’t watch too much TV. Okay I’ll watch the news or sports and even PBS. But basically TV watches me while I’m on the internet. Needless to say, everything shown on TV can be received from the internet. I contracted for internet and cable tried to give me a package which included cable TV for $79.00. I got a digital TV so I brought an antenna with it which for me works fine. When I say the stations cable included in the package, the Lord showed me that I would have to watch each of those stations to understand their programming to find out if there would be something I would like. I had a choice to make. I don’t watch that much TV so I negotiated for a lesser package. In a nutshell, cable tried to give me what would make that salesperson the most commission. I looked up the cable rates on the internet and found my package for $29.00. I saved $50.00
Even with these few examples, I saved $50.00. Imagine all the money you can find if you rechecked your outgo to create more (discretionary income) inflow. If you don’t think $50.00 makes a difference, send it to me. I can find ways to use it.
Discretionary income can be found (if you look closely) at your Credit cards. If you look at the interest rate you currently are paying and shop for a lower rate, you could be saving tens if not hundreds of dollars per month just by changing your rate. It’s good to do this annually. Even your electricity bill can be negotiated for a lower rate.
How many people just threw their employee benefit handbook in the closet without reading it? Some companies provide benefits to you that you pay for but don’t need or you are paying for something that they already provide. How would you know? Look at it. Paying off past obligations free up money for future use.