Definition

A discretionary budget is an unspecified lump sum that states what the amount is for, what the maximum sum overall will be, and possibly specifies also a maximum sum per item.

Discretionary budgeting is useful when the expenditure for each item is small in terms of value. The administrative cost of dealing with each item far outweighs the control benefit available. However, control is maintained within the lump-sum budget.

True is a Certified Educator in Personal Finance (CEPF®), contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, his interview on CBS, or check out his speaker profile on the CFA Institute website.