Discretionary

Discretionary is an adjective used to describe decisions or actions that are left to one's own judgment rather than mandated by rules or automatic processes. When something is discretionary, it is possible to choose among alternatives at the discretion of a person or body; it is contrasted with mandatory or compulsory.

In public finance, discretionary spending refers to portions of a government budget that lawmakers must approve each year. These expenditures can be adjusted or reallocated in response to priorities, unlike mandatory spending, which is prescribed by statute or entitlement programs and funded automatically.

In personal finance, discretionary income is the portion of after-tax income that remains after paying for essential living expenses. This money is available for nonessential purchases, leisure activities, or savings, and its size depends on income, taxes, and living costs.

In law and governance, discretionary power is authority to make decisions within broad guidelines rather than to follow a fixed rule. Examples include judicial discretion in sentencing, parole decisions, and administrative or policing discretion, all of which may be constrained by oversight, policy, or appeals.

In trusts and estates, a discretionary trust grants the trustee discretion to determine if and when to distribute income or principal to beneficiaries and in what amounts. This flexibility helps accommodate changing circumstances but can introduce uncertainty for beneficiaries and typically requires accountability measures.