 TITLE: What Is Discretionary Spending? CONTENT: Why Do You Need a Budget?\n-------------------------\nCreating a budget is a fundamental step toward building financial security and working toward your goals. Here's how a budget can help you:\n1.  Figure out if you're overspending. When you live outside your means, you can find yourself living paycheck to paycheck, which can be quite stressful. A budget helps you create savings and a financial buffer so you don't have to stress about having enough money.\n2.  Pay off debt. Listing out your monthly debt payments and discretionary expenses is a great way to motivate yourself. Eliminating just a few nonessentials can free up enough cash to make larger debt payments and clear your loan and credit card balances that much faster. Paying down debt can help you save money on interest and improve your credit score.\n3.  Save for the future. Whether you're building an emergency fund or saving for retirement, a budget gives you insight into your spending and income so you can come up with a workable savings plan. By putting money toward your goals each month, you can make steady, incremental progress.\nYou can structure your budget in whatever way works best for you. One popular method is the 50\/30\/20 rule, in which 50% of your income goes to necessary expenses, 30% goes to discretionary expenses and 20% gets allotted to savings.\nBut there are many ways to create and track a budget, and it's important to find one that works for you. Whatever budgeting method you choose, the key is sticking with it. Setting budget goals and assessing your spending at the end of the month can tell you how well you've done, and possibly motivate you to make changes the next month. END