The difference is what you have left to pay your expenses. Let s take a hypothetical case. Fixed expenses are those that stay the same each month. Examples include mortgage, car payment, insurance, minimum debt payments, and rent. Variable expenses are those which vary each month depending on different factors.
Examples are utilities, groceries, and car maintenance and fuel.
Discretionary expenses are ones that you can choose to make, or not. Movies, dining out, new clothes, and vacations are all examples. Discretionary income is what s left over after you pay all your mandatory bills like mortgage, car payment, groceries, insurance, and so on. You can spend it at your discretion, and eventually, it will be what will retire your debt. Let s keep building on our example above.