So, I used to go to college.  And I’ll use those days to illustrate my point when it comes to money, revenue, expenditures, debt and savings.

Back then it was more clear-cut on what was discretionary spending and what wasn’t.  Further, back then my income was much more fluid and variable than it is now.

Okay, back in the day….

When I was going to school I had few expenses.  Many were required, many weren’t.  For example, I had to pay rent, pay the electric bill, the phone bill and what not.  There was gas for the car, insurance for the car and car payments.

All of these things pretty much are required spending.

Then there was discretionary spending.  There was beer.  Beer out and beer at home.  There was also shots; HAD to have shots with the beer.  Also, there was movies and popcorn, soda too.  Cover charges were expenses, had to get IN the bar to spend the money on the beer and the shots.

New clothes and new shoes.  Watches and baseball hats.  Pet dogs and pet birds; pet cats too.  ALL these things are discretionary.

I was poor, went to school and worked in a bar.  My income was up and down.  My savings, if any, was up and down and often drifted into debt.

Now consider.  If, after my required spending was accounted for, I had between -$200 and +$200 extra to spend as I wanted.  That was money “extra”.

So, if I am looking at my checkbook having paid rent and all that and I have $150 left AND I go out Friday, Saturday and Sunday, buy some clothes and cigarettes and balance my checkbook on Monday only to see that I am in the hole $200, do I have a revenue problem or a spending problem?

Right.

A spending problem.