Is your spending in line with your income?

Even though there are many people who are saving money and espousing frugality, there are also people who are spending – just fewer of them.

The Bureau of Labor Statistics indicates that the current rate of unemployment is 8.1% as of February, 2009. There are still many people who are employed and making purchases.

But are those purchases in line with their income? I heard a woman say that there are no secure jobs anymore. There are some jobs that are more secure than others, yet having job security does not mean that spending should go uncapped. We have all heard of recommended minimum amounts that people should save yet if everyone paid their bills and saved some with money left over is there a recommended amount that people should spend on discretionary purchases?

Convenience and cost have made many relatively happy to spend on small indulgences, like coffee, dining out and inexpensive clothing & accessories. Now that the cost is more of a factor when people want to save, convenience stores which offer snacks, drinks and other goodies on the go are suffering as well. Thrift stores are booming in the clothing and accessories sections. The other sections, such as books and housewares haven’t seen people bustling to buy as much in the used goods trade.

When people make more, they have more discretionary spending available: More money, more to spend, and more to buy.

Investopedia defines disrectionary spending as: 

…an important part of a healthy economy – people will only spend money on things like travel, movies and consumer electronics if they have the funds to do so. Some people will use credit cards to purchase discretionary goods, but increasing personal debt is not the same as having discretionary income.

A healthy economy would mean spending within limits only if there is enough money there. How much is enough to have for discretionary purposes? And do you have to spend all of your discretionary funds?

Gas and food prices took a big chunk out of discretionary spending, but now that gas prices have almost halved off of their all time highs and managing at the grocery store what will this mean for the economy and unnecessary items?