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Discretionary income is the money left over once taxes and essential expenses have been paid, which can cover things like eating out, adding money into emergency savings for unexpected bills, or entertainment. [1] Experian. “What Is Discretionary Income?” Accessed on April 29, 2026. https://www.experian.com/blogs/ask-experian/what-is-discretionary-income/
To understand how much Americans have, how they spend it, and how they feel about it, a survey of 1,481 U.S. adults was conducted on behalf of Self Financial. The findings reveal widespread financial pressure, with just under three-quarters of those with income left (74.3%) of respondents having less than $500 in discretionary income each month, and the majority (62%) running out of money before the month is out.
Discretionary income is the amount of money you have left over each month after paying taxes and covering essential living costs such as housing, groceries, everyday expenses, and necessary bills. This leftover income allows for optional spending for things like vacations, gym memberships, eating out, hobbies, or building up an emergency fund. [1] Experian. “What Is Discretionary Income?” Accessed on April 29, 2026. https://www.experian.com/blogs/ask-experian/what-is-discretionary-income/
The term discretionary income is also associated with federal student loans, as it’s used to calculate repayment plans for student loans. [1] Experian. “What Is Discretionary Income?” Accessed on April 29, 2026. https://www.experian.com/blogs/ask-experian/what-is-discretionary-income/ It's worth noting that discretionary income can have a different meaning when used in relation to federal student loan repayment plans. StudentAid.gov provides further information on how discretionary income is defined for income-driven repayment plans.
Discretionary income also matters beyond personal finances, as it reflects overall financial flexibility and spending power across the economy. When households have more discretionary income, they are more likely to spend on non-essential goods and services, which supports economic growth, while lower discretionary income can signal financial pressure and reduced consumer spending. [2] Federal Reserve Bank of St. Louis. “A Primer on Discretionary Income.” Accessed on April 29, 2026. https://www.stlouisfed.org/open-vault/2025/aug/primer-discretionary-income
Disposable income is a similar concept to discretionary but their differences are important.
Disposable income is simply income left after taxes have been paid. This income hasn’t been used for essential or nonessential expenses.
Whereas discretionary income describes income that’s left after tax and all essentials, such as groceries and bills like your mortgage or rent, utilities or car payments. [2] Federal Reserve Bank of St. Louis. “A Primer on Discretionary Income.” Accessed on April 29, 2026. https://www.stlouisfed.org/open-vault/2025/aug/primer-discretionary-income
The average discretionary income is around $1,500 per month, based on the survey of 1,481 on behalf of Self Financial.
This was estimated using monthly take-home income (after taxes) with essential expenses such as housing, groceries, utilities, and transportation, to calculate how much remains after necessary costs.
But how much do people actually have left in practice?
Most respondents (77%) have less than half of their income left once essential costs are paid, with all reporting that 40% or less of their income remains as discretionary after covering expenses such as groceries, housing, and other necessary bills. This includes 34.6% who said they have 1%–20% of their wages left, a further 34.6% with 21%–40% remaining, and 7.8% who reported having no income left at all after covering essentials.
| Share of income left after essential expenses (%) | |
|---|---|
| Percentage of income left after essential expenses | Percentage of respondents |
| 0% | 7.8% |
| 1%–20% | 34.6% |
| 21%–40% | 34.6% |
| 41%–60% | 15.1% |
| 61%–80% | 5.0% |
| 81%–100% | 2.8% |
Most respondents (87%) report having less than $1,000 discretionary income, showing how limited discretionary income is for the majority. This includes 27.9% of respondents who have just $1–$99 remaining, 24% with $100–$249, 22.4% between $250–$499, while 12.7% have between $500 and $999.
With nearly three-quarters of those with income left (74.3%) saying they have less than $500 discretionary income each month, it signifies the lack of a financial buffer each month. This could leave many households vulnerable, with unexpected costs or emergencies more likely to cause financial strain. The Federal Reserve findings revealed that over a third (37%) of U.S. adults would struggle to cover a $400 emergency expense using cash or its equivalent, showing how one unexpected bill could affect a household. [3] Board of Governors of the Federal Reserve System. “Unexpected Expenses.” Accessed on April 29, 2026. https://www.federalreserve.gov/consumerscommunities/sheddataviz/unexpectedexpenses-table.html
| Monthly discretionary income remaining after essential expenses ($) | |
|---|---|
| Amount of discretionary income | Percentage of respondents |
| $1–$99 | 27.9% |
| $100–$249 | 24.0% |
| $250–$499 | 22.4% |
| $500–$999 | 12.7% |
| $1,000–$1,999 | 9.3% |
| $2,000–$2,999 | 2.0% |
| $3,000+ | 1.8% |
Over 60% of respondents run out of money before the end of the month at least sometimes. When asked how frequently they are left with nothing, the majority of respondents (62%) said they run out of money before the end of the month at least sometimes, including 5.8% who experience this always and 23.4% who said it happens most of the time. A further 32.6% reported that it happens occasionally, showing that running out of money is a common experience for some of the survey respondents rather than a rare occurrence.
| How often respondents run out of money before the end of the month (%) | |
|---|---|
| How often respondents run out of money | Percentage of respondents |
| Always | 5.8% |
| Most of the time | 23.4% |
| Sometimes | 32.6% |
| Rarely | 20.6% |
| Never | 17.6% |
The amount people budget for discretionary income depends on a person’s income, expenses, and financial goals. If income is lower or debts are high, an individual is likely to have less access to discretionary income.
A common budgeting approach, the 50/30/20 rule, can be utilized as a starting point, where 50% of income is allocated to essentials, 30% to discretionary income, and 20% towards debt and saving goals. [4] Experian. “How Much to Budget for Discretionary Spending.” Accessed on April 29, 2026. https://www.experian.com/blogs/ask-experian/how-much-to-budget-for-discretionary-spending/
A recent study on household budget statistics found that a quarter (25.6%) of those surveyed use the 50/30/20 budgeting rule.
Discretionary income varies across different groups, with factors such as income, age, and household structure influencing how much money is left after essential expenses. Breaking the data down shows clear differences in financial flexibility between these groups.
Lower-income respondents are far more likely to have little or no money left at the end of the month. Among those earning under $30,000, over a third (35.1%) report having no discretionary income at all, while a further 36.3% have between $1–$99 remaining, making this group the most financially constrained.
At the other end of the scale, those earning $100,000 or more are the most likely to have over $3,000 left after paying essential expenses, with 17.8% falling into this category. This drops sharply across all other income groups, with 0.8% of those earning $50,000–$74,999, 0.5% of those earning $75,000–$99,999, and 0.3% of those earning $30,000–$49,999 reporting the same.
| How much discretionary income by income group ($) | ||||||
|---|---|---|---|---|---|---|
| Discretionary income left | Under $30,000 | $30,000–$49,999 | $50,000–$74,999 | $75,000–$99,999 | $100,000 or more | Total |
| $0 | 35.1% | 7.3% | 2.1% | 9.4% | 4% | 10.4% |
| $1–$99 | 36.3% | 38.5% | 14.2% | 18.8% | 9.9% | 25% |
| $100–$249 | 21% | 23.5% | 23.9% | 15.2% | 13.9% | 21.5% |
| $250–$499 | 2.3% | 18% | 30.4% | 23% | 14.9% | 20.1% |
| $500–$999 | 4.6% | 10.3% | 13.3% | 14.1% | 18.8% | 11.4% |
| $1,000–$1,999 | 0.8% | 1.8% | 13.3% | 15.7% | 13.9% | 8.3% |
| $2,000–$2,999 | 0% | 0.5% | 2.1% | 3.1% | 6.9% | 1.8% |
| $3,000+ | 0% | 0.3% | 0.8% | 0.5% | 17.8% | 1.6% |
Gen Z (18–28) are the most likely to have no money left after covering essential expenses and the least likely to have higher amounts remaining. No respondents in this group reported having over $3,000 left each month, while 26.5% said they had nothing left at all.
The Silent Generation (80+) is the most likely to report the highest levels of discretionary income, with 18.2% having over $3,000 left each month, the highest share of any age group. They are also less likely to fall into the lowest brackets, with just 9.1% reporting $1–$99 remaining and none reporting having no money left after essentials.
| How much discretionary income by generation (age group) ($) | |||||
|---|---|---|---|---|---|
| Amount left | 18–28 | 29–44 | 45–60 | 61–79 | 80+ |
| $0 | 26.5% | 9% | 2.2% | 3.5% | 0% |
| $1–$99 | 36.8% | 24% | 20.9% | 17.2% | 9.1% |
| $100–$249 | 18.2% | 20.8% | 24.9% | 27.6% | 27.7% |
| $250–$499 | 5% | 21.4% | 30.7% | 19.5% | 22.7% |
| $500–$999 | 7.4% | 12.5% | 10.7% | 14.9% | 4.6% |
| $1,000–$1,999 | 5.37% | 9.4% | 5.8% | 11.5% | 9.1% |
| $2,000–$2,999 | 0.8% | 1.2% | 3.1% | 4.6% | 9.1% |
| $3,000+ | 0% | 1.7% | 1.8% | 1.2% | 18.2% |
The amount of money left over after expenses can depend on specific living situations, with each household being different. The survey results show how those with and without children compare, how those who live alone are affected by the pressures of single-handedly paying bills, and how those who live with families may benefit.
| How much discretionary income by living situation ($) | ||||||||
|---|---|---|---|---|---|---|---|---|
| Household type | $0 | $1–$99 | $100–$249 | $250–$499 | $500–$999 | $1,000–$1,999 | $2,000–$2,999 | $3,000+ |
| Couple with children | 11.4% | 19.7% | 39.6% | 51.9% | 37.3% | 74% | 50% | 29.2% |
| Couple, no children | 16.2% | 41.1% | 33% | 32% | 19.5% | 16.3% | 23.1% | 54.2% |
| Live alone | 50.7% | 21.6% | 8.5% | 5.1% | 3.6% | 4.9% | 7.7% | 8.3% |
| Live with family/others | 4.6% | 12.2% | 11.3% | 4% | 30.2% | 1.6% | 11.5% | 4.2% |
| Single parent | 17.5% | 5.4% | 7.6% | 7.1% | 9.5% | 3.3% | 7.7% | 4.2% |
Single-parent households face some of the greatest financial pressure, with 17.5% of those with no money left each month falling into this group. They are also consistently represented across lower discretionary income brackets, highlighting ongoing strain after covering essential costs.
Many parents are going into debt just to afford household essentials and a recent study found that the cost of living in every major U.S. city outweighed the earnings of single parents. [5] Parents. “Study Shows the Harsh Financial Reality of Single Parenting in 2025.” Accessed on April 29, 2026. https://www.parents.com/study-shows-the-harsh-financial-reality-of-single-parenting-in-2025-11837879
Couples without children account for 54.2% of those with $3,000 or more left each month, compared to 29.2% of couples with children. Couples with children are instead more concentrated in lower-to-mid ranges, including 51.9% of those with $250–$499 left, and are also more likely to have nothing left at all (11.4% vs 16.2%).
Living alone is strongly associated with lower discretionary income. Individuals living alone make up 50.7% of those with no money left each month, the highest of any household type. Those who live alone could be spending roughly $10,000 more than those who share a home, with costs of rent, bills, insurance, and other expenses falling to one person. [6] Realtor.com. “Living Alone? Here’s How Taxes Affect Singles.” Accessed on April 29, 2026. https://www.realtor.com/advice/finance/living-alone-singles-tax/
In contrast, those living with family or others are more likely to retain moderate amounts of discretionary income, with 30.2% of those with $500–$999 left coming from shared households.
Essential expenses typically include necessary costs such as housing, transportation, food, healthcare, and insurance, which make up the majority of household spending in the U.S.
Data from the Bureau of Labor Statistics’ (BLS) Consumer Expenditure Survey shows that the average household in 2024 spent $78,535 per year, with around $61,802 (79%) going toward these core essential categories, the equivalent of roughly $5,150 per month.
Breaking this down further, housing is the largest expense at $26,266 annually ($2,189 per month), followed by transportation at $13,318 ($1,110 per month). Other key essentials include personal insurance and pensions ($9,797 annually), groceries ($6,224), and healthcare ($6,197), showing that most income is committed before discretionary spending can be considered. [7] U.S. Bureau of Labor Statistics. “Employment Situation Summary.” Accessed on April 29, 2026. https://www.bls.gov/news.release/cesan.nr0.htm
| Average monthly essential spend by category ($) | ||
|---|---|---|
| Essential household expense | Annual spend (avg.) | Monthly equivalent |
| Housing (rent/mortgage + utilities) | $26,266 | $2,189 |
| Transportation | $13,318 | $1,110 |
| Personal insurance & pensions | $9,797 | $816 |
| Food at home (groceries) | $6,224 | $519 |
| Healthcare | $6,197 | $516 |
| Total | $61,802 | $5,150 |
Source: [7] U.S. Bureau of Labor Statistics. “Employment Situation Summary.” Accessed on April 29, 2026. https://www.bls.gov/news.release/cesan.nr0.htm
Most respondents report spending a significant portion of their income on essential expenses each month. Unlike the Bureau of Labor Statistics figures, which reflect total household spending, these results are based on individual respondents, meaning costs may be shared across households or vary by living situation.
A majority (69%) spend between $1,000 and $2,999, showing how much of their income is committed before discretionary spending can be considered. Nearly all respondents (95%) spend under $4,000 per month on essentials.
Essential spending tends to be lowest among younger respondents, with Gen Z (18–28) being the most likely (39.7%) to spend less than $1,000 on essentials. While another 40.5% spend between $1,000 and $1,999. This could reflect living arrangements, with data showing that in 2023 more than half of adults aged 18–24 lived with their parents, meaning housing and household costs could be shared or covered within the home. [8] Bowling Green State University, National Center for Family & Marriage Research. “Young Adults in the Parental Home, 2007–2023.” Accessed on April 29, 2026. https://www.bgsu.edu/ncfmr/resources/data/family-profiles/loo-young-adults-in-the-parental-home-2007-2023-fp-24-02.html
Baby boomers (61-79) follow the youngest generation with 19.5% paying less than $1,000 to cover essential expenses.
Those living alone are the most likely to report lower essential costs in absolute terms, with 50.9% spending under $1,000 per month, the highest of any group, but these costs aren’t shared, so the full burden falls on one person. This links back to earlier findings, where 50.7% of those with no money left after essentials live alone, showing that lower spending doesn’t always mean more money left over.
Couples with children are the least likely to keep essential costs below $1,000, with just 6.1% in that range, compared to 9.8% of couples without children. They are also more concentrated in higher spending brackets, making up 31.6% in the $2,000–$2,999 range, 16% in $3,000–$3,999, and 5.3% in $4,000–$4,999, compared to 19.4%, 7.4%, and 1.1% respectively among couples without children.
When money is left over after essentials, eating out and takeout are the most common (37.9%) way respondents say they spend it. This is followed by leisure activities such as movies and nights out (24.7%), paying down debt (23.1%), and shopping (23%).
| What discretionary income is spent on (%) | |
|---|---|
| Category | Percentage |
| Eating out / takeout | 36.7% |
| Leisure (nights out, movies, etc.) | 24.7% |
| Paying down debt | 23.1% |
| Shopping (clothing, non-essentials) | 23.0% |
| Saving (general savings) | 22.8% |
| Hobbies / fitness | 19.5% |
| Emergency fund | 12.7% |
| Investing | 8.3% |
Data note: Respondents were asked to select the three answers that apply most, so percentages do not sum to 100%.
Almost a quarter (23%) of respondents say they spend discretionary income on non-essential shopping such as clothing, even though many report having relatively little money left after paying for essential expenses.
This is reflected in the use of short-term credit, with 56.6% of respondents saying they have used buy now, pay later (BNPL) services, suggesting these are often used to bridge gaps when discretionary income is low. Of those, 39.3% say they use BNPL occasionally and 17.3% regularly, while 43.4% say they do not use these services at all. But how do Americans feel about their discretionary income?
Nearly two-thirds of respondents (63.3%) feel they don't have enough discretionary income left each month, at least some of the time, with only 7.6% saying they always feel financially comfortable after covering essentials.
That sense of financial unease carries a real emotional weight. When asked whether their leftover income had caused any negative effects, worry was the most common response, cited by 39.4% of respondents, followed by stress (25.9%) and lack of sleep (25.2%).
Despite the financial pressure many are facing, most people aren't sitting still. Nearly half of respondents (48.8%) are budgeting more carefully, over a third (35.2%) are cutting back on expenses, and one in five (20.5%) have taken on a side hustle to bring in extra income. Only 11.5% said they are doing nothing at all, suggesting that while financial strain is clearly widespread across the country, so too is the resolve to try and push back against it.
The survey was conducted in April 2026 and included 1,481 U.S. adults. Respondents were asked about their income, essential expenses, discretionary income, and spending habits.
For some questions, respondents were able to select multiple answers, so totals may not add up to 100%.
The demographics of the survey respondents were:
Age:
Household type:
Income:
Written on June 17, 2026
Self is a venture-backed startup that helps people build credit and savings.
Self does not provide financial advice. The content on this page provides general consumer information and is not intended for legal, financial, or regulatory guidance. The content presented does not reflect the view of Self's issuing partner banks. Although this information may include references to third-party resources or content, Self does not endorse or guarantee the accuracy of this third-party information. Any Self product links are advertisements for Self products. Please consider the date of publishing for Self’s original content and any affiliated content to best understand their contexts. All trademarks and brand names belong to their respective owners and do not represent endorsements of any kind.
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