Final answer:
Discretionary income, mandatory spending, and disposable income are key financial concepts related to funds allocation and budgeting.
Explanation:
Discretionary income refers to the funds left over after paying for necessities like food, clothing, and shelter. This money can be invested, saved, or spent on non-essential items.
Mandatory spending is the portion of federal spending required by law, such as entitlement programs. On the other hand, discretionary spending is the money that Congress can allocate based on yearly choices and legislation.
Disposable income is what remains after taxes and can be used for various purposes, including savings or non-essential purchases.
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