Discretionary spending
Spending on things you choose rather than have to buy, such as eating out, travel and entertainment. It is the part of a budget that can be cut without breaking a commitment.
Discretionary spending is whatever is left once the obligations are met. Housing, utilities, food, transport to work, insurance and minimum debt payments are non-discretionary in practice, whatever a strict reading of the words might allow. Restaurant meals, subscriptions, hobbies and upgrades sit past that line, and they are where a budget has room to move without renegotiating anything.
The category does two jobs at once. In a household budget it marks the spending that can absorb a bad month, so it is the first place to look when cash flow turns negative. In public finance in the United States the same words carry a specific meaning: discretionary spending is the portion of the federal budget set each year through appropriations, as opposed to mandatory spending that existing law already commits. Same term, different mechanism.
The line is not fixed, and pretending it is makes budgets fail. A gym membership is discretionary until it is the thing keeping someone at work; a car is discretionary in a city with transit and non-negotiable outside one. Drawing the line honestly for your own situation beats copying somebody else's categories, and a budget that files too much as essential leaves nothing to cut when a cut is needed.