What is the most common question or struggle by beginning (and even advanced) budgeters? It’s this: how do I know what personal budget categories to start off with? And how do I make sure I’m not forgetting a category?
Even if you’ve never budgeted before, you’re probably pretty aware of how much you spend every month, or at least if it’s less than your take-home income, or more. But…do you really know how much money you make AND exactly what you’re spending it on? Evaluating your money using categories is the best way to get clear on your money habits and where your hard-earned money is going. It’s time to make your money work FOR you and tell it exactly where to go. You’ll no longer be left wondering why there’s too much month left at the end of the money. And you don’t have to wonder where it all went!
Grab a free printable HERE to track your current spending in each personal budget category. With this budget category printable, you can decide if your current spending amount in a certain area is a reasonable number for your budget. If not, what would be a better target number? Can you hit that number instead? Bam! You can definitely do this budget thing. You got this!
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Obviously, not all of these categories will apply to you. Just adapt accordingly based on your own situation.
Now, where to start with your personal budget categories? Income!!
Income (take-home)
Paycheck #1
Paycheck #2
Paycheck #3
Paycheck #4
Miscellaneous (Side Hustle, Bonus, Tips, Tax Refund, Interest Earned, etc.)
Once you know your income, you can begin to go down this list until you reach a zero-based budget. This means that every penny of your income is accounted for. There’s no “extra” money and there can’t be any negatives allowed. Every last penny should have a designated place to go, and if there’s not enough money to make it down the entire list, then unfortunately it’s time to make some tough choices. But don’t let that get you down! You’re here, and you’re ready to dig in, so let’s do this!
After knowing your income, you must look at expense categories in your budget.
Hang on tight, because we’re diving in head first!!
Giving
Tithe
Offerings/Charities
Miscellaneous Giving #1
Miscellaneous Giving #2
You may or may not be giving at this time, but I believe it is extremely important to have this as a budget line item. Pray over the areas where God may be leading you to give (or give more).
Savings/Investing (these are all considered sinking funds)
Emergency Fund
Retirement
College
Savings Goal #1 ___________
Savings Goal #2 ___________
Savings Goal #3 ___________
Debts
Credit Card #1
Credit Card #2
Car Loan #1
Car Loan #2
Student Loan #1
Student Loan #2
Other
Housing
Mortgage/Rent
HOA Fees
Home Insurance/Renters Insurance
Property Taxes
Home Maintenance/Repairs (S)
Home Improvements (S)
Yard Maintenance/Lawn Care
Home Security System
When I designate a category with an (S), it means it’s a good candidate for a sinking fund. What is a sinking fund? In short, it’s an expense you plan to have in the future, but don’t have to pay it monthly. My favorite sinking fund example is Christmas. You can save some money monthly all year for Christmas, then by the time it gets here, you have plenty saved and allocated just for Christmas!! No stress!
Utilities
Electric
Gas
Water
Sewage/Septic
Trash
Home Phone
Internet
Cell phone
Transportation
Gas
Car Insurance (S)
Tires (S)
Maintenance/Repairs (S)
License/Registration/Fees/DMV (S)
Parking Fees
Tolls/Public Transportation
Healthcare
Prescriptions
OTC Medications/First Aid/Bandages
Vitamins/Supplements
Glasses/Contacts (S)
HSA/FSA contributions
Insurance
Medical Insurance
Dental Insurance
Vision Insurance
Life Insurance
Disability Insurance
ID Theft Insurance
Misc. (Long Term Care Insurance if at least 60 years old, umbrella policy, professional liability, etc.)
Obviously, if your healthcare premiums come out of your paycheck, many of these will be N/A on your monthly budget. Yay for getting to cross off some budget items! 😉
Food
Groceries
Eating Out
Whoa…talk about a place to cut back! The food budget!! Most months, my “current” spending is too high. This is probably the EASIEST category to blow the budget! Every month I set a new “target” number to try to stay within, and sometimes I get close, but I rarely put as much emphasis on this category as I should. Time to re-evaluate and pay better attention to our food—don’t forget to use those leftovers! And cash envelopes can be a huge lifesaver in this area!
Clothing
His Clothes
Her Clothes
Kid #1 Clothes
Kid #2 Clothes
Kid #3 Clothes
Remember, when it comes to clothing, especially kids’ clothing, consignment is the way to go!! You probably have consignment stores in your area as well as online communities to help you find used clothing items in great condition!
Household Items
Cleaning Supplies
Laundry Detergent — have you tried these miracle laundry balls? Talk about a way to save money! And even eco-friendly!!
Furniture (S)
Home Decor (S)
Small Appliances
Tools (S)
Pool Supplies (S)
Miscellaneous (Emergency Preparedness Kits, etc.)
Personal Care
Toiletries (toilet paper, shampoo, soap, body wash, bath stuff)
Haircuts/Salon
Dry cleaning
Makeup/Beauty Products
Nail Salon
Eyebrows
Massages/Spa
Gym Membership
Entertainment
Movies
Cable/Satellite/Netflix/Hulu
Amazon Prime (S)
Books/Magazines
Other Subscription ______
His Hobbies
Her Hobbies
Professional family photos
His Fun Money
Her Fun Money
Vacation (S)
Kids
School supplies
Extra-curricular/sports activities (includes tutoring, private lessons, summer camps, school field trips)
Toys
Allowances/Commissions
Diapers/Pull-ups
Gifts
Christmas (S)
Birthdays
Holidays
Weddings
Baby Showers
Co-workers
Pets
Vet Visits (S)
Food
Toys/Clothes/Bedding
Pet Meds
Miscellaneous/Other
New Technology
Bank Fees
Professional Dues
Job-related expenses
Income Taxes (if you are self-employed)
Anything that doesn’t fit in a category above!!
And there you have it! The ultimate list of personal budget categories!
Now you will be completely prepared to create your very first budget or update and fine-tune your current working budget. And you will be much less likely to forget anything!
I have to admit when I first went through this list, even the budgeting nerd that I am, I was surprised at the amounts of some of our expenses! I had never quite broken it down line by line like this.
Be sure to grab your free budget category printables so you can easily begin breaking down your budget into specific categories. You will be able to make huge strides with your money when you see EXACTLY where it’s going! You can compare what you’re currently spending in each category to what your “target” spending is. Then brainstorm ways to get expenses down (or income up!) to that target number!
Also, when you sign up for the free printables, you will be automatically enrolled in the monthly budget challenge! At the end of every month, we review our spending over the last month (or more) and get our new budget numbers ready to go for the next month. Can’t wait for you to join us!
As always, steward your money — and your life — intentionally.
Heather
This was so detailed! I keep a budget but now I wonder if I’m missing some categories. This seems like a great way to make sure all the areas are reflected in my budget. Thanks for sharing!