The Categories You Need In Your Budget

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Wondering which categories you need in your budget? Get the full list here.

How to Create a Budget - The categories you need in your budget

It is no secret that the number one thing you must do in order to take control of your finances is to create a budget.  Without one, you really can’t see where you money goes.  Or, more importantly, direct your money to be spent as you would like for it to be.

While there are posts on how to create a budget, one question I get frequently is what categories should be included.  Obviously, I don’t have line items for every single store or company I pay each month.  Instead, these are grouped together.

To help you get a jump start on creating your budget and to ensure you don’t leave any categories off of your list, it is best if you download our free budget template.  This form has helped thousands get started with creating a budget.

 

CATEGORIES YOU NEED IN YOUR BUDGET

Once you have your form, you are ready to figure out your categories!  While you may not have each of these as individual line items on your form, just make sure you include them all somewhere in your budget!

 

DONATIONS

These are all of the monthly donations you make to various charities.  Don’t forget about those you may make only once or twice a year as well!

Some of these may include:

Church
Medical Research
Youth Groups

 

SAVINGS

While not needed to live, it is important that you always pay yourself before you really pay anyone else.  Once you meet your necessary expenses, ensure you are saving enough each month.

If you are in your employer’s retirement plan, those contributions were already deducted before you received your pay.  You will not want to include those in this figure.  Some of your savings accounts may include:

Emergency Fund Savings
Annual Fees, such as taxes, insurance and dues
College Savings
Investments
Christmas/Birthdays/Anniversaries
Additional Retirement (outside of your employers plan)

Read More:  Yearly Savings Challenge

 

HOUSING

This is pretty self-explanatory, but make sure you include the amount you may save for repairs and other expenses.  Remember, look at what you spent the prior year and divide that total by 12 to determine the amount to budget monthly.  This will actually be saved, but in order to track it, include it under your housing category.

First Mortgage
Second Mortgage (if applicable)
Property Taxes
Insurance
Home Owner’s Association Dues
Maintenance
Housekeeper/Cleaning
Lawn Care

 

UTILITIES

You can’t live without your utilities.  So, it is important that you don’t leave any of these off of your budget either!  Ensure you include the following:

Electricity
Water
Gas/Oil
Sewer
Trash
Cable/Sattellite/Streaming Services
Internet (if not part of your cable bill)
Phones

Read more:  How to Lower Your Utility Bills

 

FOOD

This one makes sense.  Make sure you include both of these line items in your budget.

Groceries
Dining Out

 

TRANSPORATION

You have to be able to get around.  That doesn’t always mean a vehicle as it could mean using other means of transportation.  Whatever method you use, make sure you include all of those expenses in your budget.  Remember that you may not have to pay for some of these items each month, but it is important you budget for them monthly so that the funds are available when needed.

Vehicle payment (make sure you include all payments needed)
Fuel
Insurance
Taxes
Tags/Licensing
Maintenance
Parking Fees
Taxi/Bus Fares

 

CLOTHING

Many people tend to forget that clothing is a necessary expense.  While this doesn’t mean you should go and buy new clothes all of the time, it does allow you to replace items which are worn out. It is also very important that parents include this item as kids need clothes a bit more frequently.

Adult Clothing
Kids Clothing

 

HEALTH

It is important to take care of yourself!  Don’t forget your health expenses when determining a budget.  Make sure you include the money you pay towards your co-pays during the year.

Health Insurance
Dental Insurance
Eye Insurance
Doctor Visits
Dental Visits
Optometrist
Medications
Deductible Savings

 

PERSONAL

This is a “catch-all” category which may contain much of your discretionary spending!  Some of the most common categories you need to add include:

Haircuts/Manicures/Pedicures
Life Insurance
Child Care/Babysitting
Toiletries (if not included in your grocery budget above)
Household Items (if you did not already include in your groceries budget above)
Education/Tuition
Dry Cleaning/Laundry
School Dues/Supplies
Magazines
Gym Memberships
Organization Dues
Postage
Pet Care (food, grooming, shots, boarding)
Photos (school and/or family photos)
Random Spending (always good as a way to pay for the things you may not have broken out in your budget)

 

RECREATION

We all love to spend some time doing things we love.  Don’t forget to include your entertainment category when determining your budget.

Entertainment (movies/concerts)
Crafts
Hobbies
Parties
Vacations

 

DEBTS

Once you pay off your debt, these categories will go away completely and will no longer be needed.  You can learn how to get out of debt and get started with that (once you have your budget).

Credit Cards (all debt)
Unsecured loans
Home equity loans
Student loans
Medical loans

 

Now you have the categories you need for your budget!  Take the first step in getting control of your finances by putting this to work for you.