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Are you wondering where all your money goes to by the end of the month?
Stop wondering where all your money goes and organize your spending with this list of budget categories.
Your budget can be as simple or as detailed as you like. It is up to you. Just remember to not make it too difficult on yourself so you can easily update it each week.
Here is a list of various budget categories that you will want to consider when you are making your zero-based budget each month. Some may apply to you and some may not. Use this list as a guide to help you take in to account all the areas that you are spending.
Income
You can’t make a budget without first listing all your income. You will want to include all income that you are expecting that month. That might include the following:
- Paycheck
- Tips
- Bonuses
- Social Security/Retirement
- Child Support Received
- Alimony Received
- Rental Property
- Personal Business or Side Hustle
Giving
- Tithe to Church
- Charity
- Fundraisers
- Political
Food
- Groceries
- Restaurants
You have to eat. And the food category tends to be one of the biggest and also the easiest to overspend on.
And don’t forget about eating out! Make a separate restaurant category so you can see how much money you are spending on eating out. If you are looking for ways to save in your budget take a look at your eat out category. Eating out is more expensive than cooking at home.
Related: 5 Tips for Saving on Groceries
Housing
Whether you rent or own your own home you will need to make sure you keep a roof over your head.
- Mortgage/Rent
- Homeowners or Renters Insurance
- HOA
- Lawn Care
- Security System
Utilities
Keeping things in a house running is another essential budget category.
- Electricity
- Natural Gas or Oil
- Phone
- Water
- Trash/Recycling
- Sewer
- Internet
- Phone
- Cable
Transportation
Whether you have a vehicle or use public transportation, here are some categories to factor in:
- Gas
- Vehicle Maintenance (oil changes, repairs)
- Registration fees
- Insurance
- Public Transportation
- Tolls
- Parking Fees
- Roadside Assistance (AAA, OnStar)
- Ride Sharing (Uber, Lyft)
Savings
Having a savings plan is key to having more margin in your budget and preventing going into debt with planned or unplanned expenses. Here are 4 types of savings plans to consider.
Emergency Fund
An emergency fund is your safety net for unplanned expenses. If you don’t have any savings your first goal should be to save $1,000 in a starter emergency fund as quickly as you can. This is the first step in Dave Ramsey’s 7 Baby Steps to Financial Peace.
Once you have $1,000 in an emergency fund and have paid off all small debts (Baby Step 2), the 3rd Baby Step is to save for 3-6 months of expenses.
Related: What is an Emergency Fund?
Sinking Funds
A Sinking Fund is a savings plan for a specific purpose. It’s usually a larger purchase and allows you to save a little each month so you don’t go into debt by using a credit card or a store’s finance plan. Some sinking fund ideas include:
- Vehicle
- Furniture
- Down payment on a house
- Christmas
- Car or house repairs
- Landscaping
- Gifts
- Wedding
- Vacation
- Insurance premiums
- Property and school taxes (if they aren’t included in mortgage payments)
- Pool
Related: How to Start a Sinking Fund
Retirement
We don’t personally have retirement as a separate line item on our budget because it is automatically deducted from my husband’s paycheck. But if you are contributing to your retirement outside of your employer’s plan (or if you’re self employed), don’t forget to plan for your future.
Saving 15% of your annual income for retirement is the goal once you have paid off your small debts and have a 3-6 month emergency fund in place. This is Baby Step 4.
- 401(k)
- IRA
- Stocks
- Mutual Funds
College Savings
If you have children you may want to start saving for college to avoid those student loans. In Dave Ramsey’s 7 Baby Steps to Financial Peace this is Baby Step 5. The best way to save for college is to open a 529 account. Each state will have a different 529 resource, so look up the program for your state.
Anyone can contribute to your child’s 529 as well! So be sure to tell family members that it’s a good idea for birthdays and Christmas if they would like to contribute to the 529 instead of buying gifts.
New York State Residents: Learn more about New York’s 529 program.
Debt
If you have consumer debt congratulations…you’re normal! According to a report from St. Louis Federal Reserve, debt payments made up 9% of the average American household income in 2022.
If you truly want to have financial peace and freedom then your goal should be to make that 0% of your income by using the debt snowball method.
Here are some common consumer debts:
- Car Payments
- Credit Cards
- Personal Loan
- Student Loans
- Medical
- HELOC
- Back Taxes
Taxes
Taxes may or may not be a separate budget category, depending on your specific situation. Some taxes might be included in your mortgage payment, but if they aren’t then you will have to set up a sinking fund for your taxes so you aren’t surprised when a big bill comes.
- Property Taxes
- School Taxes
- Filing fees during tax season and/or paying for an accountant
- Federal Taxes Owed
- State Taxes Owed
Insurance
Insurance is another category that may or may not be included in other budget categories or automatically deducted from your paycheck.
Depending on how you have your insurance payments set up, you may pay monthly, annually or biannually. If you are paying biannually ro annually then this makes an excellent category for a sinking fund.
- Health Insurance Premiums
- Homeowner’s or Renters Insurance
- Disability Insurance
- Life Insurance
- Long Term Care
- Identity Theft
- Health Savings Account of Flexible Spending Account (technically not insurance but attached to insurance programs)
Household Products
- Cleaning Supplies
- Paper Products (toilet paper, paper towels, paper plates)
- Office Supplies (envelopes, stamps, paper, pens)
- Gardening and Lawn Supplies
- Tools
- Pool Care
- Home upgrades
- Furniture
- Bedding and Pillows
- Decor
- Organization Products
Personal Care and Personal Spending
Each person in the house should have their own personal spending money. I also like to think of this category as personal care as well.
Having some spending money for each adult in the house helps reduce money fights. Set a reasonable amount for each person so that he can happily go to Home Depot and she can happily go to Target.
Adults
- Personal Spending
- Hygiene Products
- Haircut
- Clothing and Shoes
- Spa Treatments
- Personal Development (classes, books, courses, conferences, coaching)
Kids
- Sports Fees
- Babysitter
- School Supplies
- After School Activities
- Allowance
- Lessons
- Clothing and Shoes
Child Care & Tuition
Child care costs are huge for working parents. Costs range depending on how many children you have, location, and the type of care (daycare center, in-home nanny). In a Bankrate.com article, 72% of families reported that child care costs made up at least 10% of their income.
And since it is such a huge expense, I would separate it from your child personal spending category. This will allow you to easily track it. Check with your accountant on special tax benefits and rules for child care.
If your child is in private school or your cash flowing college, make tuition a separate line item in your budget as well.
Pets
Just like us humans, pets need things too.
- Food
- Vet costs
- Cat Litter
- Toys
- Hygiene products
- Pet sitter if you are going out of town
- Grooming
- Training
Entertainment & Travel
Yes, you should have fun with your money too! Just be sure to keep it within your budget. Here are some entertainment costs to consider. Obviously much of these could be seasonal and vary month-to-month.
- Date Night
- Movies (and snacks)
- Golf/Mini Golf
- Sporting Events
- Concerts
- Outdoor recreation
- Hobbies
- Travel (hotel, transportation, airport baggage fees, souvenirs)
Planning your budget categories for a specific month? Check out these related lists:
Subscriptions and Memberships
You may include your subscriptions within other categories but here is a list of common ones to consider.
- Amazon Prime (yearly)
- Amazon Music, Audible or other monthly add-ons
- Streaming Services (YoutubeTV, Netflix, Hulu, ect)
- Music Subscriptions (Apple Music, Spotify, XM Radio)
- Subscription Boxes
- Personal Care (All Girls Shave Club and other beauty products on auto ship)
- Gym memberships (or home video streaming)
- Newspapers
- Magazines
- Supplements on auto-ship
- Ramsey+
Gifts
- Birthday Gifts
- Christmas
- Wedding
- Anniversary
- Baby Shower
- Special Occasion
- Holiday
- Teacher Gifts
- Hostess Gifts
Miscellaneous or Buffer
Lastly, you don’t want to make your budget so tight that you aren’t prepared for any surprises. Even if you considered all categories to the best of your knowledge, something is bound to pop up that you didn’t plan for – like your kid being invited to a birthday party and now you have to buy a gift.
So give yourself a miscellaneous category or “buffer” for those unplanned expenses.
Putting It All Together
Now that you have a full budget categories list, you will want to make a written money plan each month so you can feel more confident about your finances! Sign up for my free email mini course, Give Yourself a Raise: How to Find an Extra $200 Each Month to get started!