If you’re trying to get a handle over your finances, one of the smartest things to do is create a budget. Budget categories help you figure out where the areas of overspending are coming from and give you the awareness to make strategic, positive changes in your spending. Read on for the ultimate list of budget categories, and snag some great free printable budget templates too!
I’ll be the first to admit that creating a budget can be far from fun for most of us. When I first tried creating and keeping our family on a budget, I remember feeling so frustrated because we kept going WAY over. On top of that, it felt like every month some kind of expense popped up that we didn’t have a budget line item for (which meant we hadn’t planned for the cost).
Every time this happened, I was left feel super discouraged about the progress we were making towards paying off our debt. Does this sound familiar to you at all?
If it does, you’re in the right place! I’ve put together this ultimate list of budget categories so you can take control of your budget and finances!
Having the right list of personal budgeting categories can help you have a better snapshot of where your money is going, where you might be overspending and how you can get on track and save more money. Whether you want to save more money to help pay bills, or you’re daydreaming about taking the kids to Disney World, personal budget categories can help.
Our family dug our way out of debt, and by far the most helpful tool we put into place was a failproof budget that worked for our lives. Now that we are parents, having a great working budget allows us to continue to make big purchases and save for those big dream trips, too.
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Why You Need Budget Categories
In a recent report, “65 percent of Americans said they don’t know how much they spent last month.” Money (and the lack of money) is a huge stressor for many people, but avoiding actively taking control of your finances is never a good thing.
While many people don’t track their spending because they don’t feel that they need a budget, Americans are also overspending an average of $7,500 each year! What’s the best way to take positive steps towards a brighter financial future? Using a budget.
Since everyone’s financial situation is different, as are most people’s financial goals, there’s no one budget that will work for every person. The key to mastering your budget is to build one made up of categories that work for you. If you have budget categories on your household budget that aren’t actually applicable to you, you might end up giving up on the budgeting process.
The biggest reason why you need budget categories is to help you have a grasp on what money you are making and what you are spending your money on each month. When you don’t have a firm grasp on those categories, your monthly expenses can feel extra frustrating.
When I started budgeting, I tried to use a “one size fits all” budget spreadsheet that absolutely did NOT fit our life. I got so frustrated and fed up that I almost gave up on a budget entirely.
It took a little work to come up with a true list of budget categories that accurately reflected our lives and expenses, but it was a complete gamechanger for our financial stablitity when I did.
Having a specific set of important budget categories allows you to see each month where your income is going, and make changes if you need to. These also work great for using with the cash envelope system!
What Categories Should I Include in a Budget?
The most important thing to know is that creating a budget is not a one-size-fits-all thing. Everyone’s life is different, as are their financial goals. Different systems work for different people.
I personally love to use spreadsheets, as it helps me track the entire year in one workbook. It’s an easy way to see our income, what we’re spending and what’s leftover at the end of the month. This has been the biggest key to better understanding my spending habits.
If you prefer a simpler method, focus on keeping your budget categories to a minimum and use a paper budget tracker!
The budget categories you should include in your own personal or family budget depends on who you are and what your life looks like.
For example, when we look at the food budget category there can be a lot of options.
Simple budget categories: Groceries, Eating Out/Delivery
Detailed budget categories: Groceries, Fast Food, Work Lunches, Coffee, Drinks, Eating Out/Delivery
If you don’t need the extra budget categories, it’s simple: don’t use them!
Before you build your budget, I recommend writing out your expenses from the past 3-6 months to get an accurate picture of how much money should be in each budget category. Be sure to check not only your debit card, but also each credit card, checking account, savings account or other bank account you regularly use.
It helps to also have your calendar handy, so you can plan accordingly for irregular expenses (like your yearly HOA dues) or important birthdays or holidays that you’ll need to put some extra money towards.
If you find yourself spending less in categories than you allotted for, a great idea is to consider putting them into a savings challenge (like the 52 Week Savings Challenge) to help you also build up your savings account or save for something fun.
You may also consider saving a little each month for some of these budget categories, so when the payment is due you aren’t scrambling to find the money.
How to Build Your Budget Categories List
Creating a personal or family budget is all about your life and what works best for you. Some people prefer to have a budget with a lot of detail, while others like something that is more general.
No matter what you choose, be sure you are consistent with your budget categories from month to month. Keep in mind surprises might pop up, but planning ahead by mapping out what to include in your budget should help keep this to a minimum.
Feeling a little lost on starting from scratch? Grab a free printable copy of the ultimate list of budget categories PLUS my post popular budget templates, too! Simply print them out and use the ones you want to use as you build your own budget.
This 11 page printable PDF is yours to use for free at home to help you get control of your financial future. It includes:
- SMART Money Goals Mini Worksheets
- Writing down your goals for saving will help you stay motivated and committed to your new budget.
- Simple Monthly Budget Template
- Just print & write in the budget categories you need.
- The Ultimate List of Budget Categories
- You certainly don’t have to use all of these categories! These are just ideas to get you thinking about all of the things you spend money on throughout the year.
- Bill Tracker
- To keep tabs on payments each month so nothing falls through the cracks.
- Annual Debt Payoff Tracker
- It’s all about having a winning plan to tackle your debt!
Can I use this for cash envelopes?
Yes! The below list of budgeting categories is a great additional tool if you are using the cash envelope method. Obviously you won’t use all of these for individual envelopes, but choosing a few below for cash envelope categories is a great tactic.
If you’re unfamiliar with it, the cash envelope budgeting system is a more old-school way of managing your money that many times can go hand in hand with traditional budgeting. It involves you taking cash out from your paycheck each pay period, and then dividing the money up into different paper envelopes based on categories. Many people use these different envelopes as a cash envelope wallet system.
Every time you go to make a purchase, you take the cash physically out of the corresponding envelope. The concept is that once you are “out of cash” in these envelopes, you have hit your budget limit until your next paycheck (or next month, if you are choosing that approach). If you want or need to spend from a category that’s run out, you either need to choose not to spend the money, or take it out of another envelope’s budget.
Learn more about the cash envelope budgeting system here.
The Ultimate List of Budgeting Categories
Are you finding that you are forgetting budget categories when you make your monthly budget? This comprehensive list of budget categories is here to help! These are great for mapping out your budget, taking a closer look at variable expenses, and also useful for labeling cash envelopes too.
Read on for the main categories to focus on, with more than 100 additional budgeting categories so you never forget a budget line item again!
Budget Categories for Income
Before you start building out your budget categories, it’s important to have a firm grasp of what your income looks like. Don’t include one lump sum! Break up your take home income after taxes into each paycheck or deposit you receive so you have an accurate monthly amount.
These days are there are many different types of income. If you have income from a side hustle or an extra way you earn money (like reselling clothes on Poshmark), list the amount you expect to earn that month for take-home pay in separate categories.
Your income line items might look something like this in a 2-earner household where you receive biweekly paychecks:
Your Paycheck #1-
Your Paycheck #2
Partner’s Paycheck #1-
Partner’s Paycheck #2-
Side Hustle Income-
Budget Categories for Housing
Housing is typically the largest line item for most families. This budget category includes everything related to renting or owning your home (not just your rent/mortgage).
Mortgage Payments /Rent
Homeowners Insurance/Renters Insurance (if monthly)
HOA Dues (if monthly)
Water & Sewer
Cell Phone Bill
Budget Categories for Transportation
You might immediately think of gas for your car, but this category includes a few more things you should have in mind.
Car maintenance (like oil changes, new tires, big tune ups)
Budget Categories for Food
For our family, this is the budget category we struggle the most with. It can be tough to cut back on eating out, but seeing the numbers on paper of just how much you are spending each month is eye-opening!
Budget Categories for Personal Care
This is an area that gets left off many budgets as an oversight, but can account for a lot of expenses depending on your lifestyle.
Health Insurance (if this isn’t taken out of your paycheck)
Budget Categories for Education and/or Childcare
The price of childcare or school tuition can be a huge amount for many families, so if you are paying for these be sure to have them on your budget! This category also includes expenses related to childcare or education for your children.
Private School Tuition/College Tuition
Before/After School Care
School or Camp Registration Fees
Budget Categories for Kids
In addition to planning ahead for the cost of education, any parent can tell you that kids come with a wide variety of extra expenses too 😉
Private lessons or sports
Fun extras (like toys, art supplies etc)
Holiday things (Christmas outfits, Halloween costumes etc)
Diapers & Baby Food (if you have little ones)
Misc. Outings and Fun
Budget Categories for Pets
If you have fur babies you probably think of them as a member of your family. Pets come with unique costs, especially when you need to take them to the vet.
Budget Categories for Entertainment
Anything you like to do (or plan to do) for fun can be part of this area.
Streaming Services and Subscriptions (Disney+, Hulu, Amazon Prime, magazines etc)
Movie Theater Tickets
Concerts & Festivals
Budget Categories for Gifts
Important birthdays coming up? Holidays on the horizon? Plan ahead by adding this into your budget. Don’t forget about teacher’s gifts for the end of the year!
Budget Categories for Work
Most jobs come with their own set of expenses that you should plan ahead for.
Uniforms or Professional Clothing
Professional Fees and Licensing
State and Federal Taxes (if you are self-employed- don’t forget about the Federal Government!)
Budget Categories for Debt
Writing down your debts can feel a little scary, but it’s incredibly important. In this area it’s a good idea to include the minimum monthly payment for each debt, unless you are capable of paying more (which you always should!).
Credit Card Payments (split this up for each of the credit cards you have)
Student Loan Payments (split up for each of student loans you are paying on)
Budget Categories for Savings
It’s much easier to save money when you include it as a line item in your family budget. Don’t leave this off!
Household Expenses (also known as a sinking fund)
Kids College Savings
Retirement (if you contribute after you receive your paycheck)
Family Vacation Fund
Foreign Travel and Big Trips
Miscellaneous Budget Categories
This category is for anything else that doesn’t fit into the above categories.
Don’t forget that you can grab my free budget worksheet and budgeting templates here to help you map out the right budget categories for you!
Irregular Budgeting Expenses
When creating your budget, don’t forget about the line items that only occur a few times a year (or even once a year,) but that you already know will happen. For example, HOA dues, annual car registration, indirect costs from other purchases and yearly subscription renewals.
If you don’t plan ahead for these irregular expenses, when they come up they can throw your whole budget for a loop and result in you feeling stressed out and frustrated.
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Budgeting Categories Are Key to Helping You Reach Financial Independence
Budgeting is a key skill that can be learned, and one that can truly help you find extra money so you can pay off your debts, cover unexpected expenses that pop up and save for the future. It’s a great first step towards a better spending plan, credit score, debt repayment plan and so much more!
While I shared over 100 monthly budget categories on the above list, you absolutely do NOT have to use all of them! Choose the ones that make the most sense to you, your situation and your goals as you build your budget. Whether you use separate envelopes, a budgeting app or different colors to indicate different spending categories, these budget categories can truly help you with your personal finance goals.
Your personal budget categories might change over the year too, and that’s ok! The most important thing is that you are using a useful life system that works for you and your family. These little things are a helpful way to get on track.
I hope this article was helpful for you as you build your own budget categories. Please take a minute and share this article so that it can help other families who want to master their own budgets, too!