In order to have an effective budget, you’re going to need some basic personal budget categories to start.
Determining the budget category to use isn’t always easy, especially if you’ve never made a budget before.
Start your budget off right . . . here are some of the best budgeting categories to set you off on the right foot.
Making Your First Budget
The budgeting categories listed below won’t do you any good unless you have some sound principles behind them.
Bob has written a great article on how to make a budget that includes how to make the “world’s easiest budget” and other budgeting methods designed to save you the most money possible.
And if you prefer, you can download one of these free budgeting spreadsheets or take the Real Money Budgeting online course as well.
70+ Basic Personal Budget Categories
Below I’ve listed many basic budgeting categories, but understand that these are not necessarily prioritized. Some are essential, some are recommended, and some are discretionary – it’s up to you to figure out which are which beyond what I’ve said below. I’ve added subcategories to each major category so you can further define your budgeting categories as needed.
Remember, these are just to get you started, nothing more.
Giving puts money in perspective – and it also helps the community at large. It should be the top priority on your budget.
- Specific Needs – Consider creating a Giving Fund.
You can’t survive without it. Food needs to be very high on your prioritized budget list.
- Pet Food/Treats
Nothing like a roof over your head. This one is important too, and make sure that you can afford whatever dwelling you choose!
- Property Taxes
- Household Repairs
- HOA Dues
Don’t forget the importance of utilities. Some of these are more important than others. For example, you might choose to go without cable!
Wear something. It’s kind of socially important. But don’t go overboard here with all the latest trends – that’s for your Fun Money category to manage.
- Children’s Clothing
- Adult’s Clothing
Commute to work? Transportation is important. But you’re going to need more than gasoline and oil changes . . . .
- Oil Changes
- Parking Fees
- DMV Fees
- Vehicle Replacement – This should be for reasonable vehicle replacements; fancy add-ons should come from your Fun Money category.
Even if you are healthy and don’t have many medical expenditures, make sure you consider these categories.
- Primary Care
- Dental Care
- Specialty Care – Think orthodontics, optometrists, etc.
- Medical Devices
The goal of insurance is to pay for expenses you can’t afford but desperately need to cover. Raise your deductibles to save some money if you have a fully funded emergency fund.
- Health Insurance
- Homeowner’s Insurance
- Renter’s Insurance
- Auto Insurance
- Life Insurance
- Disability Insurance
- Identity Theft Protection
- Longterm Care Insurance
Look at your bank account and determine what household items and supplies you purchase throughout the month. Here are some common supplies . . . .
- Laundry Detergent
- Dishwasher Detergent
- Cleaning Supplies
This is just as it sounds. This category is a sort of “catch all” for anything having to do with you or your family personally. It can include subscriptions to personal items or services as well as other personal expenditures.
- Gym Memberships
- Hair Cuts
- Salon Services
- Child Support
Reducing your debt is a vital part of your overall financial health. Adding and maintaining debt causes you to pay more for items and services than you should.
- Credit Card
- Personal Loan
- Student Loan
It’s important to have a retirement plan you can depend on. With Social Security wavering, who knows if you’ll be able to depend on the government for assistance. It is often recommended to save and invest for retirement as a high priority in your prioritized budget.
Funding your family’s education is a great return on investment. Raise your income through education! Beware of funding your education through debt. Instead, save money up for your education needs.
- Financial Coaching
- Children’s College
- Your College
- School Supplies
Many financial experts recommend saving at least 10% of your income for various expenses. Here are the most common ones.
- Emergency Fund
- Hill and Valley Fund – For people with variable incomes.
- Other Savings – You can add other specific saving categories here where needed.
Whether you’re saving for gifts for your spouse, family members, or friends, make sure you write out how much you intend on spending per person per occasion. You might need a spreadsheet for this to include in your budget.
- Special Occasion
Everyone needs a little fun. If you don’t budget some fun money, you’ll end up spending money from categories you shouldn’t. Keep this category reasonably funded.
- Eating Out
- Spontaneous Giving
- Subscriptions – Such as Netflix.
Editor’s Note: Need a revised and expanded list of these categories? Check out my Budget Category Brainstormer – a beautiful worksheet for printing with 80+ time-tested categories and plenty of blank spaces for your own!
Wow – great list! My wife and I also have a category for “allowances” or “commissions” that we give to our kids every two weeks in exchange for work they do around our home.
William @ Drop Dead Money says
Very good list, and I like the sequence. Under saving, I would specifically add: car replacement savings account. Cars are mechanical devices and they wear out. They’re also expensive and not easy to afford out of running expenses. And taking out a car loan is bad practice.
The best way to do it is to add a car payment to the expense budget and put that money into a dedicated savings account. That way, you can control the car replacement decision, rather than the car. (Oh, honey, the transmission gave out – what are we going to do?)
It’s a big enough item to warrant its own expense item and savings account.
Just a thought…
Brolin Empey says
(Are you referring to failure of an automatic transmission? If yes then you could avoid buying a vehicle with an automatic transmission in the first place.)
Jonathan K says
Great list! Thanks for sharing!
We also have adult allowances. This is money each spouse get’s each month to be used as he or she sees fit. Also we have a category for work related travel since one of our jobs often requires travel at least once a month.
Savings accounts: Save up and pay cash for vacations? Save up and pay cash for car insurance (get a discount by paying every 6 months instead of monthly)? Also for couples without children but who plan on expanding their family dedicating a savings account to future baby expenses might be a good idea? Kids are expensive but totally worth it!
The only two transmissions we ever had to get repaired were manual ones!
Tie the Money Knot says
This is a fantastic list. Typically, most such lists are much more brief, yet lacking in necessary distinction between expense types. This one is better, and allows for a more refined view of analysis later. Automating expenses and having them flow through to detailed categories can help.
Why is there never a category for child care? Not all families has a stay-at-home mom (or dad). It may be by choice, by necessity, or because they have no choice (God bless the single parent!) but some families have some sort of child care cost.
Sorry for the little rant. I realize your list was not intended to be exhaustvie but I have yet to find a budgeting website/blog/article that actually recognizes some families have this expense.
Other outside-the-box categoris may be homeschooling costs, private school tuition and school supplies.
Shelly Blevins says
Thank you! This expense can often be MORE THAN RENT if there are multiple children. On a single income this can be hugely significant! On that note, single parents can have a much greater need for paid childcare if there is no other parent or supporting adults to hand off a child to when needed (such as work hours that go beyond school hours).
Tom Strauss says
Great list, pretty thorough. I also include in my budget money for replacing vehicles, furniture and appliances, and computer equipment.
The Hill's says
TAXES : We pay an estimated city income tax on a quarterly basis and have to budget for it monthly. I am a budget dufus and have no clue where I would add this in my categories.
Lisa B. says
I like the categories. As a modern day homesteader and keeping “The Tightwad Gazette” as my secular bible, my pet food expenses probably exceed most households (chicken feed, rabbit feed, and lots of hay…especially once I add goats, sheep and ponies to the mix (all in due time)) but other expenses are a lot less. My chickens lay eggs so I don’t have to buy them and I can/do sell the excess. The same for the ducks. They provide fertilizer and I compost everything that can be composted so I don’t have to buy fertilizer at the store but I do occasionally have to purchase topsoil and container or potting soil. This is a regular expense as I am continuously expanding my growing spaces. I have yet to get a colony of honeybees to survive through a winter so re-queening is an expense, too. And I have business expenses as I have a home-based business. For anyone with a home PC (most of us), there may also be a printer so ink is a regular expense. I clean with natural products (white vinegar, baking soda, etc.) so that expense is less. My clothing, other than personal items like socks and under garments, I usually purchase at the local thrift store and I go on Wednesdays, 1/2 price day. There are some categories here that I don’t use. I don’t have children so I also don’t have the necessary expenses that comes with parenthood. However, I make up for it with the farm. Overall, this was a great list, a great way to get started with a budget if you don’t already have one and to re-vamp one if you do. Thank you for sharing!
John Frainee says
Hey Lisa, thanks for the kind words! I’m really glad you like the budgeting categories.
Brolin Empey says
Use a laser printer, which uses toner instead of ink? If you use a printer then you also need paper.
Steve P. says
Great list. The only thing that comes to mind quickly is “Property Taxes”, for those who don’t pay through an escrow account at their mortgage lender.
Another category is jewelry! It should be separate from clothing for people who buy alot of jewelry.
Who on earth buys that much jewelry. that you would need to make it part of your budget ???
Daniel Linn says
Thankyou. This was helpful for me on making my first budget.
John Frainee says
I’m so glad to hear that Daniel! Thank you. Budget on!
A suspense category because at the end of the day there is always something more or less when you check your balance.
IT IS AWESOME .IT HELPED ME IN MY PROJECT
Very helpful, thank you!
John Frainee says
So glad to hear it Mashael!
susan moore says
This is a great list (better than any I’v found so far) but I am one to make things a little more difficult than they need to be. I realize that & I am in real need of more concrete answers. Everywhere I look on the internet or in book stores has vague grey lessons on how to create budget categories that’s right for you……I’m ocd & want specifics. That being said, Where do things like bandaids go? I’m guessing toiletries? vitamins are food or health??? & what about over the counter pain medicine??? I really need black & white answers because I split hairs in my head & go back & forth each month thus causing myself more work & stress & then I give up. Then I just spend all from the same pot & have to start all over again. Please don’t ignore this or tell me to put it in a category that makes sense for me.
jeremy mann says
Vitamins would go under health/fitness. Medicine and Co pays would fall under medical
To simplify things, I include things like Bandaids and vitamins in a ‘grocery store’ category. This category also includes things like soap, laundry detergent, toilet paper etc. (basically anything I get at the grocery store). This may be too vague for you, but for me, stream-lining is key or I would get caught up in the details and give up too quickly.
Oh my I am laughing here! Wow, I am glad I am not the only one!! It’s 4 years since you posted this comment I’m wondering if you found what works for you and how you came to figure this stuff out. These odd little items really throw me as I don’t know WHAT category to add them to and then the next time I can’t *remember* which category it went in and then it drives me nuts and so I don’t ever completely get a budget going. The whole “grocery store” category not to mention “grocery section” in our store has things that I see some people will categorize in various other categories and they all make sense so then I don’t know what to do. Then It’s just more trouble than I can stand and I quit. Our “grocery store” has several departments that even those get a little fuzzy on how to catagorize. I have seen stores that will catagorize right on the receipt the different categories. Why can’t they all do that?
I think somehow it’s important to keep it simple. Not TOO many categories. I like the replies to your commment here.
I think it might help me to keep a list of catagories and list what all goes in them and add to it as necessary, making the decision as you go as to what category those odd little items will fall under. That makes sense today. Hopefully it will if I ever get a budget going.
budgeting helps me alot.
Beth Hauer says
I don’t recall seeing lawn or yard care on your list. Or snow removal. I suppose hobbies would go under Entertainment, but if somebody spends a lot on his/her hobby then he or she might want to add a category for Hobbies.
Good point! Maybe a Home Maintenance category?
Hi! I am currently doing a budget template but I am quite confused on where to put the following and what percentage of income should these be?
Health Insurance (I pay this annually and pay-out for this is when we only get sick or when we reach age 65. sorry had to explain because this might be different from the insurance you pay there. I am from the Phils). Is this part of our savings?
Educational Insurance (more like a college fund)
Tuition fees and School Supplies – Some sources I found on the web include this as part of Miscellaneous but this is a necessity so why should it be under Misc?
Life Insurance – shouldn’t this be part of savings?
I know there is a separate category for insurance in your article above but I am thinking that insurances should be part of your savings. Is it?
And lastly, if you budget for all categories above what percent of income should we allot for each? Like Fun Money? What percent?
Thanks for your help.
I love budgeting and making sure my money goes further and I am heartened to see so many budgeting things around but some people don’t share my enthusiasm.
Most people think budgeting is hard and to see a 70+ line item page will get overwhelmed. I think making it simple for people is the way to go. If it is too time consuming or difficult people won’t do it.
I agree that giving should be an important part of your budget, but I find it a bit ludicrous to have it listed as the top priority. Good article and list otherwise!
Yahjam Brian says
Unlike Ian who commented above, I absolutely love how you place giving at the top, even before food. It is a fact that when we give out of love, we receive more than we give. All in all, this is a fantastic list.
this is awesome !!! thank you
Danielle Ogilve says
I love how detailed this is! Also, love how the comments add on to the list! Definitely helps with budgeting.
John Fixsen says
Jesus said to sell what you have and give it to the poor. And unless we forsake all that we have, we cannot be his disciples. And, why do we call him “Lord, Lord” and don’t do what he tells us to do. Hypocrites! Get rid of the evangelical façade of having it all together. Get reckless and give it all away! Then we will have treasures in heaven.
laser yag says
Very well written post. It will be supportive to anybody who usess it, including yours truly :).
Keep up the good work – i will definitely read more posts.
Youtube to mp3 says
Excellent write-up. I certainly appreciate this website.
Stick with it!
Sam Harris says
Excellent information provided thanks for all the information I must say great efforts made by you. thanks a lot for all the information you provided.
Under which category shall we keep big purchases like TV, refrigerator, dishwasher etc.?
Kiera Desmarais says
I put those under savings. That’s where I have sinking funds listed.