Categories for your personal budget

Categories for your personal budget

To manage your finance first thing you should do is to understand your incomes and expenses. That is by noting down the incomes and expenses for one month. For planning and making a budget you should now categorize the incomes and expenses. In this section we are going to list out some categories for your personal budget preparation. After identifying your expenses, you should categorize the expenses into the category that exactly have meaning to you. Sometimes the expenses may be in another category that is not listed here. You always remember that the list I given here is not at all a full list. You can add along with it the category that you come across in your understanding. Each person will have different items.


Categories for your personal budget

It is important to understand categories for your personal budget. Below is a list of categories for your personal budget. It is not in any particular order. It is always depends on you which one is essential, which one is not important to you. But surely this list will give you an idea about how to start your planning with categorizing the expenses. That is all about it.


1. Food

This item you cannot neglect from your life. So all person will have this category in their list. Food category can involve different expense items in it. Some are as follows:

  • Groceries
  • Vegetables and fruits
  • Non vegetables
  • Milk and other related items
  • If you have small children, special food for them
  • Food outside (Restaurant)
  • Treats
  • Food for pet

2. Shelter

This is another important thing you cannot avoid from your list. You and your family should stay somewhere. It needs some money for it. If you own a house the expenses may be different from one who is not having house of his own.

  • Rent
  • House maintenance
  • Painting the house
  • Property tax

3. Clothing

It is one of the basic necessities. If you go for fancy items of latest trend you will be out of funds. Purchase of fancy item can be included in other category of entertainment and fashion. This category is for basic day today requirement of cloths.

  • Cloth for children
  • Uniform cloths
  • Cloth for adults

4. Transportation

Everybody has to travel in these days. You cannot avoid travelling. It may be to your workplace or to any other place. It may be by public transport or by your own vehicle, but you need to spend some money in this category every month. The expense on this category may vary depends upon changes in oil prices.

  • Fuel
  • Maintenance
  • Public transport expenses
  • Repairs
  • Parking fees

5. Utilities

Utilities are other expenses we have with respect to our usage of some items. The expenses may be reduced by controlled use but now a days we cannot make it zero. That means we can’t live without some of the following now a days.

  • Electricity charges
  • Water charges
  • Phone and internet charges
  • TV and cable charges
  • Garbage charges

6. Medical

This expense can come at any unexpected time. So you must consider this category in your list. Somebody needs regular medication need to put more in this category.

  • Primary medical care
  • Dental Care
  • Regular medication
  • Unexpected fund for medical expenses

7. Insurance

Some expenses come unexpectedly. This will put you into financial crisis. To protect you from financial crisis insurance is the option. By spending some amount you will be covered for large amount. There may be some insurance which are acts as a savings or as investments also. Some types of insurances which are common now are listed below:

  • Life insurance
  • Health insurance
  • House insurance
  • Vehicle insurance
  • Renter’s insurance
  • Disability insurance
  • Theft protection insurance

8. Education

It is one of the investments you can make for future. Save money for your child’s future education. Spend some money for education, the return will be more.

  • School supplies
  • Books
  • Travelling
  • Conferences
  • College education
  • Other activities
  • Extra curriculum training

9. Savings

Savings should give importance in you plan. Minimum 10% your income should be set aside as savings every month.

  • Emergency fund
  • Protective fund: Put nine month expenses as protective fund for your variable income.

10. Household items

You need to purchase household items for daily use. These includes

  • Toiletries
  • Cleaning items
  • Tools for house use

11. Personal expenses

Some personal expenses are there for you and your family members. It may be some subscriptions, personal uses etc.

  • Haircuts/Salon services
  • Cosmetics
  • Gym/ Yoga fees
  • Subscriptions
  • Baby sitter
  • Child support

12. Loan Payment

Take loan only in urgency. Use credit cards like cash. If you have debt, reduce it by paying off each month. A suitable amount should be set apart for the repayment of loan.

  • Mortgage
  • Credit Card
  • Personal Loan
  • Education Loan
  • Vehicle Loan

13. Investments

You should also think about investment plans. This may be retirement plan or any other investment plan. Get proper advice from a consultant before making investment. Get some knowledge about all the investment activities and choose the one which suits you.

  • Retirement plan
  • Bonds
  • Mutual funds
  • Fixed deposits
  • Cash certificates
  • Securities

14. Charitable Contribution

This is a fund you can set aside for giving. This will improve your social nature. Make it as a life style. The fund includes the following items:

  • Offerings
  • Tithing
  • Charities
  • Social activities

15. Gifts and Celebrations

Sometimes you cannot avoid giving gifts or celebrating some functions or festivals. You should set aside some money for it. This planning helps you from overspending in these situations.

  • Birthdays
  • Anniversaries
  • Festivals
  • Wedding
  • Other occasions

16. Entertainment and Fashion

If we put all our time in busy schedules, it will not give you any happiness. Some entertainment is also a requirement. But if full money is spending on entertainment, you will be in trouble.

  • Games
  • Outing
  • Tour
  • Vacation
  • Subscription
  • Other entertainment

17. Variation Fund

I suggest you to add one more category in your list is variation expense. Now a day’s all expenses are changing day by day. So there may be a variation in you expenses which may not be listed out. This can cause in putting up budget. If this fund is not used, put it in the savings fund and you can use it there.


18. Taxes

Putting aside correct amount of tax is also important. We cannot neglect tax payments.


Leave a Comment

Your email address will not be published. Required fields are marked *