Types of Expenses to Include in a Budget

A budget is made of up income and expenses to help someone figure out where their money is going and how much they have left.  Expenses are the payments that someone makes for things.  Expenses make up the side of the budget that outlines where your money goes.  Having a good grasp of your expenses is often the most difficult part of maintaining a budget and not understanding is a common reason for poor money management.

It is very important to know your expenses and the number one way to really understand them is to track them.  Not for just a month or two.  A continual tracking of expenses keeps your budget in check as well as allows you to make changes to it over time as you see categories needing an increase or decrease in how much you have allotted for spending.

On your budget, you will list expense categories and those categories will be given an amount that you plan to spend for that category in the time frame of your budget.  For example, how much do you plan to spend on groceries each month?  Or how much do you plan to spend on gas every two weeks?  The time frame of your budget is up to you and the expense categories need to fit your life’s needs.

Let’s looks at some budget expense categories

Expenses to Include on a Budget


Gas,  Insurance, Repairs, Regular Maintenance


Mortgage or Rent, Insurance, Utilities, Repairs, Maintenance, Regular fees, Taxes, Extra Principle, Homeowners Association


Groceries, Dining


Medical Bills, Insurance, HSA/HRA Contributions, Prescriptions, Gym Memberships, Health Classes


Cell Phone, Cable, Internet, Home Phone, Storage Units,


Clothes, Non-essentials, Household Items

What Other Expenses to Include?

The categories above may not apply to you, or certain expenses within them may be irrelevant.  The point is to define a few major categories and figure out if you want to break them down.  You may not need to break them down though.  You can easily take the food category and just combine groceries and dining out for example if you do not feel a need to track them separately.

Some may want to include payroll deductions such as insurance fees taken out by your employer, 401K contributions and Health Savings.  Some would rather just account for what they pay out of pocket with the money they actually are paid by their employer.  It’s all about what makes the most sense to each individual creating their budget.

You may have other things that need their own category such as a boat or a beach house.  Maybe you want a category for your child expenses.  Maybe a category for your work expenses.  A budget must be very personal for it to be successful.  It needs to match your actual spending and financial situation.

The most important thing to remember is no matter how little or much income you earn, a budget is important to effectively manage your money.  Even if it is just the old envelop system of portioning cash to different envelopes each time you are paid, it is still helpful.  It does not need to be fancy spread sheets and calculations.

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