9 Must-Have Budget Categories (and Percentages)

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Last Updated May 4, 2020

Are you wondering “what categories should I include in my budget?” Or “what percentages should my budget be?” Find out the different must-have budget categories and percentages you should be spending for each.

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Budget Categories You Should Have In Your Budget:

Housing:

This accounts for your rent or mortgage, property taxes, home insurance, common charges, maintenance, etc.

Transportation:

These are expenses such as your car note, fuel, car insurance, car maintenance and repairs, parking, taxis, public transportation costs, etc.

Utilities:

These are expenses such as cell phone, internet, cable, electricity, gas, and water.

Food:

This accounts for expenses such as dining out and groceries.

Entertainment:

These are expenses such as going out with friends, bars, concerts, movies, vacations, etc.

Personal:

These are expenses such as hair cuts, hair styling, nail and skincare, dry cleaning, clothes, student loans, etc.

Health:

These are expenses such as health insurance, doctor co-pays, medicine, health club dues, life insurance, and veterinarian/pet care.

Gifts/Charity:

This accounts for gifts given, charitable donations, and religious tithing.

Savings:

This accounts for your savings account, emergency fund, retirement accounts, investments, etc.

Most people go wrong when making a budget because they accidentally leave out categories that will require money at some point. That can throw your whole budget off and you feel like a failure.

If you want to get some ideas of what budget categories to include in your budget, you can download my FREE Budget Categories List. It’s a list of over 80 different budget categories.

This list is designed to cover as many personal budget categories as possible; but don’t feel overwhelmed by its size, because not all will apply to you. This free list will make sure you don’t forget to include an expense in your budget, so you can make a budget that works.

Budget Categories And Percentages: How Much Should I Allocate To Each Budget Category?

Financial experts agree, in general, that your expenses should break down as follows:

25% for your monthly housing expenses (30% if you own your house—including property taxes, home insurance, and maintenance/repairs).
10%-15% for transportation.
5%-10% for utilities.
10% for food and dining out.
10%-15% for entertainment and miscellaneous expenses.
10%-15% for personal expenses.
5%-10% for health.
10% for giving.
10% for savings.

writing down Budget categories and percentages

Remember, these budget categories and percentages are just a rough estimate of how much you should allocate to each spending category in your budget.

These percentages are not written in stone and are just an approximation. So feel free to adjust them for your particular living situation—as long as you are spending less than what you earn.

For example, the housing costs in New York City are extremely high. Which makes it very difficult for someone to find an apartment for 25% of their income.

So, they may adjust their housing expenses to 40% and reduce their transportation expenses to 5% by getting rid of their car and taking public transportation. The point is, if you increase your spending in one area, you need to reduce your spending in another.

If you’re looking for a good household budget excel template, try my Monthly Budget Spreadsheet. My Monthly Budget template makes it easy for you because it shows you what percent of your income you’re spending on each category and subcategory of your expenses.

There’s also a housing and savings recommendation that I added so you can see what amount of your income you should be spending on rent/mortgage and what amount of your income should go to savings.

This Monthly Budget Spreadsheet is the system I’m currently using for my budget, and it has helped me save over 50% of my income every month.

I’m not saying that to brag, I’m telling you that because I was in your situation—but I turned my life around. I was trying desperately to get my finances in order, and having a good budgeting system was part of the foundation for my success.

So now that you have an outline for your budget categories and percentages, make a plan for your money and give ever dollar a job!

Summary

In summary, your budget should include spending categories such as: housing, transportation, utilities, food, entertainment, personal, health, gifts/charity, and savings. Try to say as close to these general percentages as possible.

However, it is okay to make adjustments to your budget categories and percentages for your living situation. What’s most important is once you make a plan of how much you will spend in each category, you stick to that plan.

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