Defining Expenses

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Introduction

Defining your expenses will give you insight into what you spend your money on. The best way to do this is to make a record your expenses and organize them into budget categories. This will form the basis of your personal budget. You can use the spreadsheet on the Personal Budget Tools page to record your expenses.  You can find a list of common personal budget categories in the spreadsheet and at the bottom of this page.

You can also use the Budget Allocation Tool to get an idea of how much money you should be putting towards each of your main budget categories.

When you have an understanding of what you spend your money on, you will be able to prioritize your expenses. This will help you identify how much of your income is needed to cover necessities, and how much money you can spend or save how you want.

Tracking your Spending

The easiest way to define your expenses is to keep track of what you spend your money on by keeping all your receipts. See the page on Tracking Spending for some techniques on how to do this.

Calculating Expenses

You can get a rough idea of your expenses by looking over you bills and receipts for last budget period. This information will be refined as you continue to track your expenses and use your budget.

When calculating your expenses, you should account for at most 90% of your income. You can use the extra 10% of your income for unexpected costs or opportunities.

Budget Categories

Here are some ideas for personal budget categories. The most common budget categories are listed here. If you can't find what you need on this list, you can always use your own.

Food Housing
Groceries
Dining out
Snacks, coffee breaks
School lunches
Home food production
Rent payment
Mortgage payment
Property tax
Condo fees
Property insurance
Utilities Household supplies
Gas
Electricity
Oil
Water
Cable
Telephone
Internet
Satellite
Garbage pickup
Cell phone
Laundry supplies
Cleaning supplies
Furniture
Appliances
Dishes and cutlery
Cooking supplies
Linens
Soap and shampoo
Facial Tissue
Household Operation Home Office
House cleaner
Yard maintenance
House repairs
Safety deposit box rental
Yard improvement and supplies
Stationary
Postage
Car and Transportation Personal
Gas
Insurance
Maintenance
Licensing fees
Taxi
Bus/subway/train expenses
Parking
Haircuts
Beauty shop
Cosmetics
Toiletries
Shaving supplies
Health Clothing
Medical and hospital costs
Health insurance
Doctor, dentist
Medicine
Glasses
Hearing aids
First aid supplies
Treatment and therapy
Clothing for self
Clothing for children
Clothing for spouse
Alterations
Cleaning
Education Recreation and Fitness
Tuition
Books
Stationary
Courses/lessons
Sports equipment
Club membership
Movies
Events
Pets Gifts and Contributions
Gifts
Cards and wrapping paper
Flowers
Charitable donations
Investments
Emergency fund
Interest
Banking fees
Child care Miscellaneous
Daycare
Babysitter fees
Books
Newspaper
Music
Big items  
Car
Vacation
Home electronics (TV, computer, etc.)
 




Related Pages

Why Budget
What Is Needed To Make A Budget
How To Budget
Calculate Income
Defining Expenses
Tracking Spending
Personal Budget Example
Personal Budget Tools
Budget Allocation Tool