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