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Budget Categories

Creating a Budget

Did you sit down to make a budget plan? Is your head spinning around because you are not entirely sure which budget categories are there, and what to add or leave? Or your situation could be like this- you already have the budget plan set, but unexpected expenses are rising out of nowhere.

If any of these scenarios are related to you, do not panic, my friend. Today we will make a budget plan together. And not only any budget plan but a ‘real’ budget plan.

After scouring as many bank transactions and doing extended internet searches, we have a complete list of the most common personal budget categories. Or, as said above, the ‘real’ budget categories.

creating a budget
Photo by NORTHFOLK on Unsplash

What is a Realistic Budget?

It’s challenging to come across a realistic budget. All budgets tell you what your monthly schedule should contain, but what about the unforeseen expenses? They arise out of nowhere.

Budgets making is challenging. And no matter how many times we have been told to start budgeting or have been suggested apps to help stick to one, we still can not fully follow a budget every month.

Why is That? What Makes Creating a Budget so Hard?

Truthfully, for real life and all the unexpected expenses, the dozens of apps, spreadsheets, and other methods do not account. They can not help you out in situations when you are entirely unaware of the expenses. As there are plenty of expenses we have that do not take up much of our money every month, we forget to include them in the budget.

So if you are having nightmares about planning a budget, we have got your back. Below is the list of budget categories that you should never forget to include in your ‘realistic’ budget. Let us have a look.


Budget categories like food as expenses are not only limited to the items and groceries that you buy for home. It also includes transactions made in between while traveling and stopping at the gas station for short breaks or getting a hot dog at a baseball match. Do not forget to incorporate these expenses into your budget expenses. Also, any food, even if it is for your furry friend, is included in the food expense.

  • Gas station/quick-service beverages
  • Groceries
  • Pet food
  • Potlucks/parties
  • Bars.
  • Restaurants


It doesn’t matter if you’re a homeowner or a renter. You both have to think alike. All the costs like insurance, minor repairs, and dues are to be paid by both of you. So let us see some of the housing budget listings.

  • Repairs for things like appliances, air conditioning, heaters, etc., that are unexpected
  • General home maintenance of air filters, light bulbs, etc.
  • Homeowner insurance.
  • Renters insurance
  • Homeowner association dues
  • Property taxes
  • Rent
  • Mortgage

Personal Care

Everyone has to spend some money on themselves. Don’t they? But if you are more of a self-pampering person, you surely need to check how much you are spending on yourself. Make sure these are included in your budget accounts.

  • Bath and spa goods
  • Shoes and accessories
  • Haircare
  • Gym
  • Skincare
  • Makeup
  • Toiletries
  • Clothing


Having kids is expensive, no? Yes. So please do not leave them and their expenses out while preparing your monthly budget.

  • College fees, room and boarding, and other expenses
  • College savings
  • Tutoring/private lessons
  • Private school tuition
  • Magazines, educational, etc. subscriptions
  • Memberships/club dues
  • Books and toys
  • School supplies
  • Babysitting
  • Daycare
  • Children’s clothing and accessories


“Pay yourself first” applies here. Think of all your financial obligations and goals, and incorporate all of them into your budget.

  • Alimony/child support
  • Life insurance
  • IRA contributions
  • 401(k) contributions
  • Debt payments
  • Emergency fund


Almost everything that you use to run your house comes under utilities. It would help if you automated as many of these bills as you can to ensure they do not shut off the moment you need them.

  • Water
  • Electricity
  • Propane
  • Fuel oil
  • Sewage and waste management
  • Natural gas


So what does the household include? From trash can to phone call bills, everything. Just take a walk and have a look at all the things you use daily. Include them all in your budget.

  • Gardening and landscaping supplies
  • Pet care
  • Senior/parent care
  • Art and home decor
  • Appliance repairs and replacements
  • Home repair tools
  • Cleaning supplies (trash can liner, compost bags, etc.)
  • Dishwasher soap and accessories
  • Liquid dish soap
  • Other laundry supplies (stain remover, bleach, dryer sheets, etc.). Laundry detergent
  • Paper products
  • Home internet
  • Phone bills

Health Care

From unexpected medical expenses to routine checkups, you have to consider them all. Additionally, what kind of insurance you must hold to cover them all should also be included.

  • Long-term care insurance
  • Disability insurance
  • Medical devices
  • Eyecare
  • Dental care
  • Primary care copays
  • Survival/emergency kits
  • First-aid supplies
  • Urgent care
  • Prescriptions and over-the-counter drugs
  • Health savings account (HSA) and flexible spending account (FSA) contributions
  • Complementary medicine (chiropractic, acupuncture, massage, etc.)
  • Health insurance

Gifts and Giving

Birthday parties, wedding anniversaries, baby showers, and whatnot. You have to attend them all. And most certainly you can not visit without a gift. Isn’t it right? The occasions will continuously keep coming up, so be sure to include these expenses into your monthly budget and plan for the events.

  • Anniversary
  • Wedding
  • Birthdays
  • Christmas
  • Tithing
  • Charitable donations


It’s not a bad idea to spend and maintain a budget for entertainment. Everyone loves to have fun! But keeping a check over your ‘fun’ is necessary, or else it could just ruin your whole’ budget planning’ thing.

  • Books, magazines, and newspaper subscriptions
  • Electronics and upgrades
  • Vacation spending
  • Spas
  • Games
  • Outings
  • Concert tickets
  • Date nights
  • Streaming services (Netflix, Hulu, etc.)
  • Cable TV

How to wisely plan your whole budget money?

We know that budget planning, keeping track of all things, listing out each and every item, etc., can be a daunting task. And for some, it can be challenging too. Therefore, we have come up with some tricks and recommendations on how you can efficiently manage everything.

First, pick the most suitable budgeting method to work upon. It can be traditional budgeting where you list down every item and then apply expenses to it, or you can use the envelope budgeting technique where you ‘set’ a specific amount for a particular item. But wait, there are more. Let us just list all the best ones for you here. It will get easier for you.

  • The 50/30/20 budget
  • Zero-based Budgeting
  • Envelope Budgeting
  • Continuous budgeting
  • Traditional Budgeting
  • The 60% Solution
  • The 80/20 Budget
  • Value-based Budgeting
  • The Priority-Based Budget
  • Reverse budgeting
  • The Sub-Savings Accounts Method

So now you know there are quite many methods to choose from. You can do a bit of research on your own and choose the best one for yourself. However, the 50/30/20 budget rule looks best for almost everyone. In this budgeting method, you commit 20% of your income to savings and debt repayment, leave 30% of your income for wants and allow up to 50% of your income for needs.

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