What should be in the monthly budget?
Good question. There is no easy answer, a budget is more than housing, food, and transportation. There are so many other categories to consider. You might be missing some huge items without even realizing it.
Before we get into all the categories. I want to make sure you know this is not meant to overwhelm you, which can do way to easy. So take this in stride. The list is to help you to determine what is right for you with your budget.
First, let’s begin with the basics:
Home
- Mortgage/Rent
- HOA Fees
- Property Tax
- Maintenance
Food
All food expenses go here. Even take-out, and the baby formula goes here. Make it a big category helps to keep take-out spending in check. Also, if you make a schedule of what meals you will have on what days. This helps with overspending on the food you may not need for the month.
A great app I use is “Out of Milk” it allows you to put in the item with the amount plus the cost if there is tax. Then it gives you a total at the bottom, so if you are on a fixed income for food, this works out well to let you know how much you can get for your money. A place to keep recipes. It also informs you of great deals at local stores. You have to put in your location for this feature.
Note it is recommended to keep a six month supply of food storage on hand in case of emergencies. You will want to use the old items to replace them with the new ones you buy within the month to keep your food stock updated.
- Groceries (Base this on daily meal plan expenses)
- Take-out or dining out
- Baby food, snacks, and formula
Utilities
Everything you need to have in your home to keep your lifestyle running smoothly. Yeah, ok, so you may not need cable or internet, but if you are going to have them, then this is where it should be categorized.
- Electric
- Water
- Trash
- Gas (Propane/Natural)
- Cell Phone
- Cable
- Internet
Pets
I love my dog would trade him for the world he is apart of our family. As such, he has expenses as well.
- Food (This includes treats)
- Medication
- Vet Visits
- Accessories (Leases, shampoo, Disposal Waste Bags, Brushes, Toys, and Clothes)
- Animal Boarding (If required)
Clothes
Any clothing needed comes from this category. Note if you buy clothes for work/school keep receipts, you might be able to use them as a tax right-off. Even if you buy any of these second hand, you want to account for these expenses.
- Kids Clothes
- Adult Clothes
- School Uniforms
- Work Uniforms
Transportation
Everything mode of transportation in which you use needs to go into this category.
- Car
- Payments
- Gas
- Maintenance
- Parking Permits
- Cabs
- Uber/Lyft
- Bus
- Plane
- Train
- Boats
- Fairies
- Yachts
Medical
Anything to do with a doctor or dentist goes in this category.
- Doctor Visit (Including Hospitals and Specialists)
- Co-pay
- Medications
- Eye Doctor
- Examines
- Glasses
- Case
- Chain
- Cleaning Cloth
- Contacts
- Case
- Solution
- Dentist
- Co-pay
- Any denture items
Insurance
It is crazy not to have insurance. Living here in Texas, I have seen why it is crucial to have insurance. I saw what people went through when they had no insurance, they lost everything. Yes, the people how had insurance lost everything as well. However, the money they got from their insurance companies helped them to recover much faster. Don’t ever think you have too much insurance. A disaster can change your outlook, real quick.
- Health
- Dental
- Life
- Disability (Short and Long Term)
- Car
- Renters
- Homeowners
- Flood
- Wind
- Personal Property (the valuables within your home)
Credit/Loan
Any loans other than your mortgage or car payment go here. The goal is to get these paid off and to keep them at a zero balance. To do this, you will need to may more than the minimum monthly amount due. You need to add extra to cut down on the interest. Only this will allow you to pay off your balance faster; otherwise, it a vicious ongoing circle.
- Credit Cards
- Personal Loans
- Student Loans
Retirement
You might think why do I need to start now. I have a lot of years before I will even consider retirement. Well, the sooner you start, the better off you will be your funds will have a longer time to grow with the interest it can accumulate. This will give you more money in the long run when it is needed. It can be more lucrative than your savings. I recommend you diversify if you choose to invest in the stock market.
- Contribute to 401K
- Stock Market
- Investments
Savings
Have you ever heard the saying, “Save for a rainy day!” There is a reason our parents and grandparents always mentioned it. They were raised; you put money away instead of borrowing money. As a nation, we have gotten away from this. One we desperately need to get back to. So why should you save here you go:
- Unexpected Illness (Let me tell you nothing scarier than getting sick not knowing when you can work again)
- Job Loss
- Unexpected Vehicle Repairs
- Family Matters
- Death
- Disability
Types of savings plans to have
- $1,000 Emergency Fund (short term)
- 6 to 9 months of an emergency fund (Long term Monthly Expenses)
- College fund for kids
Household Supplies
Anything you would use in your home goes into this category. I actually add this to my “Out of Milk” app to keep track for I shop at Walmart.
- Paper Products
- Cleaning Supplies
- Detergents
Personal Care Items
Here is where you will want to put the items you and your family uses to care for yourselves. I also add this to my “Out of Milk” app.
- Shampoo/Conditioner/Hair Spray/Mousse/Gels
- Lotions
- Perfumes/Colognes
- Haircuts
- Hair dyes
- Waxing
- Manicures/Pedicures
- Makeup
- All other cosmetics
Education
In this category, you will want to put any kind of schooling for anyone within your family attends.
- School Tuition
- School Supplies
- Books
Work
This category is for the entrepreneur, yeah, you know who I am talking about all you folks brave enough to work at home. Whether it be full-time or part-time. You want to keep track of all expenses for your taxes.
- Office Supplies
- Square footage of your home office (Less you rent a space outside the home)
- Conferences
- Travel
- Lodging
- Business Utilities (Cell Phones, Electric, Internet)
Special Occasions
This is for those times a year when we have to spend a little extra to enjoy time with our loved ones and friends:
- Birthday Party/Gifts
- Anniversary Party/Gifts
- Wedding Gifts
- Holiday Decorations/Gifts)
- Any other special occasion.
Giving
This category is for when you give to others:
- Tithing – 10% is what the bible states. It doesn’t have to be money; it can be you donating your time or talent.
- Charity
Fun Money
These are for when you want to get out of the house, do something outside of the daily ritual call life. You work hard, you should be able to have some enjoyment. However, to be able to afford to do this, you need to budget:
- Gym Membership
- Entertainment
- Vacations
- Date nights
- Babysitting
- Alcohol
- Tobacco products
Again, don’t let this long list overwhelm you. Many might not apply to you. If all the categories do, apply you have a better understanding of what you need to work into your budget. Yes, I know it can be immensely hard. You might not have enough money to budget everything every month. If this is the case, do the main living expenses first, the loan/credit cards (I add food, household, and personal care together). If you need to rotate the rest of the categories every other month. At least you have some money going into those accounts they will build in time. As you pay off the credit cards/loans, add the money from them to your savings. The bottom line is you can start off small it will grow in time to help you in the long haul.
I hope this post helps, I know what it is like to live on a tight budget struggling to make ends meet each month. Don’t feel you need to do it all at once. As long as you put money away, you will be better off than if you had done nothing.
If you liked this post want to see more, please subscribe below:
Karen Carnahan 