what things should i include in my budget

Budget Categories You Must Include In Your Budget

• 1. Rent/Mortgage The very first thing you need to include in your budget is shelter and housing. ...
• 2. Utilities If you want to, you can create a separate category for utilities. ...
• 3. Phone/Internet These days, your phone and internet are both required for jobs and entertainment, so you should definitely include them in your budget. ...
• 4. Automotive ...
• 5. Groceries/Food ...
• 6. Entertainment ...
• 7. Savings ...
• 8. Medical/Healthcare ...

Full Answer

What should go into a budget?

What’s Included in a Well-Balanced Budget?

• Your Net Pay. Your take-home pay, also known as your net pay, is your income after the deduction of taxes, benefits and other contributions.
• Emergency Expenses. Can you cover a $1,000 emergency expense without using a credit card? ...
• Irregular Expenses. Irregular expenses include any bills that are infrequent but easily predictable. ...
• Monthly Living Expenses. ...

What your budget should include?

What your budget should include

1. Costs. To forecast your costs, it can help to look at last year's records and contact your suppliers for quotes.
2. Revenues forecasts (sales forecasts) To help you forecast what cash you expect to receive (revenues) you should look at your records for the previous year.
3. Profit forecasts. ...
4. Projected cashflow. ...

What should your monthly budget include?

Typical expense categories include:

• housing (mortgage or rent payment, taxes, and homeowner/rental insurance)
• utilities (cable, phone, electricity, gas/propane, water, garbage collection)
• transportation (auto loans, public transportation fees, parking, insurance, and fuel)
• food (groceries and dining out)
• clothing
• debt payments (student loans, credit card debt, and personal loans)

More items...

What is included in a personal budget?

What to Include in a Personal Budget

• Review Your Income. Every budget begins with a person's total monthly income after taxes. ...
• Examine Your Expenses. The next step in creating a budget is to list categories that cover all of your expenses. ...
• Include a Savings Category. Savings is an important part of every working budget. ...
• Record Your Budget. ...

What are the categories of budgets?

Why is it important to make a budget?

What is a budget, and what does it do?

How to reduce recurring expenses?

Why do we need timelines in budgeting?

How to run a budget without cutting costs?

What is the purpose of budgeting?

See 2 more

What items should a budget include?

25 Things to Include in Your BudgetRent.Food and Groceries.Daily Incidentals.Irregular Expenses and Emergency Fund.Household Maintenance.Work Wardrobe and Upkeep.Subscriptions.Guests.More items...•

What are the 5 categories you should include in your budget?

Budgeting 101: Personal Budget CategoriesA list of recommended personal budget categories is a great place to start when creating a budget. Here are two ways you can get the most out of the list:Housing.Transportation.Food.Utilities.Clothing.Medical/Healthcare.Insurance.More items...

What are 3 things that should be included in a budget?

Allow up to 50% of your income for needs Your needs — about 50% of your after-tax income — should include: Groceries. Housing. Basic utilities.

What are 10 categories of a typical budget?

The Essential Budget CategoriesHousing (25-35 percent) ... Transportation (10-15 percent) ... Food (10-15 percent) ... Utilities (5-10 percent) ... Insurance (10-25 percent) ... Medical & Healthcare (5-10 percent) ... Saving, Investing, & Debt Payments (10-20 percent) ... Personal Spending (5-10 percent)More items...•

What are the 7 steps in a budget?

7 Steps to a Budget Made EasyStep 1: Set Realistic Goals.Step 2: Identify your Income and Expenses.Step 3: Separate Needs and Wants.Step 4: Design Your Budget.Step 5: Put Your Plan Into Action.Step 6: Seasonal Expenses.Step 7: Look Ahead.

What are the 7 types of budgeting?

The 7 different types of budgeting used by companies are strategic plan budget, cash budget, master budget, labor budget, capital budget, financial budget, operating budget.

What is a good monthly budget?

The basic rule of thumb is to divide your monthly after-tax income into three spending categories: 50% for needs, 30% for wants and 20% for savings or paying off debt. By regularly keeping your expenses balanced across these main spending areas, you can put your money to work more efficiently.

What are basic living expenses?

Basic cost-of-living expenses include housing, food, transportation, child care, health care and other necessities, according to the Economic Policy Institute. Cost-of-living expenses can vary from person to person because of factors like lifestyle and family size.

What does a good budget look like?

Setting budget percentages That rule suggests you should spend 50% of your after-tax pay on needs, 30% on wants, and 20% on savings and paying off debt. While this may work for some, it's often better to start with a more detailed categorizing of expenses to get a better handle on your spending.

What are things people forget to budget for?

Easily Forgotten Monthly ExpensesPest Control. Having your house chewed up by tiny bugs or covered with spiders usually decreases its value. ... Organization Dues. ... Annual Checkups and Copays. ... Home Maintenance. ... Special Occasions and Gifts. ... Taxes. ... Annual Subscriptions and Memberships.

How do you prepare a budget?

The following steps can help you create a budget.Step 1: Calculate your net income. The foundation of an effective budget is your net income. ... Step 2: Track your spending. ... Step 3: Set realistic goals. ... Step 4: Make a plan. ... Step 5: Adjust your spending to stay on budget. ... Step 6: Review your budget regularly.

What are the 4 main parts of a budget?

Know the Four Components of a BudgetNet Income. This is the income you take home from each paycheck. ... Fixed Expenses. All expenses are not created equal. ... Flexible Expenses. Like the name suggests, these expenses are flexible in how much they cost. ... Discretionary Expenses. These are your wants. ... Start Building Your Budget.

What 5 steps should you complete when setting up a budget?

Creating a budgetStep 1: Calculate your net income. The foundation of an effective budget is your net income. ... Step 2: Track your spending. ... Step 3: Set realistic goals. ... Step 4: Make a plan. ... Step 5: Adjust your spending to stay on budget. ... Step 6: Review your budget regularly.

What are the four main budget categories?

The Four Main Types of Budgets and Budgeting Methods. There are four common types of budgets that companies use: (1) incremental, (2) activity-based, (3) value proposition, and (4) zero-based.

What are the 4 main parts of a budget?

Know the Four Components of a BudgetNet Income. This is the income you take home from each paycheck. ... Fixed Expenses. All expenses are not created equal. ... Flexible Expenses. Like the name suggests, these expenses are flexible in how much they cost. ... Discretionary Expenses. These are your wants. ... Start Building Your Budget.

20 Common Budget Items Your Monthly Budget Should Include | Mint

15. Car Registration. Most people budget for gasoline costs, but people often forget to budget for car registration costs. In some states, like California, car registration can be fairly expensive, so you’ll want to account for it in your budget so you won’t be surprised when you get that notice in the mail that your current registration is about to expire.

The 6 Budget Categories You Need for Your Simple Budget

Do you suck with budgeting? Traditional budgets just not working? Check out this great beginner budget with 6 simple budget categories. Can easily be combined with other methods like Dave Ramsey's Cash Envelope method. Click here to read more and get control of your spending today!

What are the categories of budgets?

All the budget categories can be clustered into five essential things: income, fixed expenses, variable expenses, discretionary expenses, and personal financial goals. Fixed expenses are ones you cannot do without, like rent, food, and insurance. Variable expenses change from time to time, like home maintenance costs, clothing, and transport. Discretionary expenses are specific to your life scenario, and personal financial goals are savings and pension schemes. These five basic elements are the foundation of a simple budget and can help you to break down all the categories you want to have in yours.

Why is it important to make a budget?

Living with a budget will change your life, and it is important to make the right one. Do not be very harsh on yourself , as this will only push you to abandon it after a few months. This is why you need to do some due diligence and get a few things right before making a budget. These will go a long way to ensure that you make the right budget for your lifestyle.

What is a budget, and what does it do?

In simple terms, it is a plan outlining how you will spend your money. It gives you a clear picture of how money flows into your accounts, from work, side gigs, and profits, and illustrates how it flows out.

How to reduce recurring expenses?

Once your expenses are lower than your income, boost your savings as opposed to increasing your spending. Recurrent expenditure won’t go away in your budget, and try to reduce them as much as possible. If you have debt and clear it, redirect most of the money you used to pay the debt into savings, as this will help you achieve your goals much faster than anticipated.

Why do we need timelines in budgeting?

Timelines on budgeting goals help you understand how much you need to contribute monthly to achieve them. It helps break them down into the long, medium- and short-term goals before going into the specifics. Time limits also help change priorities as you can put more money in the short-term ones and less in the long-term ones. You will be required to make some trade-offs and sacrifices to achieve some of these goals, and timelines will help you put the right ones.

How to run a budget without cutting costs?

The more funds you can free, the shorter it will take to achieve the goals. The first place to start is by assessing your lifestyle and how your typical day looks like. Narrow down to all the instances you spend money, such as lunch, coffee, or fuel. These costs might seem small, but they add up to significant amounts in the long run if you do the math. Have the expenses you can forgo on standby, and the process will be easier.

What is the purpose of budgeting?

Budgets can do many things to you, but the main one is keeping your finances in control. It gives you a sense of direction and the foundation needed to have short, medium- and long-term financial plans. Think of it as the tactical measures you put in place to achieve a strategic goal. It zeroes down to every cent you spend and ensures you have some discipline on how you spend your money.

What are the expenses that should be included in your monthly income?

But be sure that you are allocating a portion of your monthly income to paying rent and other associated living expenses, like water, electricity, and heating or air conditioning. 2. Food and Groceries. Food can be a pretty big expense if you don’t budget wisely.

Why do long vacations require a budget?

Vacationing is a whole different story. Typically, long vacations require their own distinct budget because there are so many costs associated with longer trips.

Why is it so hard to budget for one-off expenses?

4. Irregular Expenses and Emergency Fund. It’s difficult to budget for one-off expenses because you won’t know about them in advance, but you should always have some money set aside for them. If you learn about an impending expense (like a wedding) you won’t be caught off guard.

Why is it so hard to budget for entertainment?

It’s difficult to budget for entertainment because you might never know when you’re going to be doing something fun (some people prefer to be very spontaneous with their entertainment activities). When you’ve itemized all your living spaces, determine how much money you have left over and set aside a decent portion of it for entertainment purposes. Even if you don’t use your entire entertainment budget each month, you’ll be able to put the extra cash away in savings or roll it over to the next month.

Do you have to budget for car registration?

Most people budget for gasoline costs, but people often forget to budget for car registration costs. In some states, like California, car registration can be fairly expensive, so you’ll want to account for it in your budget so you won’t be surprised when you get that notice in the mail that your current registration is about to expire.

Can food be a big expense?

Food can be a pretty big expense if you don’t budget wisely. If you’ve moved out and have a new job, you might get carried away going to new restaurants and ordering appetizers, dinner, and drinks on a regular basis. Don’t fall into this temptation; instead, add food costs to your budget, and set aside a fixed amount for eating out. The majority of your budget should be put toward groceries, which will save you money long-term.

Is house maintenance an expense?

Household maintenance is an inevitable living expense. If you hire cleaners to clean your apartment once a month, or take your car to the carwash, be sure to include these costs in your budget. Household cleaners, repairs or replacement for damaged appliances, and furniture cleaning can all be expensive as well, and you should remember to budget for these.

Why do people stop budgeting?

The main reason people stop budgeting is that they aren’t creating realistic budgets for the things they’ll actually spend money on . When it comes to budgeting, it’s important to be realistic and account for your actual expenses.

Why is personal spending important?

Personal spending money is so important. This helps you not feel so restricted when you’re budgeting. It helps you stay on the path to debt freedom or building wealth.

What is variable monthly expense?

Variable monthly expenses change from month to month. For example, your water or electricity bill might change each month depending on usage. Some of these can be fixed expenses if you’re on a budget billing.

What can a kid's section be?

The kid’s section can get large. This can be anything they need from allowances, entertainment, and any other miscellaneous expenses they have.

How to save for college for kids?

There are a ton of ways to save for your kid’s college fund. You can start with a 529 plan or by asking a trusted financial advisor.

Do you have to include insurance in your budget?

Don’t forget to include all of your monthly insurances to your budget. Some of these may be paid for by you and/or your employer and already be deducted from your paycheck.

What should I put in my budget?

These include things that you can’t avoid paying – food, shelter, transportation. I also included a few categories that I highly encourage you to put in your budget. These are things like savings that, even though not required, will rescue you when you need it.

What is a budget plan?

A budget is a plan you set up that prepares you for how you are going to spend your money. The idea is that a well-planned budget will give you the money you need when you need it. It will also show you how much more you need and where you need to cut back. The categories you place in your budget are very personal and depend on what you currently ...

How long is the budgeting basics course?

Ready to get started with budgeting but still feel like you need more support? Then my FREE Budgeting Basics Email Course is perfect for you. In this 6-day course, you’ll learn how to write a budget, start using cash envelopes, and get started on your debt free journey.

What is budget category?

A budget category is a name you give a specific type of withdrawals. Before you create your budget, don’t just use the categories we give you. You should only use the ones that apply directly to your spending habits. Go through the past 3 months of spending and organize and categorize your spending.

What is the best tool to track your budget?

There are so many different methods you can use you to track your budget and ensure you stay on track. My favorite, however, is my Budget Life Planner. This handy tool keeps all the important info you need in one space!

What is the best way to save money for mental health?

Personal Care . Self-care is essential for your mental health, but you should still keep track of how much you spend in this category. Often, there are ways you can save money and still get the same benefits. For example, you can do workouts at home and save money on your gym membership.

Why should you create a separate category for utilities?

The reason you should create a separate category for utilities is that the amounts change from season to season. If it helps you can create sub-categories for every single bill. This will help you see where all of your money is going and be able to plan for every bill. 3.

INVESTING

Number one is some type of investing because if we don't include investing into our budget, it doesn't get done. I know that from own experience and from working with other people.

SOMETHING THAT MAKES YOU HAPPY

People say money doesn't buy happiness. I don’t agree. I have been a lot happier being on a budget and making more money. Build something into your budget that makes you happy. It can be something big or small.

DONATIONS

Donations are an investment in the world you want to see. Investing is not only strictly in the stock market.

INVEST IN YOUR REST

As women, we have a lot of work to do, and even more specifically as Black women. 80% of black women are the household breadwinners, so we don't have time to waste. We don't have time to sit down and really relax, and that is what's going to kill us. We have to make sure that we invest in some type of rest. Block out 30 minutes a day to take a nap.

About Mykail

Mykail James aka “The Boujie Budgeter” is the founder of BoujieBudgets.com, an online platform dedicated to teaching Gen Z professionals how to finance their best lives. Upon graduating with her MBA focused in accounting, Mykail became a Certified Financial Literacy instructor.

What are the essentials to include in a monthly budget?

When budgeting your monthly expenses, don’t forget to include monthly premiums for: 7. Essentials. Toothpaste, shampoo, dishwasher detergent, paper towel s. They’re not necessarily the most exciting monthly expenses to put in a budget, but essentials are a part of life.

How to find extra money in your budget?

It’s the number one category where people overspend (so easy to do, right?). Use coupons, eat what you have at home, go out to eat a few less times than normal —it all adds up in a month.

What to do when you have FOMO?

Bowling with friends. We need to do things in life we enjoy. But it’s still important to budget for them, or we’re likely to let our FOMO take over and say yes to all the things. Listen—your budget doesn’t have room for that. Plan how much you can spend each month on hobbies and entertainment. And then stick to it.

What are the four walls of a budget?

When budgeting for your monthly expenses, start with what we call the Four Walls—aka the basic necessities you need to survive: food, utilities, shelter and transportation. Food comes first—because, well, everybody’s got to eat.

How much money do you save when you get out of debt?

Once you’re out of debt, you’ll save up 3–6 months’ worth of expenses in case of a bigger emergency, like an unexpected sickness or job loss. After that, you’ll be ready to plan for your future by investing 15% of your income into retirement.

What does "every dollar that comes in gets a job" mean?

Nope. It simply means every dollar that comes in gets a job. You plan how you spend, save, give and invest all of your income, so at the end of the month, you don’t wonder where all your money went. When you budget, you are in control of where every single dollar goes.

Is it necessary to include rent and mortgage in your budget?

Just including your rent or mortgage payment isn’t enough when budgeting for your housing costs. Don’t forget insurance, property taxes and HOA fees. Whew, right? It adds up quick! To keep your housing costs from hogging most of your budget, keep these expenses to 25% or less of your take-home pay.

What is included in a home budget?

That includes your gas, electricity, water, and sewage bills. For most families, it will also include your cell phone, cable, and internet expenses. 5. Insurance (10-25 percent) This is one home budget category that depends very much on your own preferences.

What is a budget?

At its most basic, a budget is really just a plan for your money. A well-thought-out budget can help you take control of your finances and use your money with purpose, so you have enough to pay your bills, grow your savings, and still enjoy life today. The first step involves breaking down your regular expenses into budget categories ...

What is disposable income?

Your disposable income is what you have available to spend on your home budget categories: housing, transportation, food, utilities, insurance premiums, and other essential costs. 1. Housing (25-35 percent) Anything you pay toward keeping a roof over your head is considered a housing expense.

Why do we split budget categories?

The basic idea behind your budget categories is to split them up so you can see what you really need to spend separately from what you’re choosing to spend.

What should every family have?

At a bare minimum, every family should have an emergency fund earmarked for unexpected expenses as well as a retirement account such as a 401 (k) or IRA.

Why is it important to include health care in your budget?

Maintaining your health and well-being is essential, so it’s critical to include enough in your budget to cover these costs. If you plan for routine medical care, you’ll live a much healthier life over the long run.

Is saving money important for your home?

Although saving money doesn’t have much impact on your day-to-day life, it has everything to do with your financial health down the road.

What are the categories of budgets?

All the budget categories can be clustered into five essential things: income, fixed expenses, variable expenses, discretionary expenses, and personal financial goals. Fixed expenses are ones you cannot do without, like rent, food, and insurance. Variable expenses change from time to time, like home maintenance costs, clothing, and transport. Discretionary expenses are specific to your life scenario, and personal financial goals are savings and pension schemes. These five basic elements are the foundation of a simple budget and can help you to break down all the categories you want to have in yours.

Why is it important to make a budget?

Living with a budget will change your life, and it is important to make the right one. Do not be very harsh on yourself , as this will only push you to abandon it after a few months. This is why you need to do some due diligence and get a few things right before making a budget. These will go a long way to ensure that you make the right budget for your lifestyle.

What is a budget, and what does it do?

In simple terms, it is a plan outlining how you will spend your money. It gives you a clear picture of how money flows into your accounts, from work, side gigs, and profits, and illustrates how it flows out.

How to reduce recurring expenses?

Once your expenses are lower than your income, boost your savings as opposed to increasing your spending. Recurrent expenditure won’t go away in your budget, and try to reduce them as much as possible. If you have debt and clear it, redirect most of the money you used to pay the debt into savings, as this will help you achieve your goals much faster than anticipated.

Why do we need timelines in budgeting?

Timelines on budgeting goals help you understand how much you need to contribute monthly to achieve them. It helps break them down into the long, medium- and short-term goals before going into the specifics. Time limits also help change priorities as you can put more money in the short-term ones and less in the long-term ones. You will be required to make some trade-offs and sacrifices to achieve some of these goals, and timelines will help you put the right ones.

How to run a budget without cutting costs?

The more funds you can free, the shorter it will take to achieve the goals. The first place to start is by assessing your lifestyle and how your typical day looks like. Narrow down to all the instances you spend money, such as lunch, coffee, or fuel. These costs might seem small, but they add up to significant amounts in the long run if you do the math. Have the expenses you can forgo on standby, and the process will be easier.

What is the purpose of budgeting?

Budgets can do many things to you, but the main one is keeping your finances in control. It gives you a sense of direction and the foundation needed to have short, medium- and long-term financial plans. Think of it as the tactical measures you put in place to achieve a strategic goal. It zeroes down to every cent you spend and ensures you have some discipline on how you spend your money.