14 Personal Budget Categories You Should Include In Your Budget

personal budget categories

Budgeting is a critical component of financial success. A budget allows you to track your income and expenses so that you can make informed decisions about how to best use your money.

There are a number of different personal budget categories that you should include in your budget. These involve the essentials, such as housing, food, utilities, transportation, savings, and insurance.

Once you’ve covered the basics, you can add in other categories, such as debt repayment, entertainment, and personal care. The key is to be mindful of your spending and make sure your budget accurately reflects your priorities.

Here is a closer look at 14 of the key personal budget categories you should include in your budget:

1. Housing

Your housing costs will likely be your largest expense each month. Make sure to include your mortgage or rent, property taxes, and any repairs or maintenance in your household budget.

You might want to allocate about 25 to 30% of your monthly income toward your housing costs.

This way, you can be sure you’re staying within your means and not risking getting behind on your payments since it could compound quickly and become difficult to catch up.


2. Utilities

Utilities are another considerable cost for most households and will vary depending on the services you use. The three main types of utilities are:

  • Electricity
  • Gas
  • Water

You may also have a trash service, sewage, or recycling fee.

In some areas, these are all rolled into one bill called a bundle rate. The important thing is to make sure these items are included in your budget so that you can avoid any nasty surprises come billing time.

Save on utility costs by making small changes in your lifestyle and home. Check for air leaks around doors and windows, and water leaks, and invest in energy-efficient appliances.


3. Transportation

Most people need to use some form of transportation every day in order to get to work, go to the store, or take their kids to school. Therefore, your transportation costs should also be a priority when you are creating your budget.

Public transportation, such as buses or trains, can be a great option if it is available in your city. Not only is it usually cheaper than owning and maintaining a car, but it can also be more convenient since you don’t have to worry about finding parking or dealing with traffic.

If you do need to use a car, try to carpool when possible or look into alternatives to traditional gasoline, such as electric cars or hybrids. You may also want to consider getting a less expensive car if your current one is costing you too much money.


4. Food

Food is one of those personal budget categories that can quickly get out of hand if you’re not careful.

It’s easy to let your grocery bill creep up a few dollars here and there, but before you know it, you’re spending hundreds of dollars more than you should on groceries every month.

To keep your food budget in check, start by making a list of the essentials that you need to buy every month. This might include items like:

  • Bread
  • Milk
  • Eggs
  • Cheese

Then, make a list of non-essentials that you would like to buy, but that you can live without if necessary. These might include items like:

  • Snacks
  • Candy
  • Dessert

Once you have your lists made, start looking for ways to save on groceries.

One way to do this is by using coupons. You can also look for sales and clearance items at your local grocery store.

Another way to save on groceries is by meal planning. This means you’ll make a plan for what you’re going to eat for the week and then only buy the ingredients you need for those meals.


5. Household Supplies

From groceries to cleaning supplies, you need to make sure you have enough money set aside each month to keep your home stocked and running smoothly.

Some essential household items you may need to budget for include:

  • Cleaning supplies
  • Toiletries
  • Personal hygiene products
  • Laundry supplies
  • Paper towels and tissues
  • Trash bags
  • Light bulbs


Aside from financial benefits, having a realistic monthly budget for household supplies will help ensure your home is always well-stocked.

As such, you’ll never have to make a last-minute run to the store for shampoo or laundry detergent, and you’ll always have light bulbs on hand when one burns out.


6. Insurance

Insurance is one of the most important budget categories to include in your budget. This includes health insurance, car insurance, homeowners or renters insurance, and life insurance. Insurance protects you and your family from financial ruin in the event of an accident or illness.

The cost of insurance would depend largely on your household’s needs. For example, if you have young children, you’ll want to make sure you have good health insurance coverage.

If you own a home, your mortgage lender will require you to have homeowners insurance.

If you don’t have insurance yet, the best way to determine how much you should budget for it is to speak with an insurance agent. They can help you assess your needs and find the best coverage for your budget.


7. Medical and Healthcare

Aside from insurance, there are other medical and healthcare costs you need to account for in your budget. This can include:

  • Prescriptions
  • Co-pays
  • Dental work
  • Vision care
  • And more

It’s best to have a savings account for medical expenses so you’re prepared for anything that comes up. Try to contribute to this account monthly so you have a cushion when unexpected costs come up.

This way, you won’t have to put off necessary medical care or treatment because you can’t afford it. Additionally, you won’t have to borrow money from lenders with high-interest rates to cover these costs.


8. Debt Payments

If you have any debt, whether it be from student loans, credit cards, or a car loan, you should include these payments in your budget.

By including these payments in your budget and knowing how much you need to pay each month, you can start working on a plan to pay off your debt as quickly as possible.

There are various ways to budget for debt payments. The most common method is the snowball method, where you focus on paying off your smallest debt first and then move on to larger debts.

Another option is the avalanche method, which focuses on the debt with the highest interest rate first.

All in all, it depends on your situation as to which debt payment method you choose. However, what’s important is that you include your debt payments in your budget so that you can start working toward becoming debt-free.


9. Savings and Investments

Another category in your personal budget should be savings and investments. This category is important because it allows you to set money aside for future financial goals, such as retirement or a rainy day fund.


Ideally, you should save 10% to 15% of your income each month. If this seems like a lot, start with 5% and increase the amount as you get used to living on a budget.


There are many different ways to save and invest your money. Some people prefer to use a savings account, while others invest in stocks, mutual funds, or other investment vehicles.

Whatever method you choose, make sure you are comfortable with the risks involved. Remember that investments can lose money as well as make money, so don’t invest more than you can afford to lose.


10. Education

If you have children, it’s best to save for their future education early on. Even if you don’t have children, it’s still a good idea to set aside money for your own future education or re-training.

By doing this, you’ll be less likely to have to rely on loans or other forms of debt in the future.


11. Gifts and Donations

It’s also good to have a budget for gifts and donations. This way, you can be more mindful of how much you’re spending on other people and give to causes that are important to you.

Birthdays of your loved ones, anniversaries, weddings, Christmas, and other holidays are always around the corner. You don’t want to be caught empty-handed (or worse, in debt) when these occasions arise.


12. Personal Spending

Of course, don’t forget to set a budget for your wants as well. If you’re someone who enjoys indulging in activities or buying things for yourself, make sure you account for that in your budget.

You don’t want to be depriving yourself of the things you enjoy just to save money — that’s not sustainable in the long run. Find a happy medium by allocating a reasonable amount of your income toward personal spending.

You can also include personal necessities, like gym memberships, salon services, and cosmetics in this category. These expenses are often called discretionary spending, which means you can choose how much to spend on them.

As such, it’s important to be mindful of how much you’re spending on these items each month. When creating your budget, make sure to give yourself a realistic allowance for personal spending.


13. Entertainment

One of the most important categories in your personal budget is entertainment. This is because it can include both discretionary and non-discretionary spending.

  • Discretionary spending on entertainment might include:
  • Going out to eat
  • Purchasing tickets to movies or concerts
  • Taking vacations

Non-discretionary spending might include your monthly Netflix subscription or your cable bill.

The key to keeping your entertainment spending in check is to be mindful of how much you are spending and to make sure that you are getting value for your money.

For example, if you are going out to eat, try to find restaurants that offer discounts or coupons.

And if you are purchasing tickets for an event, make sure to compare prices before making a purchase. By doing so, you can ensure that you are getting the best deal possible.


14. Miscellaneous

The miscellaneous budget serves as an overflow category. This means that if there are any expenses that don’t fit into any other category, they go here.

It can also be a buffer for times when other categories are overspent.

For example, if you know you’ll be spending more on gas this month because of a road trip, you can account for that by transferring money from your miscellaneous budget into your transportation budget.

The best thing about including this category in your budget is that it gives you flexibility. You can use it to cover one-time expenses or as a catch-all for anything that doesn’t fit neatly into another category.



Creating a budget may seem like a daunting task, but it’s actually not that difficult. Once you have a budget in place, it will be much easier for you to save money.

Knowing these personal budget categories will help you keep track of your finances more efficiently and sustainably.

If you’re looking to save money, 121 Financial Credit Union is a credit union that offers innovative solutions and services to help you get your finances in order. Contact us today for more information!

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