A Detailed List of Budget Categories For An Effective Spending Plan

List of budget categories with pen

How this list of budget categories can help you

Creating a budget is a personal process, and categorizing all of your expenses can feel complicated. Every dollar should be tracked and accounted for if you want to maximize your income.

If your personal finances are in a state of disarray and creating stress for you, then you might be avoiding the whole issue altogether because it’s overwhelming.

So, let’s just start with step 1: setting up your personal budget categories.

Having a list of budget categories will give you an overall view of where your money is going and is the beginning of taking control of your finances. It’s how you get your expenses organized so you can manage your money more effectively.

The good news is, you can make your budget categories list as simple or detailed as you like. As long as all of your expenses are accounted for and it makes sense to you, then your budget categories list should suffice.

In this post, I will give you a detailed list of budget categories you can use for your finances, along with various methods to choose from. Compare this list with your current household expenses to determine which categories would naturally apply to your own budget.

I’ll also answer a few of the most common questions about budgeting, budget categories, and budget methods, as well as give you some alternatives to track your spending.

Let’s get started.

Creating a detailed list of budget categories

The more expenses you can lump together in one category, the less complicated your budget will be.  But, if you want to know exactly how much you spend on coffee shops, haircuts, and shoes, then you might want to go with a more detailed budget category list.

Just take your main categories and break them down into smaller ones.  There is no right or wrong way to do this.  You could have 10 subcategories under one main group, or (for example) categorize all of your food expenses in one category but have one subcategory for coffee shops.  It all depends on the budgeting goals you’ve set for yourself.

To give you some ideas, here is a comprehensive list of categories that are broken down into more specific expenses:

Income budgeting categories

  • Salary & wages
  • Alimony
  • Child support
  • Tips
  • Investment income
  • Monetary gifts
  • Work bonus
  • Side hustle income
  • Refunds/reimbursements

Savings budgeting categories

Debt payment budgeting categories

  • Credit cards
  • Medical Bills
  • Auto loans
  • Student loans
  • Personal loans
  • Payday loans

Insurance budgeting categories

  • Health insurance
  • Dental insurance
  • Vision insurance
  • Auto insurance
  • Homeowner’s insurance
  • Life insurance
  • Disability insurance

Housing budgeting categories

  • Mortgage or rent
  • Property taxes
  • Homeowner’s insurance
  • HOA fees
  • Home improvement & repairs

Utilities budgeting categories

  • Electricity
  • Natural Gas
  • Water
  • Garbage pickup & recycling
  • Sewer
  • Internet & cable
  • Landline & cell phone
  • Alarm

Transportation budgeting categories

  • Gas
  • Parking fees & tolls
  • DMV & Registration fees
  • Public transportation
  • Auto warranty
  • Tires & oil changes
  • Repairs

Food budgeting categories

  • Groceries
  • Restaurants
  • Coffee shops
  • Fast food
  • Alcoholic beverages

Household budgeting categories

  • Kitchen supplies
  • Bathroom items
  • Garage items
  • Laundry products
  • Lawn & garden

Pet budgeting categories

  • Pet food
  • Pet supplies & grooming
  • Veterinary care
  • Pet insurance

Work budgeting categories

  • Lunches
  • Dry cleaning
  • Certification & licensing fees
  • Classes & training

Personal expenses budgeting categories

  • Clothing
  • Shoes & Accessories
  • Jewelry
  • Lingerie
  • Perfume/cologne
  • Cosmetics

Kids budgeting categories

  • Private tuition
  • School supplies
  • Private lessons
  • Athletic fees
  • School lunches
  • Babysitters
  • Camps & activities

Personal Care budgeting categories

  • Skincare & hair products
  • Barber & salon services
  • Toiletries
  • Massages

Medical and health care budgeting categories

  • Medications & prescriptions
  • Doctor co-pays
  • Eye care, glasses & contacts
  • Dental care & Orthodontics
  • Therapist fees
  • Physical therapy
  • Medical devices & supplies

Entertainment, Travel & Recreation budgeting categories

  • Books, music, streaming services
  • Movie theaters
  • Subscription services
  • Sporting events & concerts
  • Clubs & hobbies
  • Special outings
  • Travel costs

Gifts and Giving budgeting categories

  • Birthday gifts
  • Anniversary gifts
  • Christmas gifts
  • Other holiday gifts
  • Baby shower gifts
  • Graduation gifts
  • Wedding gifts
  • Tithes & offerings
  • Charitable donations

Miscellaneous expenses budget categories

  • Bank fees
  • Taxes
  • Anything that doesn’t fit in another budget category
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Methods for creating a simple budget categories list

If breaking down your expenses into a dozen different categories doesn’t appeal to you, there are a few simpler ways to create budget categories:

3 types of expenses

This strategy is very simple and can be applied to anybody’s budget. 

The three expenses that the majority of people must account for are fixed, variable, and periodic. You can fit each of your expenses into one of these three categories.

Pay yourself first

This budgeting strategy places the highest importance on savings and debt payoff. Essentially, you use a certain percentage of your income to build savings and/or pay off your debt before you pay any other expenses. Then, you use the remainder of your income as you see fit.

This method ensures that your most important financial goals are being addressed first so you don’t have to track your discretionary expenses.

Money buckets

Another strategy is to separate your spending into different “money buckets”. Determine how much money you want to allocate for each bucket and then set up different checking accounts for each.

For example, say you give yourself a budget of $200 to eat out each month. You can open up a new account (or simply take out $200 cash) and fund it. Now, whenever you want to eat out you have to use this account and when it runs out of money then you’re done eating out for the month.

50/30/20 Budget

This budgeting method only has 3 categories so it keeps things simple.  Each number is a percentage of your income, where 50% is for necessary expenses, 30% goes toward discretionary spending, and 20% is allocated to savings and debt payments. 

If these percentages are unrealistic for your circumstances, customize it for your own needs.

Conscious spending

This idea was popularized by Ramit Sethi. Ramit suggests that you should split your income into four categories:

  1. Fixed costs
  2. Investments
  3. Savings goals
  4. Guilt-free spending

By prioritizing your category spending in this order, you’ll be sure that your most pressing obligations are paid first. Once you’ve paid bills, invested, and saved, then you can spend the rest of your money guilt-free.

The “No” strategy

This simple spending approach gets its name from the discipline of saying “no” to overspending. It relies heavily on having a heightened awareness of your bank account’s activity.  The basic premise is knowing what funds are available in your account for discretionary expenses, and not spending any more than that.

This works best if all of your bills are paid at the beginning of your budget period, and you’re disciplined with setting some aside for savings.

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How do I choose my budget categories?

The best way to determine your budget categories is to consider what you spend your disposable income on. Of course, there are those typical categories that are common areas of spending for most people.

However, personal finances are personal, so the categories you choose will depend on your own unique circumstances, personality, and preferences.

Some categories will include your essential living expenses, while others will track your nonessential spending. The important thing is to have a category for every expense you make, so all of your income is being accounted for.

Here is an example of breaking down essential and nonessential expenses:



Mortgage payment or Rent


Insurance premiums
Debt payments
Home repair


Coffee shops
Salon services


Accessories & jewelry


Private lessons

Home improvements

As you spend, just add each expense to its appropriate category. At the end of the budgeting period (typically a month), you’ll be able to see a clear breakdown of your spending.

Once you know what your average spending looks like then it’s just a matter of adjusting your budget categories so your spending is aligned with your goals.

By reducing some allowances and then reallocating that money to a different category, your spending plan can better reflect your financial priorities. For example, if you want to increase your savings and debt payoff categories, you can reduce your budget for less important expenses such as dining out or clothing.

How many budget categories do I need?

There is no set amount of budget categories that you need, and the right amount for you will depend on your financial goals. Your answer also depends a lot on your personality type.

However, as a general rule of thumb, there are a few main expenses that almost everyone will have to pay.

These are:

  1. Housing
  2. Food
  3. Utilities
  4. Insurance
  5. Transportation
  6. Nonessentials

Although you don’t have to include these items in your budget category list (as explained previously), these 6 areas will cover the majority of your expenses. If you want to get a good handle on where your money is going, I would recommend tracking these expenses regardless of the budget that you make.

Keep in mind that the more categories you have means the more complicated your budget becomes. Don’t set yourself up for quitting by making your budget more elaborate than it needs to be. Keep it as simple and straightforward as you can, so you’ll stick with it.

What percentages should I give to my budgeting categories?

Again, how much you spend on each category will come down to your own financial goals and preferences. It’s also important to remember that your financial priorities will be different than someone else’s.

For example, some people might frown upon the thought of spending money at a restaurant while you have no problem dropping $50 for a nice dinner. However, the same people who balk at a $50 dinner might love to travel and spend $500 each month on a trip.

We each have different categories that we think are worth the extra spending, so be sure to focus on what’s important to you.

With that said, a good general rule of thumb is to limit your mortgage or rent to 25% of your net income and keep all other categories between 5-15%.

Here is one example of budget percentages:

  • Housing: 25%
  • Insurance (including health, medical, auto, and life): 10%
  • Food: 10%
  • Transportation: 10%
  • Utilities: 10%
  • Savings: 10%
  • Entertainment (anything fun): 10%
  • Clothing: 5%
  • Miscellaneous: 10%

Remember that this is just a guideline and there is no right or wrong way to spend your money. Your values and your goals should guide these decisions for you.

How do I track my budget categories list?

The easiest way to track your budget from month to month is to use an app or software that will track your spending automatically. Luckily, there is no shortage of options when it comes to finding good budgeting software. The more important thing is to find the method that works the best for you.

Here are a few of the best options:

  1. Your banking app – Almost all banking apps include this functionality. Since they already know how much you’re spending then this is the easiest option since you can keep it all within the same app.
  2. Pocketguard – Categorizes and organizes your expenses, monthly bills, and subscriptions into easy-to-follow tabs and even recommends which expenses you could cut.
  3. Mint – Mint will automatically suggest budget goals to you based on your spending.
  4. You Need A Budget – This software uses four simple rules to help you quickly gain control of your money, get out of debt, and save more money faster. On average, their users save an extra $6,000 per year.
  5. Personal Capital – Personal Capital offers tons of free online financial management tools that are incredibly valuable.
  6. ClearCheckbook – This one is less well-known, but the one that I personally use.  It’s like an online checkbook register, except you can also set up a budget and track your spending by categories.  I use it because I like the hands-on aspect, which keeps me in tune with my money. There is a free and a paid version.

If you don’t want to download another app, then you can track your expenses manually using an Excel spreadsheet, the notes app in your phone, or even just a notebook!

The process of manually recording every purchase can make you more aware of how much you’re spending.

Why is budgeting important?

The main goal of budgeting is to be intentional about spending less than you earn. A budget is one of the most effective tools to give you control over your personal finances and the ability to achieve your goals.

Spending less than you earn allows you to set a portion of your income aside for saving and investing, but it does have its challenges. That’s why it’s important to break up your expenses into separate categories to make your budget easier to follow.

If you can minimize the barriers to track your spending, you’re more likely to stick to your spending plan.

What’s the goal of my budget?

As you consider the budget categories list you want to use, you should spend a moment or two thinking about what you’re trying to achieve. 

Additionally, having a specific goal will also motivate you to stick with the budget that you set and make it more attainable.

Your goal doesn’t need to be a financial number. It can be as simple as “worry less about money” or “avoid impulse spending”.

Your budget list should include those categories that support the goals you want to achieve.

Here are a few examples of some of the most common goals of budgeting:

  • To save money for a short-term goal (a new car, phone, etc.) – For this goal, having a specific dollar amount that you need to reach will help you know how much you need to save each week or month.
  • To save money for a long-term goal (down payment on a house, college tuition, retirement) – Similar to short-term goals, you should budget a certain amount toward your long-term objectives. When you break down big goals into smaller steps, it’s much easier to achieve.
  • To get out of debt – If you’re behind the eight ball financially, then setting a budget is the best way to build good financial habits.  You can use your budget to maximize your debt payments so you can get out of debt as quickly as possible.
  • To improve your overall health/wellness – Money (or a lack of it) is one of the leading causes of stress. You may not realize it but getting a good handle on your budget can do wonders for improving your mental and emotional health.

Regardless of what your goal is, setting and following a budget is a surefire way to make sure that you reach it.

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In conclusion

Assigning different categories to your budget will help you track your money more efficiently and keep your finances organized.  Your budget categories will be unique to your personal finances and should reflect your money goals.

Whether you have 3 budget categories or 33, it’s important to keep a budget.  Creating a spending plan for your money allows you to be intentional with your finances and helps you be in control of how your money is working for you.

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A Detailed List of Budget Categories For An Effective Spending Plan

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