Your guide to the must-have categories every budget should include

If your salary disappears at the speed you reach, the budget may help.

You can think about a budget as a plan for your money: it tells you about the place to put every dollar that has been obtained with difficulty when it comes to your bills, savings and estimated spending goals.

To create a budget that suits you, think about your habits in spending, savings goals, and financial obligations. Budgets are not suitable for everyone, and the line elements that include them depends greatly on these factors. But you do not need to start from the zero point as well – Consulting the list of common budget categories can provide a useful starting point.

Read on to know the categories that your budget must include, as well as the common sub -categories and line elements that you may want to add.

In order for your budget to work, you need to make sure that the three main types of expenses include: needs, desires and savings. The percentage of your budget allocated to each of these three areas can vary based on your position, but the base of 50/30/20 is a good place to start. This rule states that 50 % of your income is heading towards needs, 30 % go towards needs, and 20 % go towards savings, investments and additional debt rewards.

• Needs: This includes both fixed and variable expenses necessary for daily life, such as housing, transportation, groceries, clothes, medicines, and minimal debt payments.

• He wants: These are estimated purchases – things you enjoy but will not necessarily pay in exchange for a financial emergency. These can include a gym membership, concert tickets, dining outside, and subscriptions.

• Smarts: The savings include short and long -term savings goals, investments, and debt payments exceed the minimum for your monthly payment.

Although these three categories and base 50/30/20 provides a framework for regulating your budget, you likely want to get more granules with sub -categories and specific expenses.

Below is a list of common budget categories, sub -categories and elements expenses. Although these elements may apply to most people, they will not apply to everyone. Do not hesitate to ignore these linear elements or non -relevant sub -groups. For example, if you do not have children, you will not need to include the costs of caring for children in your budget.

On the other hand, this list may not include everything you spend. When creating your budget, see your banking data and credit card to capture any expenses that do not include this list.

Needs should take approximately 50 % of your total budget, although this can vary depending on your situation. For example, if you have young children in the field of day care, you may temporarily have to spend more than 50 % of your income on the needs of these high costs.

Include the following sub -categories and font elements (those that apply to you) when creating a portion of your budget needs:

• Internet

• phone

• electricity

• mystification

• water

• Sewers

• waste

• Grocery stores

• Meal delivery services

• Day care, children’s cliff, nanny, etc.

• Cleaning supplies

• Washing supplies

• Outdoor gardening/gardening supplies/gardening

• Pet food and supplies

• Veterinarian bills

• Haircut

• Hygiene

• diverse

• Credit cards

• Personal loan

• Car loan

• Other loans

With the base of 50/30/20, about a third of your budget goes towards needs, or estimated spending. For some, this category may seem trivial, but the integrated “fun” spending helps you to stick to your long -term budget.

Keep in mind that if your basic expenses are temporarily high or are strongly provided to achieve a big goal, you may need to reduce a little from appreciation spending.

The Wants category has a greater space for flexibility. Start with the following sub -categories and lines elements, but add any expenses you enjoy spending money on them.

• Eating

• Performances and concerts

• Sporting events

• Subscriptions

• Hobby requirements

Finally, savings make up the last 20 % of your budget. This category includes providing major purchases, short -term savings, long -term goals, such as retirement. It also includes any investments, such as contributions to 401 (K) or the Irish Republican Army, and any additional money you want to throw towards your debts (beyond the minimum payments).

You can add some of the following expenses to your savings category:

• Student loans

• Personal loans

• Credit card debts

• furniture

• Electronics

• Holidays

Although this list gives you an idea of ​​how to arrange your budget, you can organize it in a more logical way for you. For example, if you eat it regularly and consider it a necessary comfort, you can convert this element from the WANS (entertainment) into needs (food).

Now that you have an idea of ​​the categories of expenses that the budget should include, you can start building your own. While there are countless ways to prepare your individual budget, the following steps determine the general process:

1. Follow your spending. As mentioned above, you need to know where your money goes every month before you can prepare your budget. You are bound by your monthly spending and do not ignore cross expenditures – such as insurance premiums and car repairs – which are not part of spending every month.

2. Classification of your purchases using the 50/30/20 base. Once you get a comprehensive list of purchases, you can classify them by needs, desires and savings. This framework will help you ensure that the excessive spending is not expended while moving on long -term goals.

3. Estimating the monthly costs of each category, sub -category, and item. Discover the amount you spend, on average, for each element. If you have to guess, the high goal – it is better to exaggerate your spending instead of reducing it.

4. Allocate all post -tax income across groups, sub -categories and line elements. For example, if you get $ 5,000 after taxes, you have about $ 2,500 to publish it across your needs.

5. Make adjustments as necessary. If your expenses are higher than your income, you will need to make some adjustments. You can get rid of the groups you do not need or want, or cut off your spending wherever possible. Remember that you can always adjust the 50/30/20 base to best suit your needs. For example, if your housing costs are especially high, you can use a model 60/20/20 or 60/30/10 instead.

6. Follow your spending. The budget is useful only if you use it. This means tracking spending and reconciling your budget. This allows you to keep the tabs on your spending and savings targets and make adjustments when needed. You can do this by hand or using the budget application.

If your initial budget does not succeed, do not be afraid to change things. Some people flourish with detailed budgets with special categories and lines elements, while others prefer more flexibility. There is no correct or wrong way for the budget, so choose the method – and the categories – that work for you.