Budgeting doesn’t have to be boring; in fact, part of the fun part of budgeting is making categories as they relate to your life and your interests. Of course, there are the conventional categories like a rent or mortgage, food expenses, utilities, insurance, transportation, and others. Your budget can be completely tailored to your long term financial goals and to play to your strengths.
Your budget can also be a way to understand your weaknesses. For example, you might buy coffee every day without a clear budgetary amount allocated to coffee purchases. If you make a coffee category and designate exactly how much you want to spend each month on coffee, you’ll be able to quickly see if you’re spending too much, and if you have extra left over, you can put that surplus toward another category or treat yourself. Ultimately, a budget category like this will help keep you accountable.
Other categories you can include in your budget depend on your goals. You could have a category for car repairs, or a travel category. You could include categories for gifts or contributions to a charity of your choice.
Don’t forget that a budget is a living, breathing document, and categories each month can change depending on your needs. You should definitely have a debt category to keep track of how much you have to pay toward your debts each month, and a category for savings — ideally automated to place money from your checking account into your savings.
Categories like “personal care,” “health,” and “hygiene” can vary from person to person. Some bundle these into one category like “miscellaneous expenses,” and others find it more helpful to know exactly how much they spent on doctor’s copays and shampoo that month. It really depends on your style of budgeting and how strict you need to be with your budget.