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Personal Budgets: How to categorize your expenses to make Budgeting and tracking of your expenses easy

The importance of a personal budget in pursuit of your financial freedom goals cannot be over emphasized. A budget gives you an opportunity to set your spending priorities right through the development of a concrete spending plan. Whereas most people have made peace with what they earn and are content with it, a majority have trouble in checking their expenses. For ease of planning and management, expenses ought to be categorized and clustered together. The following 15 categories of expenses will make your budgeting experience a pleasant one.

1. Food

Food is a basic need and every family needs it to survive. Food related expenses, therefore, need to be a top priority while making a personal budget. The expenses under this category may include:

  • Groceries
  • Dining out
  • Kid’s lunch money
  • Adult’s lunch allowance
  • Pet food

2. Housing

Every person and family need a roof over their head to function normally. Housing is not just limited to a mortgage payment or rent but also includes other expenses that improve the appeal and condition of your home. The main housing expenses are:

  • Mortgage payment
  • Rent
  • Property taxes
  • Repairs and maintenance
  • Home improvement
  • Landscaping and yard work

 3. Utilities

Payment of utility bills ought to be a top priority in each family. Utilities help us turn our houses into homes by making life more manageable, pleasant and easier. The main utility bills are:

  • Water and sewerage
  • Electricity and heating
  • Internet
  • Phone
  • Cable
  • Garbage and fumigation
  • Security

 4. Childcare

Proper childcare is an essential element of a functional home. It gives the parents peace of mind and helps them concentrate on other issues that require their attention. Childcare expenses include but are not limited to:

  • Babysitting
  • Daycare
  • Child support
  • Diapers and other infant/toddler supplies
  • Clothing
  • Toys

  5. Education

Investing in education for both your children and yourself is a worthwhile and valuable venture. The main education expenses are:

  • School fees
  • School supplies and books
  • Kids’ college fees
  • Your college fees

 6. Giving

Giving should be a top priority in our personal budget irrespective of how much we have. As Jack London says, “A bone to the dog is not charity. Charity is bone shared with the dog, when you are just as hungry as the dog.” Giving can be in form of:

  • Tithes
  • Offering
  • Donations to specific people or causes
  • Charities
  • Gifts for special occasions to family and friends

7. Household Supplies

The most commonly used supplies in our homes include:

  • Toiletries
  • Tools
  • Detergents
  • Utensils
  • Grooming Supplies

 8. Personal

The category deals with expenses that are related to personal care, grooming, health and legal obligations. However irregular some of the personal expenses are, they need to be budgeted for because, at one point or the other, they will be incurred. The main personal expenses are:

  • Gym membership
  • Haircut
  • Salon services
  • Alimony
  • Clothing
  • Allowance

 9. Savings

One of the most important habits that you need to develop in pursuit of financial independence, is the habit of saving regularly.  The earlier you start saving the better. Savings are mainly meant for:

  • Emergency Fund
  • Retirement Fund
  • Special Projects
  • Replacement of expensive household items

 10. Entertainment 

This is generally referred to as fun money. After all, all work and no play make Jack a dull boy. However, you only have fun after you have met all your obligations. Some of the entertainment expenses are:

  • Vacation
  • Hobbies
  • Night outs

 11. Insurance

Insurance is a significant element and an integral part of any concrete financial plan. Insurance policies are key in protecting you and your family against life eventualities such as accidents, death, theft and sicknesses. Most people and families require:

  • Health insurance
  • Auto insurance
  • Life insurance
  • Education and endowment policies

  12. Medical

Irrespective of your age or health status, planning for medical expenses is a necessity for every person. Even when you have health insurance, it’s important to set some money aside to cater for insurance exclusions and unfavorable policy changes. The main medical expenses are:

  • Dental care
  • Optical
  • Consultation
  • Prescription Drugs
  • Over the counter medication
  • supplements

 13. Transport

Whether you work from home or away from home, transport expenses are a major expense that needs to be planned for every month. The expenses include but are not limited to:

  • Fuel
  • Parking fees
  • Bus/train fare
  • Auto repair and service
  • Auto loan prepayment

 14. Debt reduction

Debts in general and consumer debts, in particular, can easily turn you into a slave. As a prudent manager of your money, it is important for you to set aside a portion of your income every month to either reduce your consumer debt or fast track your mortgage payments. The debt reduction allocation can be used for:

  • Mortgage prepayments
  • Student loans
  • Credit card payments
  • Auto loan prepayments

 15. Investment

Unless you intend to work your whole life, you’ve got no choice than to invest. By investing wisely you will be ensuring that your hard earned cash is working for you. No matter how small your income is, set aside some money every month and invest in:

  • Property for capital gains and rent
  • Shares
  • Bonds
  • Investment Groups
  • Investment Funds

Your financial status is not defined by what you earn but how you spend it. A budget may tell you what you can’t afford but only self-discipline will keep you from buying it. Strive to live within your means now and you will be grateful for it later.

Below is a PDF budgeting template that has all expenses categorized. It’s my gift to you. Kindly download and feel free to personalize it to meet your budgeting needs.

Budgeting Template 1


About Jenny

I am a daughter, a sister, a wife and a mother who believes in discovering the wonder and the marvel of an ordinary life by allowing it to inspire me and holding onto the belief that God uses the ordinary to do extra ordinary things in the lives of others. I believe that i do not have to be in possession of a great talent for my life to be magical. I can move mountains and change the world I live in by embracing whatever I have with a grateful attitude and nurturing my mustard seed to an amazing tree of greatness. I believe that I can begin and nurture great relationships, I can do an incredible job in my workplace irrespective of my title, I can be a great homemaker and can manage the resources that God has given me as a great steward. I am a firm believer of the Proverbs 31 not as a God’s judgment yardstick but as a sign of God’s confidence in the feminine clan and his perception of the incredible power he has given women. Yes I believe that ‘feminity’ is fascinating and God’s best gift to women.

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