Budgeting can seem like such a large task, but don’t be overwhelmed. Here is where it all begins. I personally use 8 overarching categories for our budget and within each one house a few subcategories to keep me organized and motivated:
- Charity
This category comes first on our budget because my husband and I tithe to our church and give a portion of our money to other charities. We believe we are stewards of God’s resources and as stewards, we should do good with what has been entrusted to us! If you give to charities or sponsor a child through an organization like Compassion International, that money goes here.
- Saving
We have a few different saving goals that fall under this umbrella. FIrst, this houses our retirement savings, saving for our four kids’ college expenses, and our emergency savings accounts (to see more about how much you need in an emergency savings fund, click here). Secondly, this serves as a place for future savings goals (a roof, a home renovation, a new car, etc.).
- Housing
In this category, we include our mortgage, home insurance and taxes (often called escrow), a sinking fund for home repairs, HOA dues, plus all utilities. Even though our phone bill has nothing to do with housing, it makes sense to us to include all utilities under housing since the majority of them are house related utilities. You may handle this however you want.
- Food
One of the staples of our budget is food. Our only subcategories in this are groceries and eating out. We rarely eat out, but every now and then for an anniversary dinner or a special occasion, we budget a little extra in this category. Groceries for us include everything we buy as far as household products, cleaning supplies, food, office supplies, etc. Basically anything we buy at Kroger or Walmart falls into this category.
- Transportation
Getting from A to B is pretty simple. We only include gas, a car repair fund, and things like registrations and taxes in this category. If you want, you could include a car payment under this umbrella, but I would prefer that go in the debt category – let’s call it what it is!
- Insurance
Depending on how much of your different insurances come out of your paycheck, this category may be slim. It could include things like medical insurance and doctors bills, auto insurance, life insurance, dental and vision insurance, and even more specific insurances like cancer insurance if you have it. Some of these may come out of your paycheck if your employer offers them, so they will not be a part of your after tax budget, but it is still good to be aware of your costs in these areas even if you don’t pay them yourself.
- Debt
This category is only necessary if you are currently paying off debt. If not, welcome to the 7 categories of budgeting! If you have debts like a credit card payment, personal loan, car loan, or anything besides a mortgage, that will go here!
- Personal/Miscellaneous
In our budget, we allot a specific amount each month as “personal money” for both my husband and me. I tend to use mine for coffee treats, a new outfit, or getting a pedicure every now and then. My husband is more of a tech gadget guy. Having personal money allows us each discretion over a small portion of money so every splurge isn’t scrutinized by the budget. We have permission to spend our personal money as we see fit. This feels less restrictive to me than having every single thing come from our budget.
This also includes categories like clothing, haircuts, entertainment, pet expenses, vacations, and gifts. Clothing in our budget is mostly for our kids. If my husband and I NEED something it comes out of this line item too. If it’s a want, it comes out of our personal money instead.
As you can see, this is fluid. Feel free to adjust categories/subcategories to your actual expenses and needs. To get a downloadable budget that you can customize and begin to use, click here.
Let’s do this together!
Cortney
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