Defining your expenses will give you insight into what you spend your money on. The best way to do this is to make a record your expenses and organize them into budget categories. This will form the basis of your personal budget. You can use the spreadsheet on the Budget Tools page to record your expenses. You can find a list of common personal budget categories in the spreadsheet and at the bottom of this page.
You can also use the Budget Allocation Tool to get an idea of how much money you should be putting towards each of your main budget categories.
When you have an understanding of what you spend your money on, you will be able to prioritize your expenses. This will help you identify how much of your income is needed to cover necessities, and how much money you can spend or save how you want.
Tracking your Spending
The easiest way to define your expenses is to keep track of what you spend your money on by keeping all your receipts. See the page on Tracking Spending for some techniques on how to do this.
You can get a rough idea of your expenses by looking over you bills and receipts for last budget period. This information will be refined as you continue to track your expenses and use your budget.
When calculating your expenses, you should account for at most 90% of your income. You can use the extra 10% of your income for unexpected costs or opportunities.
Here are some ideas for personal budget categories. The most common budget categories are listed here. If you can’t find what you need on this list, you can always use your own.
Snacks, coffee breaks
Home food production
Dishes and cutlery
Soap and shampoo
|Household Operation||Home Office|
Safety deposit box rental
Yard improvement and supplies
|Car and Transportation||Personal|
Medical and hospital costs
First aid supplies
Treatment and therapy
Clothing for self
Clothing for children
Clothing for spouse
|Education||Recreation and Fitness|
|Pets||Gifts and Contributions|
Cards and wrapping paper
Home electronics (TV, computer, etc.)
Related PagesWhy Budget
What Is Needed To Make A Budget
How To Budget
Personal Budget Example
Personal Budget Tools
Budget Allocation Tool