How To Properly Categorize Your Expenses When You Budget

How To Properly Categorize Your Expenses When You Budget


Here’s a quick tip when creating a budget or as I like to call it a financial forecast.  The first step to creating a budget is to bring all your expenses together and categorize them.  One of the easiest and most intuitive ways to categorize for your budget is by organizing your expenses by time frames.  When it comes to money we tend to naturally organize things by time for example we look at our annual salaries, monthly bills, bi-weekly paycheck and weekly grocery and errand runs.  I created this chart to help you organize and prioritize your expenses.

The Unexpected

These would be the expenses that you can’t know when or if they will happen because they happen quickly and without warning

  • Vehicle repair and maintenance
  • Home repair and maintenance
  • Medical Bills
  • Veterinary Bills

These are the expenses that come around every once in a while but are on a set pattern.  They would be bills that come around annually, semi-annually or quarterly.

  • Utilities (for me my trash bill is quarterly)
  • License renewals
  • Tax preparation
  • Property Taxes
  • Some Insurances
  • Subscription Services
  • HOA fees

This is probably the most common type of expenses that people think about. They come every month.

  • Credit card payments
  • Rent or mortgage payment
  • Savings ← I know it’s hard but you really should be doing this one if you can.
  • Car payments
  • Child support payments
  • Cable
  • Internet
  • Electric
  • Gas
  • Water
  • Personal Care items such as clothes, toiletries, bath and beauty

These are the detail expenses that you pay every week and sometimes can become so common you can forget to add them to your list.

  • Market & groceries
  • Child day care
  • Gasoline
  • Lunches
  • Other transportation like buses or tolls
Discretionary Expenses

These would be the other expenses that pop up from time to time but you have direct control on whether or not these expenses exist or how much is spent on them.

  • Impulse buys (Budget Busters)
  • Entertainment
  • Dining out
  • Snacks
  • Books
  • Magazines
  • Vacations or Travel expenses
  • Membership or subscription fees


How do you organize and prioritize your expenses? Leave a comment below and let me know.

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