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Categories for Organizing Your Budgets

As I mentioned here, good budgets should be Comprehensive in that they include all of your spending, and Organized in a way that helps you understand your spending better.  Mostly this means having good Categories.

retirement savings via budget software
Categories make spending comprehensible.

You need a set of Categories that captures all or at least almost all of your spending.  At the same time, the list needs to be short enough to help you make sense of things, but not so short that it doesn’t really tell you anything once you’ve organized all your spending into Categories.  The list also needs to be mutually exclusive and sensible enough that you don’t struggle trying to figure out how to characterize a certain kind of spending.  Not necessarily as simple as it sounds!

To help you get started, we’ve put some thought into this. There is a category list you can use that I’ve made available for you below. These are right out of our household budgeting software.  We use these categories today to create sub-totals and let our customers sort spending by category.  You can start using them as is, or tweak them to get the ideal household budget for your spending.

I think another place that is interesting to look at is the Bureau of Labor Statistics.  The US Government helpfully keeps track of how much people and families (they cleverly call these things “consumer units”) of different incomes and in different regions.  They slice and dice it every which way, including by age, income bracket and where you live. This information can be found here. Every report uses the same consistent set of spending categories.

FinanSavvy On-Line Budget Categories:

  • Apparel
  • Charitable Contributions
  • Child Care Services
  • Debt Payments
  • Eating Out
  • Education
  • Entertainment – Fees
  • Entertainment – Hobbies
  • Gifts
  • Groceries (Food and Housekeeping Supplies)
  • Healthcare (Insurance and Services)
  • Home Maintenance and Insurance
  • Household Furnishings and Equipment
  • Mortgage, Rent and Related Fees
  • Pets and Pet Care
  • Phone and Internet
  • Transportation Expenses
  • Television Services and AV Equipment
  • Utilities and Public Services
  • Vacations and Trips
  • Other

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Sightful Software, Inc. is neither a registered investment advisor nor a broker dealer. The Service is provided for educational purposes.