Budgeting – the first step in your journey to financial freedom.
No matter how much you earn, a custom-made plan of how to divide up your income can go a long way towards gaining control over how much you spend and save.
People often go wrong when making a budget by accidentally leaving out categories that will require money at some point.
That can leave other areas short and have you rearranging your finances to make them fit back into your financial plan.
This list is designed to cover as many personal budget categories as possible, but don’t be daunted by its size – not all will apply to you, and some you might be more comfortable thinking of in terms of an umbrella category instead of calculating each item individually.
No two people are exactly the same, so why would you expect to fit your finances into a generalized plan?
Creating a personalised budget makes it more likely that you’ll be able to stick with it and should mean you have fewer reasons to juggle money due to an unexpected expense.
Budgeting Basics
There are many methods of creating a budget, such as writing down how much you would ideally spend on each category and then adjusting the figures to make them fit into your budget, divvying up your income according to the 50/30/20 budget rule or working your way to a zero balance with zero-sum budgeting.
Regardless of how you set out your budget, remember to be realistic and think carefully.
Get resources that might help you plan, such as your calendar, utility bills, and bank statements you can scan for clues about where you spend your money.
Table of Contents
130 Budget Categories to Consider When Creating Your Budget
Here are 130 budget categories that you should consider when planning your budget so you don’t leave anything out.
Utilities
You can’t do much about needing utilities, but you can often shop around.
It’s worth doing some research to make sure you’re getting the best deal.
Your utility company also might offer incentives like a small percentage off the bill for paying by direct debit, freeing up some cash for other areas.
- Electricity
- Water
- Gas
- Telephone Bill (Home phone and/or cell phone)
- Internet
- Cable TV
- Heating
- Trash Removal
- Sewage
Food
Food is a purchase that people commonly spend too much on, but once you’ve bought your basic necessities, it’s also often one of the most flexible areas in a budget.
If you have many expenses coming up, you might need to take a packed lunch to work instead of buying one, skip the gourmet items and restaurant visits and just keep things simple and more frugal.
Watch out for hidden areas of spending like “top-up shops” between regular grocery shopping trips where extra items creep into the trolley or buying a morning coffee – even $5 a day can quickly add up.
- Groceries
- Fast Food
- Restaurants
- Coffee
- Extra groceries (such as cooking special meals for guests at home)
Housing
You have to live somewhere, and that comes with expenses.
Rent and fees are fixed, regular payments, but it might pay to think ahead and have some money aside for the repairs and other expenses for your home that often come up without warning.
- Rent/Mortgage Payments
- Council and regional rates
- Household Repairs
- Home improvements
- Home Owner Association fees
- Lawn care
- Pool supplies
- Home security
- Pet food
Debt Reduction
Almost all debts incur interest, which means you could be taking two steps forward and one step back in regard to your finances.
Paying off debt should be near the top of your list of priorities.
Paying more than the minimum payment gets rid of them quicker and reduces the amount you’ll pay overall.
You might want to consider consolidating your debt to only have one payment.
- Student Loan Payments
- Credit Card Payments
- Personal Loan Payments including BNPL
- Home loans
Transportation
If you own a car but sometimes find your budget is a bit tight, it can be tempting to avoid maintenance and check-ups.
Be careful that strategy doesn’t trip you up in the future.
You can’t ever guarantee that nothing will go wrong, but investing in your vehicle can prevent bigger problems ahead.
Public transport has more predictable costs but still needs to be accounted for.
- Car finance payment
- Petrol
- Toll Road Fees
- Tyres
- Oil Changes
- Other Routine Car Maintenance
- Parking Fees
- Roadside assistance
- Car Registration Fees
- WOF Check
- Public transport
- Taxi
- Uber
Health Care
Even if you are generally healthy, medical needs still should be considered.
Think about regular payments like birth control medication as well as once-off trips to the doctor.
- Health Insurance
- Dental Insurance
- Optical Insurance
- Non funded Prescription Drugs
- Medical Devices
- Specialty Medical Care (Physiotherapists, dieticians etc.)
- Mental health care (Counsellors, etc.)
- Pet medication (i.e. flea shots, heartworm medication)
- Gym membership
- Personal Training
- Vitamins
Non-Medical Insurance
Insurance looks after your future and takes a huge amount of pressure off if something goes wrong.
If you have a good emergency fund, you could increase the excess you want to pay to save money on regular payments.
- Life Insurance
- Car insurance
- Homeowners Insurance
- Contents Insurance
- Long-term/Short-term TPD Insurance
- Mortgage Insurance
- Funeral insurance
- Pet insurance
Household Items
Many people don’t plan where to take the money from when they need items like a new broom or toilet brush.
It’s a good idea to systematically think about each room of the house and what you use in there.
- Cleaning Supplies (Disinfectant, mops, brooms, dustpan and brush)
- Tools
- Kitchen Cookware
- Kitchen appliances (toaster, microwave, food processor, coffee machine etc.)
- Other Household Supplies (laundry detergent, paper towels, etc…)
- Household appliances (Irons, vacuum cleaners etc.)
Personal
Everyone has different personal care items that they use, but if you are looking for ways to cut back, it’s a good category to look at.
Try only to include the essentials and then use your entertainment allowance for items that aren’t absolutely necessary.
- Hair Care Supplies (Shampoo, Conditioner, etc…)
- Feminine hygiene products
- Salon/Barber
- Cosmetics
- Waxing
- Nail care (pedicure/manicure)
- Eyebrow Care
- Other Spa Services (facial, massage, etc…)
- ATM fees
- ID renewal fees
- Personal Hygiene Costs (deodorant, perfume, shaving cream, etc.)
Clothing
This part of the budget is for clothes you realistically need.
If you like shopping for clothes or like to make the occasional expensive purchase, you still can – just think about fitting it into the entertainment/fun section of your budget.
- Clothes
- Shoes
- Dry-cleaning
- Laundromat fees
Giving
Giving comes up more often than most people plan for.
A small contribution to a work party could come from your entertainment funds, but you can help yourself prepare for bigger gifts by consulting your calendar while making your budget to see what special events you have coming up.
- Charitable giving
- Contributions at work (going-away parties etc.)
- Birthdays
- Anniversaries
- Weddings
- Christmas
- Other Special Occasions
- Tithing
- Offering
Work
Sometimes, to get money, you have to spend some.
The “work” category covers expenses relating to your employment.
They might not be necessary every month, but don’t forget to consider them in your overall budget.
- Uniforms
- Shoes (Such as steel capped, enclosed or with extra support)
- Training/Certificates/Professional development
- Professional society fees
- Union fees
- Social clubs
Education
Education is vitally important, but it can be expensive.
Plan ahead to focus on studies, whether for yourself or your children.
- School Supplies
- Tuition (for yourself or children)
- Required School Fees
- Parking Pass
- Certification Fees
- Childcare
- Sports/Extracurricular Activities
- Field Trips
- Education Fees (Registration fees etc.)
- Uniforms/Dress Code
Services
Most people don’t use these services regularly, but they do come up and are important to consider.
If you’ve got any different life events coming up, like a change in relationship status or buying a house, you’ll have to think about consulting professionals.
- Financial advisor
- Lawyer
- Tax professional
Saving
When it comes time to save, it might seem like there are a million other things that you could do with your money – but it really is vitally important to get into the habit of regularly putting money away.
Savings help you “future-proof” your finances, gain financial freedom and achieve goals instead of living paycheck to paycheck.
Most budgeting experts suggest putting aside at least 10% of your income as savings.
If that feels impossible, remember that what’s important is putting something aside each time money comes in.
Save for emergencies and necessary future expenses, but if you can, save for fun things as well.
There is a proverb that says, “The best time to plant a tree was 20 years ago. The second best time is now”.
Don’t worry about how much you might have saved in the past – now’s the time to start.
- Saving for house deposit
- Saving for expected or unexpected gaps in income
- University savings
- Retirement savings
- New car savings
- Emergency Fund
- Investments
- Short-Term Savings
- Retirement (Kiwisaver, workplace superannuation)
- Children’s future
- Family holidays
Emergency Fund
An emergency fund is technically savings, but it’s important enough to be in its own category.
An emergency fund is an amount of money that is set aside in case of unexpected events.
You could lose your job, get sick, or become unable to care for yourself or your family.
The emergency fund must be separate from your regular finances but easily and quickly accessible.
We suggest having three months’ worth of everyday expenses saved if you can be frugal. More if you’re not.
How much you need might also depend on what kind of insurance you have and what it covers.
Entertainment
Entertainment is the last on the list, but wherever possible you should try to include some money to spend on things you like.
A budget with no allowance made for entertainment is unrealistic for most people, and will probably result in spending the money anyway, leaving other areas short.
Try to be realistic but if money is tight, unfortunately, this is one of the easiest targets for cuts.
- Holidays and getaways
- Sporting Events
- Games
- Concerts
- Movies
- Monthly subscriptions (Neon, Sky, Netflix, etc…)
- New electronics
- Babysitters
- Recreation Equipment
- Crafts and hobbies
Making a budget can be a daunting task, but it will allow you to take control of your finances and help secure your future.
One of the greatest benefits of budgeting is that it allows you to live your best life by making conscious decisions about your money.
No matter how much you have coming in and where you choose to spend it, a budget can help you make the most of your income.
