What should you include in your budget?

When you’re making a personal budget, which categories should you include? What expenses can you expect?

Here’s the list that I use:

Fixed(-ish) recurring expenses

  • Housing (rent or mortgage)
  • Groceries
  • Utilities (e.g. electricity, home Internet)
  • Insurance (e.g. health, liability, travel)
  • Transportation costs (e.g. transit pass, gas, parking fees)
  • Fitness (e.g. gym membership)
  • Subscriptions (e.g. magazines, apps)

Discretionary recurring expenses

  • Eating and drinking out
  • Entertainment
  • Gifts
  • Travel
  • Clothing


  • Donations to charity
  • Large, one-time payments you expect in the future (e.g. moving apartments or buying furniture)

Capital depreciation

Don’t forget these!

Every now and then, you’ll want to make big purchases. It helps to save up  ahead of time. For example, you might periodically purchase a new:

  • Laptop
  • Phone
  • Bike
  • Car

Here’s how you can budget for these costs: If you buy a new phone every two years, save one twenty-fourth of the cost of a new phone every month. That way, when you need to buy a new phone, the money for it won’t have to come from other categories or from your savings.

Finally, budget for savings! What percentage of your take-home pay are you saving now? Can you increase that percentage a little so you won’t have to work as many years of your life?

Hope that helps.


— Peter

P.S. I love the app You Need A Budget. It can help you understand your spending habits and it can help you save more.

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