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If you’ve got a family in the suburbs it could be buying and maintaining multiple personal vehicles. Transportation is a big category – if you live in a big city maybe this includes bus/subway fare and Uber/Lyft.
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Here are some of the personal budget categories associated with housing. Whether you rent or own, housing is an essential item in every budget (unless you are living in your parents’ basement I guess). You can often make some small changes that have a big dollar impact on your budget. I always recommend that if you want to look for really effective ways to cut your budget (instead of cutting out your morning coffee), look at your housing. The first of the “Big 3” categories (housing, food, and transportation), housing generally accounts for 30% or more of your household budget.Īccording the the latest government statistics, those 3 categories account for 60% or more of the average household budget. In addition, you might have other sources of income you rely on each month. Similarly, if you’re paid every 2 weeks you’ll get 2 “bonus” months where you receive an extra paycheck (because there are 26 pay periods over 12 months). If you want to get more detailed (or if you are a spreadsheet and data nerd like me), you might want to track your total gross income and your payroll deduction expense separately.Įither way is perfectly fine, so just get tracking! If you have a commission-based or other variable income, you may have to estimate this number one month at a time for your budget, or try to determine an average. It’s an easier number, and it also eliminates some other expense categories you have to track because it’s taken directly out of your paycheck.
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If you’re just getting started, I would recommend tracking net income. Net income (after all payroll deductions, this is the amount that actually hits your bank account).Gross income (before taxes and other payroll deductions such as health insurance premiums and 401(k) contributions are taken out).How can I track my expenses automatically?įirst things first, you should have a handle on all your various sources of income and how much you expect to bring in each month.How much should I be spending in each category?.What categories should I include in a budget?.