The 16 Personal Budget Categories You Need in Your Budget

Creating a budget is the first step to getting out of debt and gaining the financial stability you have been looking for all your life. But, for that to happen, you need to choose the correct personal budget categories and understand which ones to prioritize and improve.

I always say that a budget is like a map of your finances. Hold it up, look at it closely and you can see exactly where your money goes.

When you divide your personal budget into categories, you can better understand how you spend your money and how you can adjust your spending based on your financial goals. So let me show you some of the best and most crucial personal budget categories you will have on your budget.

What Are Personal Budget Categories

Personal budget categories are a group of similar expenses within a specific subject to better understand how much you spend on particular areas of your life.

what are personal budget categories


For example, the amount of money you spend in the housing category will be absolutely different from how much you spend in the transportation category. Therefore, knowing how much money you spend on each personal expense category will let you control your money better. For example, the cash envelope system is very popular for having specific cash envelope categories.

The reason so many people fail to budget is that they only use the most common personal finance categories and account for significant expenses, forgetting all the little ones like that chocolate you bought at lunch or that $5 t-shirt at the grocery store. Having a list of personal budget categories is an excellent start to creating a budget that will work for you.

Personal Budget Categories List

I will give you 16 personal expense categories list to include in your budget, but depending on your circumstances, you may need to add or delete categories. If you don't have pets, children, or debt, you don't include those categories since you will not spend any money on them. Also, check the best places to shop on a budget.

Personal Budget Categories


This is the first category you need to include when creating your budget because you need to know exactly how much money you will have for the month. Also, don't forget to include your money after tax and not before. Otherwise, your budget will be wrong. You can use the free tool on the IRS website to calculate your earnings after tax.


Here are some examples of income:

  • Salary
  • Business Income
  • Commissions
  • Income From Investments
  • Money Gifts
  • Side Gigs
  • Selling Something


The housing category includes everything you pay to maintain a roof over your head. This is the category where most budgeters spend the most money since it contains your rent or mortgage. At least, this is the category where I spend most of my money when budgeting.


Here are some examples of housing expenses:

  • Rent/Mortgage
  • Property Taxes
  • Home Repairs/maintenance
  • Household Products
  • Pest Control
  • Yard Services

Essential Bills

The essential bills category includes all the costs you can't avoid or would be difficult to live without. It would be best if you were accurate in this category because Netflix and gym are not essential bills, and they will be included in a different one.


If you are on a tight budget and don't have a lot of money to cover all your expenses, you want to try to save some money here since it's easier to have the heater on cold days or air conditioners on sweltering days, but don't forget that adds up to your bills.

Here are some examples of essential bills expenses:

  • Electricity Bill
  • Water Bill
  • Heat Bill
  • Cable Bill
  • Internet Bill
  • Phone Bill
  • Trash/recycling


It's essential to consider your transportation costs since most people don't even realize how much they spend on transportation. If you use your car for every small trip (the ones you could walk) and keep paying parking fees without counting them on your budget, you are budgeting wrongly. 

It would be best if you also kept it up with the inflation of gas prices in case you need to add more money to your budget for this category.

Here are some examples of transportation expenses:

  • Gas
  • Parking Fees
  • Car Maintenance
  • Public Transports
  • Licenses/Taxes/DMV
  • Car Repair
  • Taxi Fares
  • Bike Maintenance
  • Bike Repair


Food is one of the personal budget categories where people spend most of their money without even realizing it. You pay $3 there, another $5 the next day, and when you know, you spent $200 more than you wanted. Checking where you are spending your money in this category and making some cuts can save you a lot of money at the end of the month.


Here are some examples of food expenses:

  • Groceries
  • Eating Out
  • Take Aways
  • Snacks

Personal Care

Personal care is any purchase that contributes to your well-being and daily items only you yourself use. This category can have essential and non-essential expenses. For example, going to a spa or buying a new cologne can be a non-essential expense. Still, a haircut is something you need from time to time, becoming an essential expense.


Here are some examples of food expenses:

  • Personal Allowance
  • Beauty Products
  • Personal Hygiene
  • Grooming
  • SPA Days
  • Massages
  • Toiletries
  • Perfumes
  • Clothing
  • Shoes
  • Accessories

Personal Development

As humans, we keep developing our skills and want to learn as much as possible to improve our careers or as a person. So this budgeting category will consider any courses, training, workshops, or conferences you take.

Here are some examples of personal development expenses:

  • Workshops
  • Conferences
  • Learning Courses
  • Coaching
  • Preschool
  • School Tuition
  • School Books
  • School Supplies
  • School Uniforms
  • Room and Board


This personal expense category encapsulates all child-related expenses (you can include school fees here if you prefer). For those who have kids, you know how much of your budgeting money will end up in this category, and no matter how much you put apart, it always seems you spend more than you want since kids are so unpredictable.


Here are some examples of children's expenses:

  • Kids Allowance
  • Daycare
  • Babysitters
  • Summer Camp
  • Sports Fees
  • Extracurricular Activities
  • Haircuts


If you have pets, you need to include them in your budget, and this category is for any money you will spend with them monthly, from food to veterinary bills. Some people prefer to include pet food in their food category when shopping in the supermarket, but I like to keep it apart to control my money better.

Here are some examples of pets expenses:

  • Food
  • Veterinary Bills
  • Medications
  • Toys
  • Grooming
  • Pet Supplies
  • Training


Medical and healthcare expenses are everything related to medical bills. It's always good to put some thought into this category, mainly because you never know when you need an urgent dentist appointment or have to go to the hospital.


Here are some examples of medical and healthcare expenses:

  • Doctor Bills
  • Hospital Bills
  • Dentist
  • Medicines/Prescriptions
  • Vitamins
  • First Aid Supplies
  • Glasses/Contacts
  • Eye Drops
  • Medical Devices
  • Wheelchairs
  • Crutches


We all have at least one insurance to fit into our budget. You want to be prepared for any emergencies, so dental, car, and health insurance are some of the most popular ones, so you should include this personal expense category in your budget.


Here are some examples of insurances expenses:

  • Life Insurance
  • Home Insurance
  • Dental Insurance
  • Car Insurance
  • Health Insurance
  • Pet Insurance
  • Liability Insurance
  • Business Insurance


The entertainment category is the number one you will look at when cutting some expenses to save money. Of course, this will include all the non-essential costs and things you do for fun, from going out with friends to any subscriptions and memberships you have.


Here are some examples of entertainment expenses:

  • Cinema
  • Theather
  • Going Out With Friends
  • Subscriptions
  • Memberships
  • Sport Activities
  • Sport Events
  • Music Events
  • Spa Days
  • School Excursions
  • Hobbies


Gifts are never an easy category because it varies from month to month. For example, some months you have more birthdays and holidays than others, so you will be spending more money. It's also difficult to predict because sometimes you meet someone, and after a few days, you have a birthday and didn't predict that expense on your budget.


Here are some examples of gifts expenses:

  • Birthday Gifts
  • Holidays Gifts
  • Special Occasion Gifts (Christmas, Valentine’s Day)
  • Co-worker Gifts
  • Donations


Many people forget to include their debt in their budget and are surprised that budgeting didn't work for them. However, it would be best if you started paying your debt to be financially free. You can include your mortgage in this section if you prefer, but I like to keep it in the housing section.

Here are some examples of debt expenses:

  • Car Loans
  • Educational Loans
  • Home Improvement Loans
  • Personal Loans
  • Debt Consolidation
  • Small-Business Loans
  • Overdraft
  • Credit Cards Bill

Financial Goals

Every budget should be set according to your expenses and financial goals. Without financial goals, you will not have a bigger purpose to keep your motivation and discipline when budgeting. Whether saving money, building an emergency fund, or investing your income, your financial objectives are crucial for your success in sticking with a budget.

Here are some examples of financial goals:

  • Buying a House
  • Emergency Fund
  • Debt Payments
  • Real Estate Investments
  • Starting a Business
  • College Savings For Kids
  • Retirement Contributions
  • Stock Investments
  • Sinking Funds


Miscellaneous is where you will allocate any expense that doesn't fit into other categories. This is because it's so much easier to have this category than other fifties. Now, don't be tempted to start putting many expenses as miscellaneous because you are not supposed to allocate a lot of money to this personal expense category.

Here are some examples of miscellaneous expenses:

  • Emergencies
  • Expenses that don't fit into other categories

Common Questions About Personal Expense Categories

These are the most common questions about personal expense categories.

What Categories Should I Put In My Budget

The categories you should put on your budget should be the ones that reflect your expenses. First, you need to make a list of all your large and small regular payments to understand how and where you spend your money. After that, you can put those expenses in categories and decide which ones you will have in your budget.

What Are The Three Basic Budget Categories

It depends on the budgeting style you choose, but the three most common ones are essentials (bills you can't live without), savings (putting money apart for your financial goals), and spending (things that are not essential but you have fun and joy doing them).

What Are Examples of Monthly Expenses?

Some examples of the most popular monthly expenses are housing, food, transportation, essential bills, children, pet, medical, personal care, and entertainment.

What Are Basic Living Expenses

The basic living expenses are the ones you can't live without or would be challenging to maintain good health. For example, some primary living expenses are housing, food, essential bills, healthcare, and transportation.


Every budget will look different depending on your individual needs. People have different incomes and priorities, so how you spend your money will differ from other budgeters. That's why you see different personal budget categories in each budget.

Now that you know what you need to include in your budget, you will be able to create a more personal and successful one. You can also check the most common budgeting mistakes and avoid them.

Michael launched Wealth of Geeks to make personal finance fun. He has worked in personal finance for over 20 years, helping families reduce taxes, increase their income, and save for retirement. Michael is passionate about personal finance, side hustles, and all things geeky.