What categories and subcategories can you include in a budget?
Setting up a budget for your family is one of the best ways to get your finances in order.
On top of helping you understand how and where you are spending your money each month, a budget also allows you to identify places you can cut back on your spending to start saving and investing more.
But before you can start sticking to a financial plan for your family, you need to take the time to create your family budget.
With the help of this budgeting categories and subcategories list, you’ll learn exactly what line items need to be included in your budget for the best results.
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Budget Categories and Subcategories
A budget is typically broken into a variety of categories and subcategories to help you more easily track your income and expenses throughout the month.
This budget categories and subcategories list will help you decide which lines you should add to your own personal budget.
The first place to start when outlining your monthly budget is your income.
While some families may only have one or two sources of income, others my have several income streams coming into their home.
That’s why it’s important to consider all your sources of income, whether they’re a regular paycheck or an irregular income payment.
Your income budget category can be broken into a few subcategories based on your different income streams:
- Paycheck: You and your partner’s paycheck should be included in this subcategory. Include the total amount of pay you both receive for the month, regardless of whether you are paid weekly, bi-weekly, or monthly.
- Predictable bonuses: If you or your partner receive an annual bonus that is the same each year, this amount can also be included in your budget. You can include this line item as a monthly source of income by taking the total amount of the bonus and dividing it by 12.
- Investment income: Families who earn regular income on their investments should also include that money in their budget. Typically, investment income falls into three categories: rental property income, dividend payments, or earned interest. Include these numbers in your monthly income category under the subcategory of investments.
- Miscellaneous income: Any other income your family earns each month can be categorized as miscellaneous income. This income could come from freelancing, side hustles, returned purchases, reimbursements, irregular bonuses or incentives, or other passive income streams.
In addition to your income streams, you’ll also need to categorize all your monthly expenses.
There are several different expense categories to choose from.
The first category on this list is housing expenses.
Although the largest expense in this category will be your mortgage or rent, this budgeting category also includes other items that are related to owning or renting your home.
- Mortgage or rent: The monthly fee you pay for mortgage or rent is included in this subcategory.
- Household repairs: While household repairs may not be a regular expense, it’s a good idea to set aside money each month to be used when repairs need to be made.
- HOA dues: Whether dues are paid on a monthly or annual basis, it’s essential that they are included in your monthly budget. Annual dues should be divided by 12 and included as an ongoing line item each month.
- Renter’s or homeowner’s insurance: If your insurance payments are not included in your monthly mortgage payment, it needs to be included as a separate item in your budget. Renter’s insurance should also be added if it is a regular monthly payment your family makes.
- Large home-related purchases: Planning for big purchases for your home is another thing to consider when making a monthly budget. Large expenses can be broken into smaller monthly subcategories to help you save for the item when you’re ready to buy. If you’re considering a large purchase of one of these items for your home, consider adding it as a subcategory to your monthly housing expense budget:
- Large appliances, like a washer, dryer, refrigerator, or stove
- Heating and cooling system
Another big category to consider adding to your budget is expenses related to childcare and your children’s education.
This category can include several different subcategories based on the number of children you have, their ages, and the activities they’re involved in
- Tuition: Whether your kids are in private school or you have older kids in college, if you pay tuition for your children’s education, it needs to be included in the budget.
- Daycare and other afterschool childcare: Families who put their kids in daycare before and/or after school also need to factor that expense into their budget. Payments to nannies or regular babysitters can also be included in this subcategory.
- Registration fees: Between school and extracurricular activities, your family could have a variety of registration fees to consider each year. Make sure to include each fee in your budget.
- School supplies: While the biggest expense for this category may take place at the beginning of the year, planning for the purchase of school supplies will ensure you have money set aside.
- School lunches: If your kids pay for lunch at school each day, make sure to include this expense in your monthly budget. Otherwise, the money you spend to make their lunch can be included in your grocery expenses.
- Private lessons: Families who have kids that enjoy taking private lessons outside of school need to be sure to put the lesson fees into their budget under this subcategory.
- School field trips: Although field trips don’t happen each month, setting aside a small amount of money every month to be used for school activities is a good idea.
- Summer camp: Fees associated with summer camp should also be factored into your budget on a monthly basis.
- Babysitters: Paying a babysitter to watch your kids while you’re away is another expense that needs to be accounted for each month.
- Child support or alimony. Divorced parents should include any child support or alimony expenses under this category as well.
There are a variety of regular bills you pay every month that are considered essential expenses.
Those necessary expenses must be paid each month, which means they need to be a priority in your budget.
If you pay these bills, be sure to include them in your monthly budget:
- Electricity and/or natural gas
- Trash collection
- Cable or satellite
- Cell phone bill
- Landline phone bill
The expenses that come along with getting to and from your home can quickly add up.
That’s why it’s important to consider all the money you spend on your transportation costs throughout the year.
These transportation expenses are important factors to think about as you create your budget:
- Public transportation fare: If you don’t have a car, you’re not off the hook in this category. Paying for public transportation should also be included in the transportation expenses budgeting category.
- Gas: The cost of filling each of your cars’ tanks with gas is another essential item to consider in your monthly budget.
- Car maintenance: Although the maintenance on your car probably won’t be a monthly expense, you can predict when you’ll need to handle common tasks, like oil changes and tire rotations. Setting money aside for those expenses will ensure you have the money on hand when the work needs to be done.
- Registration and licensing fees. Another regular expense that comes along with vehicle ownership are the fees you pay for your driver’s license and car registration. While these fees are typically annual payments, setting aside money each month will help you have the money ready when the due date arrives.
- Parking fees: Whether you pay to park at work or at home, any fees that are paid that relate to parking your car should be included in your monthly expense list.
- Toll payments: Another factor to consider in the transportation category, regular toll payments should always be into your budget.
If your family has debt that needs to be paid, making those payments should be a priority.
That’s why all your debt payments should be included in your monthly budget.
There are a variety of different types of debt you could include in this budgeting category including:
- Student loans
- Credit cards
- Car payment
- Miscellaneous debt, like payments on furniture or electronics
When planning your budget each month, begin by factoring in the minimum payment on each of your debt sources.
If you have extra money leftover at the end of the month, that money can be applied to debt to help reduce the overall amount you owe on each of your outstanding loans.
We all need different types of insurance to be sure we are covered if something unfortunate happens.
When creating your monthly budget, each of your family’s insurance payments needs to be included as an expense.
Not all families will have all types of insurance, but there are several different line items to consider in this category (if you haven’t already included these in other categories):
- Homeowners insurance
- Renters insurance
- Car insurance
- Life insurance
- Health insurance
- Dental insurance
- Co-pays made for doctor’s visits and prescriptions
Similar to the insurance category, this expense category will vary depending on your family’s needs.
When thinking about the different healthcare expenses your family has, it’s a good idea to look beyond typical expenses like regular doctor’s visits and consider irregular expenses that may not happen every month.
These subcategories typically fall under the umbrella of the healthcare expenses budgeting category:
- Medications and healthcare expenses that are not covered by insurance
- Medical devices that your insurance does not cover
- Purchases of first aid items and over the counter medication
- Senior care
Feeding your family can be a big expense.
And it may be one of the categories that varies the most from month to month.
Food expenses typically fall into two subcategories:
- Groceries: All food that you purchase from the grocery store or superstore that you bring home to cook for your family can be included in this category. You can also divide this category into more subcategories, like meat, vegetables, pantry items, etc.
- Eating out: All other food that your family consumes outside your home. If you prefer to break this category down further, you could use subcategories like fast food, restaurants, coffee, drinks, and snacks.
In addition to purchasing food for your family, you’ll also have a variety of expenses that revolve around your household and your family’s personal hygiene.
These expenses vary from family to family and can include:
- Cleaning and laundry supplies
- Paper products, like toilet paper and paper towels
- Small appliances
- Home décor
- Emergency preparedness products
- Haircuts, styling, and treatments
- Other beauty treatments, like manicures and pedicures
- Clothing and shoes
- Costs of maintaining clothing and shoes, like dry cleaning and shoe repair
- Gym memberships
Expenses for Pets
Pets can seem like members of the family.
And that means all the expenses involved in caring for your family pet need to be included in your monthly budget.
Think about big and small purchases you make for your pet when outlining this category, including:
- Grooming fees
- Veterinarian visits
- Pet food and feeding supplies
- Pet accessories, like toys, collars, leashes, and litter
Purchasing gifts probably isn’t a regular occurrence.
But that doesn’t mean these purchases don’t need to be accounted for.
Planning ahead for gift purchases will ensure you don’t go overbudget during the months the gifts need to be bought.
And it makes buying those gifts easier because you already have the money available when you need it.
There are a variety of occasions to consider when planning out how much money you’ll need to set aside for this expense category, including:
- Christmas and other holidays
- Birthdays of members of the family and close family members
- Birthday parties your kids will be invited to
- Parties you’ll be invited to
- Baby showers
- Gifts for teachers
Budgeting doesn’t have to be all boring!
As you plan your budget, you can also think about the fun things you want to spend your money on.
Line items in the entertainment category can include all the fun ways you spend your money each month, like:
- Streaming services, like Hulu and Netflix
- Dates and family outings
- Movie and event tickets
- Subscriptions to magazines and subscription boxes
- Sports expenses, like equipment purchases and fees
- Hobby expenses, like supply purchases and lessons
Another important category to think about when planning your budget is how much money you’ll put into your savings each month.
And while having a standard savings account is a good idea, there are several other areas of savings to consider, including:
- Emergency fund: Setting aside money for emergencies is always a good idea. As a rule of thumb, it’s best to have at least three months of living expenses in your emergency fund.
- Retirement: Saving money for your future is another important subcategory to add to your budget. Retirement money could go into your company’s 401K, into an IRA, or into another investment account.
- College savings: If you have kids who plan to go to college, saving money for this big expense is a good idea. Make sure to budget transfers to a college savings account into your expenses.
- Vacation fund: Setting aside money for a family vacation is a fun way to save. Create a vacation fund category in your monthly budget to ensure you have enough money put away for an annual family vacation.
- Christmas fund: One great way to ensure you have enough money saved to purchase Christmas gifts for your family is to start a Christmas fund at the beginning of the year. Set aside a small amount each month to help you save for holiday shopping and avoid going into debt during the Christmas season.
- Tithing and/or giving: On top of setting aside money for yourself and your family, it’s also good to think about putting away money for charitable giving to your church or favorite charity.
Sometimes, there will be expenses that just don’t fall into any of the other budgeting categories.
If you see a line item in your bank statement that doesn’t fit within any of the categories listed above, it’s fine to put that expense into the miscellaneous category.
While there is no rule as to what expenses can be categorized as miscellaneous, there are a few different types of expenses you could add into this budget line, like:
- Bank and credit card fees
- Professional dues and license fees
- Investing fees
- Self-employment taxes
Tips for Categorizing Your Expenses And Income
While you may not need every single budgeting category and subcategory on the list, finding the right categories for your personal budget is the best way to ensure you have all your bases covered each month.
These simple budgeting tips can help you figure out what categories to use in your own budget and what expenses to place into each category:
1) Reference the previous month.
When you’re in the beginning stages of budgeting, referencing your spending from the previous month is a good way to start.
Make a list of all your expenses from last month and start putting each of these expenses into a budget category.
While your previous expense list won’t be all-encompassing, it will provide you with a starting point on which to build.
2) Keep your calendar handy.
We all have random expenses we need to consider throughout the year that don’t come up on a regular basis.
Referencing your calendar will help you think about those incremental expenses that add up over the course of a year.
Use your calendar to help you come up with extra expenses that may not be included in your regular budget, like:
- Registration fees
- Real estate taxes
- HOA fees
3) Start with the essentials.
If you know that reaching a zero budget is going to be a problem because you’ve been overspending, it’s a good idea to start by categorizing your essentials first.
Work your way down the list of important categories, starting with housing, then utilities, insurance, transportation, and medical expenses.
The other categories can be cut and manipulated to help you reach your budgeting goals.
How to Set Up a Budget
No matter what budgeting categories you choose to use, you’ll need to set aside time to organize everything into a comprehensive plan.
Getting started on your first family budget may seem like a big undertaking.
But the good news is that you really only have to go through the process of setting up your budget one time.
After sorting and organizing your categories, you’ll be able to easily follow the budgeting framework from month to month and make adjustments as needed.
These simple steps will help you get started on your budget.
1. Decide on a budgeting method.
Before you can start organizing your budget, it’s a good idea to decide what type of budgeter you’ll be.
There are a few different methods for managing your family’s finances, so picking the right one will depend on your goals and spending habits.
All the budgeting methods are mentioned in the next section so don’t forget to read that part!
2. Add up your income.
Once you have decided on a budgeting method, you can start putting your family’s budget together.
First, you’ll need to figure out your income.
Add up all your different streams of income to determine how much money you have coming into your household each month.
3. Track your expenses.
Next, you’ll need to tackle your expenses.
Take a look at past bank statements to get an idea of where you are spending your money each month.
Enter each expense into a spreadsheet or track your spending with the help of an app. Start by simply making a list of each past expense to ensure all your spending is covered in your budget.
4. Categorize your expenses.
After you have a good idea of where you’ve been spending and how much you spend on a regular basis, you can start organizing those expenses into categories.
There are several different budgeting categories and subcategories to consider.
While your family probably won’t have all the available categories in your budget, making sure each of the necessary lines are added will ensure you have the most accurate monthly budget to follow.
5. Divvy up your budget.
Now that you know how much money you have coming in and going out each month, it’s time to start budgeting.
Use your budget categories to determine how much money to allocate to each section of your budget, making sure not to go over your total income for the month.
6. Track your budget throughout the month.
When your budget is finished, you’ll need to keep track of your income and expenses as the month goes on.
You can create your own spreadsheet to keep track of your budget.
This is my budget spreadsheet. It has monthly and annual income, expense and savings summaries, trackers and charts. It has 3 different calculators to track your early retirement progress. You can adapt the zero-based budgeting style to this spreadsheet.
If you prefer budget books, here’s a list of the best paper budget planner books.
Or use an app like Mint, which connects to your bank account and automatically tracks your spending for you.
7) Stay on track.
Once you have your budget categories and system set, the work isn’t completely done.
You’ll still need to keep track of your expenses and income to ensure everything is going as planned.
If you notice that you’re starting to spend more than expected in a certain category, try to adjust your spending for the rest of the month to get back on track.
8) Adjust as needed.
No family budget is ever set in stone.
That’s why it’s a good idea to review your monthly budget on a regular basis.
Taking a good look at your spending and income each quarter is a simple way to ensure you’re making the most of your budget.
If you notice a pattern of over- or under-spending in a certain category, dig deeper to see what adjustments can be made to make your budget more realistic.
Continuing this process on a regular basis will ensure you and your family stay on track each month.
Related: Here are other budgeting tips to create a simple budget.
There are several different methods you can use to set up your budget.
Picking the best budgeting method for you and your family will depend on your financial situation and your goals for the future.
While some budgets are designed to help you pay down debt, others help you save more.
These budgeting methods are some of the most popular ways to manage your money:
1) 50/20/30 budgeting rule
This straightforward budgeting method is great for anyone new to budgeting.
This budgeting method breaks down your expenses into three basic categories:
- Necessary expenses (50%)
- Discretionary expenses (30%)
- Savings and debt payments (20%)
2) Zero based budget
Another popular budgeting method is the zero-based budget, which basically means that your income minus your expenses will always equal zero.
This budgeting method is great for families who have a regular income every month, allowing them to easily track their expenses and savings to zero at the end of the month.
3) Envelope system
Similar to the zero-based budgeting system, an envelope system follows the same concept of income minus expenses should equal zero.
But the difference between the two systems is:
The envelope system uses only cash.
Popularized by financial expert Dave Ramsey, this budgeting method helps families avoid debt by only making purchases with cash throughout the month.
4) Pay yourself first budget
If saving is a priority for your family, the pay yourself first budgeting method may be a good choice.
Since this method puts a focus on increasing your savings and paying down debt, it’s a good option for anyone prioritizing their family’s financial future.
With this budgeting method, you make it a point to address your savings and debt reduction goals first before paying any other expenses.
Final Thoughts on Budget Categories
Categorizing your income and expenses is an important component of the budgeting process.
I hope this list of budget categories and subcategories gives you ideas for what to include in your budget.
Related Budgeting Planner Articles
- Personal Budgeting Tips for Beginners
- No Spend Challenge: How to Not Spend Money for 30 days or More
- Best Money Saving Tips to Save You $1000’s
- 18 Things to Stop Buying to Save Money Every Day
- 11 Ridiculously Easy Ways to Save Money on Groceries
- Best Things To Spend Money On
- Best Paper Budget Planners
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