Your guide on essential categories All budgets should include

If your salary disappears almost as quickly as it arrives, to budget can help.

You can think of a budget as a plan for your money – tells you where to put each dollar earned when it comes to your invoices, savings goals and discretionary expenses.

To create a budget that serves you, consider your spending habits, savings goals and financial obligations. The budgets do not adapt to the size and the items they include are very dependent on these factors. But you don’t have to start from scratch either.

Continue to read to find out which categories should include your budget, as well as subcategories and regular line articles that you may want to add.

In order for your budget to work, you must ensure -you include the three main types of expenses: needs, desires and savings. The proportion of your budget dedicated to each of these three areas may vary depending on your situation but the 50/30/20 Rule It’s a good place to get started. This rule states that 50% of your income is intended for needs, 30% are towards needs and 20% are used for savings, investments and additional debts reward.

• Needs: This includes both Fixed and variable expenses They are essential for daily life, such as housing, transport, groceries, clothes, medicines and minimum payments for debts.

• Flight: These are discretionary purchases: things you enjoy, but they would not necessarily pay in a financial emergency. These could include your membership in the gym, concert tickets, dining room and subscriptions.

• Savings: Savings include saving goals, investments and short -term debt payments beyond minimum monthly payment.

Although these three categories and the 50/30/20 rule provide a framework to organize your budget, you probably want to get more granular with specific subcategories and expenses.

The following is a list of common budget categories, subcategories and expenses for line elements. While these articles can be applied to most people, they will not apply to everyone. Do not hesitate to ignore these lines of line or subcategories that are not relevant. For example, if you do not have children, you do not need to include child care costs in your budget.

This list may not include everything you spend. When you create your budget, review your bank and Credit card statements To take expenses, this list does not include.

The needs should have about 50% of the total budget, although this may vary depending on your situation. For example, if you have young children on daycare, you may need to temporarily spend more than 50% of your income on needs to adapt to these high costs.

Include subcategories and following line items (those that apply) when creating part of your budget needs:

• Internet

• Telephone

• Electricity

• Gas

• Water

• Sewer

• Rubbish

• Groceries

• Meal delivery services

• Day care, nanny, nanny, etc.

• Cleaning supplies

• Laundry supplies

• Tools and supplies outdoors/gardening

• Food and pet supplies

• Know the invoices

• Haircuts

• Toilet items

• Diverse

• Credit cards

• Personal Loan

• Automatic Loan

• Other loans

With the Rule of 50/30/20, approximately one third of your budget goes to the needs or Discretionary expense. For some, this category may seem frivolous, but having an integrated “fun” expense helps you fulfill your long -term budget.

Please note that if your essential expenses are temporarily high or aggressively save on a big goal, you may need to reduce some discretionary spending.

The wishes category has more space for flexibility. Start with the following subcategories and line items, but add the expenses you like to spend money.

• Eating outside

• Shows and concerts

• Sporting events

• Subscriptions

• Hobby supplies

Finally, savings constitute the last 20% of your budget. This category includes savings for significant purchases, short -term savings and long -term goals, such as retirement. It also includes any investment, such as contributions to your 401 (K) or anger, and the additional money you want to launch to your debt (beyond minimum payments).

You can add some of the following expenses to the savings category:

• Student Loans

• Personal loans

• Credit card debt

• Furniture

• Electronics

• Vacation

While this list gives you an idea of ​​how you could organize your budget, you can organize it in any way that makes more sense to you. For example, if you eat regularly and consider it a necessary comfort, you can move this line of desires (entertainment) to needs (food).

Now that you have an idea of ​​what categories of expenses should include a budget, you can start creating yours. Although there are countless ways to configure your individual budget, the following steps describe the general process:

1. Track your expense. As mentioned above, you need to know where your money goes every month before you can configure your budget. Penteu -ye through your monthly expense and does not ignore timely expenses, such as insurance premiums and car repairs, which are not part of the expense of each month.

2. Categorize purchases using Rule 50/30/20. Once you have a complete list of purchases, you can classify them for needs, desires and savings. This frame will help you make sure you do not dedicate yourself to your needs while you do not save long-term goals.

3. Love monthly costs for each category, subcategory and line element. Find out how much you spend on average for each line line. If you have to guess, sign up -you highly, it is better to overestimate your expense than to underestimate it.

4. Assign all of your later income to the categories, subcategories and line items. For example, if you make $ 5,000 after taxes, you have about $ 2,500 to distribute -you are for your needs category.

5. Make adjustments as required. If your expenses are higher than your income you will have to make some adjustments. You can delete the categories you do not need or wish, or reduce your expense when possible. Remember -you can always adjust the 50/30/20 rule to adapt -better to your needs. For example, if housing costs are especially high, you can use a model 60/20/20 or 60/30/10.

6. Track your expense. A budget is only useful if you use it. This means keeping track of your expense and reconciling it with your budget. This allows you to keep your tabs in your expense and savings goals and make adjustments when needed. You do it by hand or through a Application of budget.

If your initial budget does not work, don’t be afraid to change things. Some people prosper in detailed budgets with hyperspecific line categories and items, while others prefer more flexibility. There is no correct or wrong way of budget so that you choose the method and categories that work you.