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Essential Budget Categories

One budget isn’t similar to another – everyone has different needs. However, there are life spheres on which everyone spends his money. There are six main categories on which people spend a large amount every month throughout their lives which are worth including into your budget.

Table of Contents


One of the most important budget categories is housing. Ideally, this category should account for no more than 35% of your income. If you find it difficult to reduce housing costs to 35% or less of your total budget, consider ways to minimize spending in other categories of your budget.

Essential Budget Categories

It may turn out you’d reconsider your life situation: refinance your mortgage, look for another apartment, or find a roommate. You must have room in your budget for the essentials, including savings for the future.


The share of transportation costs can take up no more than 15% of your income. Remember, transport isn’t just about paying for a car. This also includes its maintenance: oil, car wash, repair. Your transportation costs also include parking, public transport, and car-sharing.

As with the previous section, this is another category where it’s easy to overspend. But, unlike housing, the reason for it is actual cost underestimation.


Food is an integral part of our spending. However, this category of expenses can vary significantly. It is important to realize that the spending on food shouldn’t exceed 15% of an average budget to keep it “afloat” and balance all other areas of expenditure.

In the pursuit of budget savings, you shouldn’t forget about your health. Proper nutrition is a big investment in yourself, which will help you avoid the subsequent costs of doctors and medications.

Utilities and Credits

This is, perhaps, the least flexible group of expenses. It includes:

  • Water
  • Gas
  • Electricity
  • Cable and Internet connection
  • Phone

However, you can adjust the costs for this category as well. Revise your Internet and phone tariffs: perhaps you don’t use all the services available in it, and the tariff that doesn’t include them is somewhat cheaper – then it’ll be more rational to switch to it.

Essential Budget Categories

As for utility costs, here we apply one banal but effective advice: turn off the appliances while you’re not using them. Try closing the tap while soaping your hands, turning off the lights when you leave the room, switching to energy-saving lamps – you’ll see how these costs number will decrease.


The main expense of this category is health insurance, which people often pay for themselves (if the employer covers all your insurance, then you are very lucky). Also, it is necessary to have savings in case of emergencies – the so-called financial cushion, which you from unexpected expenditures. Besides, remember that you can always turn to Payday Depot in case you need an urgent financial boost.


Now that you know about the essential budget categories, keep in mind that saving money is key to cover all costs. Try to set aside 10% of each paycheck. You can create a separate piggy bank account that’ll be less accessible than a debit card, which will help reduce the temptation to spend this money.

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