To get a good idea of where you spend most of your money and what you can budget more closely, keep all of your receipts and record your spending in the appropriate categories below.
Create a new category if you have to. Set up a spreadsheet in Excel to keep a running list. Or keep tab of how much you are spending in a notebook. Whatever works best for you.
Top 20 Budget Expenses
1. Mortgage (or Rent) payment
2. Vehicle payment
3. Health insurance
4. Other insurance (vehicle, renters or home insurance, etc)
5. Student loan payment
6. Credit Card payments
7. Other loan payments (personal, home equity, etc)
8. Savings
9. Retirement
10. Investments
11. Food
12. Gas
13. Cable and Internet
14. Phone and/or Cell Phone
15. Prescriptions and Medical co-pays
16. Other education expenses (books, supplies, etc)
17. Hobbies and Entertainment
18. Pet expenses
19. Other Miscellaneous Expenses (ex: unexpected repairs or frivolous spending)
20. … got an expense to add? Let us know below.
This is a general list of the top twenty expenses that most people in their twenties incur. The list is meant to help people sort out their actual living expenses and be able to properly set a budget. This list is not meant to be all encompassing, nor is it in any particular order. Actual expenses and order of expenses vary by reader.
With that said, make sure that you include everything since we all tend to forget the irregular expenses. Then analyze your spending habits. Figure out where you can cut back (usually on the unnecessary compulsive purchases) and set a goal for the following month.
Keep in mind: it will be hard to cut yourself off from a normal luxury, so start out by spending only half of what you normally did. A common example is cutting back on the Starbucks runs. Or even smoking less will save you a bundle.
At the end of the month, take the money that you saved and either pay down some bills or add it to your savings account. Make new goals each month going forward until you reach a comfort level and Voila! You have a budget!
Seem simple? Actually, it is. The hardest part is getting started. Good luck.
~K
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I break the Food category into Eating Out and Groceries. My wife and I try to limit how much we eat out, and being able to see how much you did/did not spend is a good reminder. Also, groceries can encompass more than just food.
A friend told me a few months ago about this little free online personal budgeting website, I have been using it for over three months now and it is too good to be free. I wish I had this at my disposal earlier in life before I went through my own hard financial lessons.
For those who want to benefit from a powerful online budgeting utility but do not want to give out access to bank accounts and personal identity, Out Of The Dark (OOTD) is worth a check at:
http://www.myexp.org/OOTD_gate.php
Happy budgeting.