🍀 It’s where you can save the most each month and use the remaining money for savings or next month! Personal 🙋🏼♂️(5–10%) These expenses enhance your lifestyle, and cover any purchases or activities that aren’t necessary, but rather good to have. 🛠 Since we’re talking about essential expenses, it’s not recommended to use this budget for travel costs as well. Practically, you can include all the spendings tied to daily transportation - such as your public transportation pass, car payments, tolls or maintenance costs. It doesn’t matter where you live, it’s essential to use some kind of daily transportation to get where you need to go. Any prescriptions, doctor visits, medical devices or medical care should be included in this category. Healthcare is way more variable than insurance - even though they have the same level of importance. It’s clever listing all of your insurance plans in one place! 🚑 Whether it’s disability insurance, car insurance or health insurance (and there are many others!) you should know exactly how much you’re paying. It’s really up to you how you divide it! It’s recommended to keep 10% of your net income for food, however, if you know you enjoy eating out from time to time, you can use these 10% for your groceries, and track eating out expenses in the personal or entertainment sector. You have to eat, but you don’t always have to eat out! 🍽 We understand that everyone has different relationships with food - some take it only as a necessity, and for others it might be a variable spending for entertainment as well. 🛁 It can be monthly payments, essential equipment or mortgage - whatever is required towards housing. If you set a budget for these categories, you can track anything that you pay towards your accommodation. We can all probably agree that the biggest chunk of our income goes into this category! 😱 It’s also where you can easily spot if you’re living above or below your means. Apart from that, we are all relying on other necessary bills to pay: let’s break them up. These expenses are tied up with your needs - something you can’t imagine your daily life without.🙅🏼♂️ Of course, having a place to live and food to eat is not the only essential thing.
Please take this into consideration, as these are just general recommendations to inspire you, and which you can adjust to suit your needs.
We understand that this type of allocation is greatly dependent on the location of your residence and other region-specific expenses. Lets see what should fall into essential and non-essential spendings & what are the recommended percentages to set up a budget! 💸 But maybe you find yourself struggling with the precise allocation by spending category. Using Budgets in Specific CategoriesĪfter we’re left with the remaining 80% - how exactly do we use it? Is it enough to know that 50% of net income should go for necessities & 30% for personal purchases? Well, if that works for you, it’s enough.
#Personal budget categories how to#
You already know that the first step of successful personal finance management is to save or invest at least 20% of your net income! 💰 We want to show you how to allocate your net income even more precisely. Are you ready to take your budgeting knowledge to the next level? Last time, we taught you how to work with your income to maximize your cash flow using the 50/30/20 hand in hand with our budgeting system in Spendee.
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