How Many Budget Categories Do I Need?

Estimated reading time: 14 minutes

Managing a budget with 34 categories combined with our meticulous knowledge gives us control of our finances. Create a budget tailored to your needs!

Budget Categories That Fit Your Lifestyle

Being the budget maker means controlling your budget, including how many budget categories you use monthly.

I counted how many budget categories we have in our monthly budget and came up with 34.

Honestly, I thought there would be more than what there is.

When I designed our budget years ago, the thought never crossed our mind. We only have a few budget categories.

I have seen many budgets that might only cover everyday fixed expenses, and everything else is bundled into one or two other budget categories.

That type of budget would never work for our family.

Since we are so picky about the details and want to know where our money goes, I thought we did reasonably well with the budget categories we created.

I’ve also seen budgets with so many categories that I wonder if we’re doing enough.

We are our own worst critics regarding our finances.

However, it’s all about finding what works for you.

I received a short email from a fan asking about our budget categories.

Fan Question – Budget Categories

Dear Mr.CBB,

I hope emailing you is okay, but I wanted to ask about your free budget spreadsheet.

I’ve downloaded it because I want to start paying back my student loans and credit card debt so I can focus on saving to buy my first house.

I was a bit overwhelmed when I saw all the budget categories you have and wondered if I have to use them all, and if not, why do you have so many?

Thanks for any  insight,

-Carol K.

Budget Categories Paint A Detailed Picture

Hi Carol,

That’s a great question, and it’s one I’ve had the liberty to chat about with another fan a few years back when she was creating her family budget.

First, take deep breaths because everything will be okay because you have taken the first step in becoming debt-free and controlling your money.

Budgets can seem scary at first, mainly if you’ve never used one before, but you will make mistakes and learn from them.

The more you use your budget, the better your financial picture will seem.

No, you do not have to use every category that I have listed in the free budget spreadsheet that you are using.

Budget categories paint a detailed picture, showing the user how much money was spent in a particular budget category.

When we decided to incorporate the projected expenses into our budget, we needed to have all of our budget categories picked apart to manage them.

Only use whichever categories pertain to you.

You are also welcome to change the names of the budget categories depending on which of the two budget spreadsheets you download.

Both have detailed information that goes along with them that will help you to decide which budget is best for you.

When we created our budget, we aimed to break our expenses down to the nitty-gritty.

We were serious about paying off our mortgage in under five years, which meant we wanted to know where the money was going.

Breaking Down Budget Categories

Breaking down the budget with many categories helps us target certain expenses that might get buried with limited categories.

Since our grocery expenses were so high, we removed everything except food from the grocery budget category a few years back.

Our cleaning supplies and health and beauty fall under another budget category because we didn’t go wild spending money on these things.

Using Fewer Coupons

Even today, we hardly buy anything since we did the extreme couponing in 2011-2012.

We acquired many free cleaning supplies and tonnes of laundry soap, fabric softener, shampoo, gel, hairspray, toothpaste, etc.

I’ll admit that occasionally, we may pick something up that is a great deal with or without a coupon, but for the most part, we are still using up our stash.

Now that our grocery budget incorporates only food items, it helps us see where to improve.

It was the food we bought too much with and without coupons.

We hardly use coupons these days unless something matches an item we buy.

However, we do better with 50% off stickers and coupon apps, which give us a certain amount back for purchases without carrying coupons.

If you’re lucky, you can use both to score an even better deal.

When it comes to the budget, don’t let it push you away from doing what works for you.

If you don’t care about knowing how much you spend on parking every month, then combine that with another category.

You will be more comfortable knowing as much information as you want and less of what you don’t want to know.

We have a miscellaneous category for everything else we don’t have listed.

Updating Budget Categories

Every year, we check to see if there is another budget category we should add to track that expense.

Sometimes, you don’t think of one right away, but over a year, you realize you have spent quite a bit on something and want to track it.

This is how our budgeting categories are born.

I hope that helps a bit, and if you need any further help, please email me, and I’ll be glad to help you out the best I can.

Discussion: How many budget categories do you have and why?

Where Our Money Went

Where did all our money go in September?

This month was nothing other than ordinary.

As usual, a good chunk went into city taxes at specific periods throughout the year.

The rest of the expenses were living costs. I’ve already started back at my second job, so time is tight.

I haven’t gotten paid for my second job yet so you won’t see any difference in the numbers.

Any spare time has been used packing up the outside spaces at home, like garden furniture, and clearing up plant material that has started to turn and fall off.

I try to store as much of the outside furniture indoors over winter so it still looks brand new after almost five years of use.

This also helps save money because we don’t have to repurchase stuff. After all, it becomes weathered.

Mr. CBB

Our Free Budget Spreadsheet

You can download the free budget spreadsheets here.

• Budget 1– You can use the pre-existing categories or your own if you wish, and you can use projected expenses. Please read all the notes left around the budget for tips.
• Budget 2-Everything is pre-set, so you have to use the pre-defined categories. This budget will generate year-end budget figures where the other won’t, but you must use the categories already in this budget. If you change anything, you will mess up the formulas and year-end figures. Please read all the notes left around the budget for tips.

Our Family Budget Plan

I often have fans ask me how to budget money on a low-income or simply a high debt load and want to kill it like my friend Tony, who got rid of over $100,000 worth of debt by using a budget.

CBB fans want to know what we do to save so much money, and my reply is simple>> It’s not about the money. It’s about the process involved.

We are both money managers of our finances, and with our relationship compatibility, we have been able to get to where we are in 2015, debt-free.

It doesn’t matter if you are using a cash-only budget or you use your debit and credit cards; if your budget doesn’t balance, you have budget issues, you should review it pronto.

Learning to be your money manager is important because no one else will care about your money more than YOU!

We are currently debt-free, including the mortgage, which means all we pay for is our monthly bills and expenses.

One of the most important things we did for our finances was that we never let the budget deter us from reaching our goals.

Budget failure occurs when you give up on your budget, which should not happen as long as you genuinely want to reach your goals.

That is called living below your means. The only science to becoming rich!

Learn How To Budget: 10-Step Budgeting Series

Do you want to learn to budget as we do?

The complete 10-Step Mini Budgeting Series

1. How We Designed Our Budget Step 1– Gathering All the information
2. How We Designed Our Budget Step 2– Budget Categories
3. How We Designed Our Budget Step 3– Tracking Receipts
4. How We Designed Our Budget Step 4- Note-taking
5. How We Designed Our Budget Step 5– 5S Organization
6. How We Designed Our Budget Step 6– Who Does What and When?
7. How We Designed Our Budget Step 7– Balancing Our Budget
8. How We Designed Our Budget Step 8– Knowing our Coupon Savings
9. How We Designed Our Budget Step 9– Reading Our Bills
10. How We Designed Our Budget Step 10– Projected Expenses

Budget Percentages September

Our savings of  32.2% include savings and investments and emergency savings for this month.

The monthly totals come to 100%, which shows that we spent our income this month and used the rest as emergency savings.

The other categories were well within the defined percentage limits.

Our projected expenses this month are 24.26%.

Budget Percentages Month By Month

Expenses Breakdown

This is simply a breakdown of our expenses, which has helped us understand where all our money goes.

As of May 2014. we have been mortgage-free, so our money will be directed into savings, investments, and renovations.

I appreciate that you enjoy this budget update each month.

Still, I hope you view this as an educational tool rather than comparing your financial numbers, as our situations are all unique.

Although I encourage your comments and love to hear what you say about our budget categories and expenses.

Please don’t tell us to donate our money to charities because we have too much or are fortunate.

We are hardly out of the clear with finances for the rest of our lives and have worked and sacrificed to get where we are.

What we do with our “extra cash” is our business.

I hope that clears that up for those of you who had concerns about our extra money.

Budget Breakdown

1. Chequing– This is the bank account where all our debt gets paid.
2. Emergency Savings Account– This is a high-interest savings account.
3. Regular Savings Account– This savings account holds our projected expenses.
4. Monthly Budgeted Total: $4,916.82
5. Monthly Net Income Total: $7,281.58
6. (Check out our Ultimate Grocery Guide to see where our grocery money goes)
7. Projected Expenses: These are expenses we know we will pay for throughout the year = $1,766.35
8. Total Expenses Paid Out: $4310.72
9. Total Expenses Actually Paid Out: Calculated is $7,281.58 (total net monthly income) – $1,766.35 (projected expenses) – $1204.51 (emergency savings) = $4,310.72
10. Actual Cash Savings going into Emergency Savings: Calculated is $7,281.58 (total monthly net income) – $4,310.72 (actual expenses paid out for the month) – $1,766.35 (projected expenses) = $1204.51

Saving Money

What are Projected Expenses? (PE) – We project expenses throughout the year so we have the money saved.

As in the example below, A projected expense is automatically saved each month, so it is ready when the bill comes in or you need it.

We review our projected expenses at the beginning of the year to set up our yearly budget.

As we go along, if a new projected expense arises, we add it to the budget.

Sometimes, we remove a projected expense, so monitoring your expenses is very important.

This has happened on many occasions, but it’s bound to happen as we can’t predict everything we will have to pay for over the year.

The critical part for us is that we are saving for these expenses, and we no longer have to stress about withdrawing money from our savings to pay for them.

Read Step 10 in my budgeting series to learn more about projected expenses.

Budget For September 2015

It’s time for the juicy category numbers and to see how we made out with our monthly budget.

Below, you will see two tables; one is our monthly budget, and the other is our actual budget for August 2015.

This budget represents two adults and a baby plus all of our investments.

If it is highlighted in blue, it is our projected expense.

You will also see our budget does not include the emergency savings, as this is factored in at the end.

Actual Budget September 2015

 September 2015 Goals Reviewed

• Finish sanding and staining our son’s kitchen table and chairs– FAIL; however, I plan to finish this.
  
• Finish our son’s free rocking horse (handle missing, so I’m making one)- Fail I plan to get this done.
  
• Reach  4600 Twitter Followers- FAIL So close…
  
• Reach  6660 Facebook Followers- FAIL So close…
  
• Reach  2240 Pinterest Followers- PASS Huge jump for me with over 2.3K
  
• Reach 3,100 followers on The Free Recipe Depot Facebook-FAIL. I haven’t put much effort into this page lately, but I’m working on it.
  
• Finish the projected expenses- FAIL This may be a year-end budget remodel for me. I’ll keep trying.
  
• Finish the main bathroom shower- FAIL. I don’t have the time right now, but I will get it done once all the small stuff I have planned is out of the way.
  
• Pick new tiles for the bathroom and accessories (mirror, towel bar holder, etc.)- We started to look online at different colors and designs we were interested in.
  
• Buy a new blind for the garage- FAIL. I almost thought I found one at the Re-store, but it was too big.
  
• Finish the walls in the baby room- FAIL No, this may have to be put on hold until closer to the time he uses his room.
  
• Start looking at kitchen designs- PASS We have looked online at kitchen designs. We are considering hiring a kitchen planner, but I need more research.
  
• Look at pricing for a new insulated garage door- FAIL. I’m too scared to find out. I’m joking. It will cost us a lot of money, but it will be worth it.
  
• Sell baby stuff- PASS We sold a few things this month. Two hockey jerseys, socks, and a ride-on toy.
  
• Buy a pressure washer- FAIL I’m still waiting for it to go on sale.
  
• Prepare for Fall Clean-up- PASS This has started as I take a few hours on my day off to get a bit done weekly.
  
• Think about Halloween Costume- PASS We have a Happy Tiger in the house just waiting to go out for Halloween.

Budget Updates Month By Month

In case you missed our budget updates and want to do a quick search, I compiled them all on one handy page: monthly budgets.

For the 2015 Year, I will also keep track of each month just below.

In case you missed it, I will start the list with our end-of-year budget update for 2014.

• December 2014- Our Budget Year In Review
• January 2015
• February 2015
• March 2015
• April 2015
• May 2015
• June 2015
• July 2015
• August 2015

That’s all for this month. Check back at the beginning of November 2015 to see how we made out with our October 2015 budget!