The 7 Budget Categories For A Simple Budget

simple budget categories

Create a Simple Budget with these basic categories

Creating your budget is the first step to getting control of your finances and start reaching your financial goals.

But there is more than one way to find success with a budget. Some people (like me) like to see specifically where every dollar goes and have a very itemized expense list.

However, I know this method doesn’t work for everyone. So I want to share with you a simpler version of budgeting with just 7 budget categories.

If you don’t like having a long list of budget categories that can be super hard to track, then I want to introduce you to these awesome, simple budget categories that will ease the stress of budgeting. 

Simple Budget Categories

It is so easy to over complicate budgeting. But when you are already overwhelmed, going simple is the best method.

Divide up your spending into these basic budget categories and you will find that tracking your expenses, and budgeting overall, will be a lot easier. 

And again, there are only 7 categories you need to worry about. So let’s jump in!


This first category is all about everything related to your housing. Some example include:

Utilities (Water, Sewer, Garbage, Electric, Natural Gas)
Homeowners/Renters Insurance
Property Taxes


Anything that has to do with your cars or getting around from place to place. This category could include:

Gas for the cars
Car Insurance
Maintenance/Repairs for the cars
Public Transit fees/passes
Parking Fees
Car Payment


This is one of the biggest categories, and one of the easiest to overspend on. But, putting all consumables into one category will help you keep track of where the money is going.

No need to separate food from household items. If it is consumed in your home, it goes here:

Household items (laundry detergent, dish soap, toilet paper, diapers, etc)
Eating Out


This category is basically a catch all for paying for other living expenses. 

Some things in this section might include:

Subscriptions (Netflix, Hulu, Amazon Prime, Magazines, subscription boxes)
Child Care
Personal Fun Money
Gym Membership
Beauty and Personal Care
Medical Insurance (If you pay for private insurance)
Kids Extra Curricular Activities


I don’t care what kind of budgeting system you use, you need a Miscellaneous category in your budget. This is the category that will help you stay on budget every month.

How does it do that? This is the one that you use for any small, unexpected expense. It doesn’t have to be a large amount each month, but you need it. You might use this category for unexpected things like:

Wedding gifts
Baby Shower Gifts
Kid’s Birthday Party
Sports Team Pictures
Boy Scouts selling candy bars

Honestly, the options here are ENDLESS. Have a miscellaneous category. Your budget will thank you.


If you are working on paying off debt, it needs to be included in your simple budget. Pretty much all debt payments go here.

We already accounted for the car payment in Transportation, and the mortgage in Housing, so we won’t double count those and put them here too. Everything else though….

Student Loans
Personal Loans
401(k) Loans
Credit Cards
Home Equity Lines of Credit
Extra Debt Payments (work that debt payoff plan!)


Once you are out of debt, you can work more in saving more aggressively.

You should have a starter emergency fund to help cover any small emergencies while paying off debt. Dave Ramsey recommends $1000 to start.

After debt is paid off you can work on things like:

Retirement Saving (401(k), Roth IRA, etc.)
House Down Payment
Sinking Funds
Fully Funded Emergency Fund (at least 3 months of living expenses)
529 College Education saving
New Car Fund

And really anything else your heart desires.

Create Your Simple Monthly Budget

The basic steps for creating your budget, whether super detailed or with simple categories is just about the same. But we will go over it here to help you get started

Know your Income

When you budget, you need to know how much you have to work with. So you need to know how much actually gets deposited into your bank account.

Do not use your income that is stated on your tax forms. Use the income that you actually get to see, after taxes, and other with-holdings, have been taken out. 

List Your Expenses

This could take a little time. But you need to know what expenses you have coming out. Start with the expenses that are the same amount every month (rent/mortgage, internet, cable, phone, car payments etc.)

Then find out how much you spent on all your other expenses for the last 30 days. This will give you a good starting place.

Divide expenses into simple categories

Next you need to take each of your expenses and decide which category each expense belongs in.

Make sure that it makes sense to you. Your budget is your own and will look different than your friend’s budget. So make sure how it is organized makes sense in your own head.

Then add up each expense, within each category, so you have a number for your budget for each category. This is the budget amount you will work to stay within each month.

Simplify with automating

Having a calendar out and knowing when each bill or expense is going to get paid is awesome. But take it one step further–automate those payments.

We only have 2 bills that are not taken out automatically–and only because I haven’t figured out how yet. Everything else is on an auto pay schedule so I know they get paid on time and I don’t have to think about it.

You can also do a set it and forget it method for your savings. When you don’t have to think about where the money needs to go, how much and when, it makes life so much easier! 

So do yourself a favor and get going on setting up auto payments so you won’t miss a payment again!

Track, track, track

Yay! You have your budget made. But right now those are just numbers on a page. 

In order to make your budget really work for you, you need to track where you are spending your money. I cannot stress this enough. A budget is only as good as how much you use it.

So, using your new simple budget categories for your home, track your spending. Record it. And at the end of the month you will be able to see how much you spent in each category.

Did you go over? Did you come in under budget? Use this information to tweak and refine your budget numbers. Do you need more money allotted in one category and can get by with less in another?

This is how to create a budget that truly works for you and your family. Your budget is not a one and done financial tool. It is always changing and evolving with you. So use it so you can live your best life!

Final Thoughts on having Simple Budget Categories

I hope this list helps you to see that budgeting does not have to be super in depth and complicated. You can utilize these simple categories for basic personal budget and achieve great results.

You need to create a budget that will work for you! So give this simple budget a try and let me know how it goes.

Your financial journey is your own. So make your budget your own so that it works for you.

The 7 Budget Categories You Need for your Simple Budget

7 simple budget categories

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