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Budget Categories: A Basic Guide for Your Next Spending Plan!

Wednesday, March 25, 2015
We all are aware of what a Budget. I believe over almost a year and a half that I’ve been blogging under the finance category I’ve tackled this topic time and time again. I call Budgeting as a timeless personal finance tool. Once you know how to budget you’ll sure is on your right track to financial freedom. 

The very first post that I published is the 50-20-30 Rule of Budgeting. This budgeting technique is good for beginners. All you have to do is to simply allocate your income in different percentage such as 50% essential, 20% savings and 30% lifestyle. This by the way is less tithe. I believe that no matter what religion you are in, tithing is important. Give God what is due to Him.

I also featured two budget series which can be done by almost anyone. The Notebook Style and The Envelop Style. I remember when I was in college and starting to earn through hosting I use the above methods because I need to track the money that goes to my account manually. I don’t have any savings account back then so the notebook and the envelope helped me a lot.

Things that Ruin my Money is a blog post I created to remind myself of my the things that I need to stop doing in order to stick with my budget. These are common things that I believe a lot can relate to. Because of its success I even created a Part 2 entitled More Things That Ruin My Money.

Now if you still have no idea how to create a budget you can click any of the two posts below:
The last budget related post that I created is the 4 Financial Apps that You can easily download to further successfully track your spending. It is cool for the financial apps are free to download plus they really can ease the burden of writing down everything.

Now over the times that I’ve been obsessed with budgeting it only occurred to me last week  that to further seal the deal with a budget one must first choose the right budget categories as a start.

What are Budget Categories?

By budget categories I mean the items that you will allocate the money with.  I revealed in Turning Your Salary into Income what my monthly expenses are but I never shared the specific categories they belong with.

Some find choosing budget categories easy while others find it hard so today I’ll be sharing the different budget categories that your present or your future spending plan should have.
1. Tithes. This consists of 10% of your total income. Other variants of this budget category will be Offerings, Missions (if you are supporting a missionary) and giving fund.
2.  Bills. Bills refers to all the daily, weekly or monthly subscriptions that you need to pay with. Under Bills are the following:
  • Tuition Fee
  • Kid’s Allowance
  • Electricity
  • Telephone
  • Internet
  • Cable
  • Water
3. House. Though this could be included in the Bills category but I choose to separate this one to give you a much thorough breakdown on sub categories that you need to allocate money with when we talk about house.
  • Rental Fee
  • House Loans
  • House Repair Fund
  • Property Tax
4. Food. This category is of high importance for we need to eat in order to live. If you are someone like me who still is in the care of parents then the only item to budget is the daily breakfast and lunch. Dinner will sometimes be care your Mom same with how the weekend goes. (Thanks to the tight family culture of Filipinos) But for others who live independently and or are Moms below are much more specific allocation.
  • Groceries
  • Dine Out
  • Treats
5. Transportation. Personally, this is where most of my income goes since I choose to ride conveniently on an FX (Skyway) going to and from work. In short, I choose convenience over saving here. Below are other sub categories:
For those who commute will be a dedicated transportation allowance.
For those who own their car:
  • Fuel
  • Tires
  • Oil Changes
  • Maintenance
  • Parking Fees
  • Repairs
6. Investments. If you have different investment instruments then you need to allocate an amount for each.
  • Short term and Long term Healthcare plans
  • Insurance like Auto insurance and the like
  • Mutual Fund, Stocks and the like
7. Emergency Fund. This is something that you need to put emphasis –building your emergency. Put this as part of budget allocation so you won’t forget to put aside some money. You might also try the other funds I created that had renewed my financial life.
  • Fun Fund
  • Financial Goal Fund
8. Personal Expenses. This is anything that have to do with you or your family on a personal level.
  • Clothing Allowance
  • Load Allowance
  • Gym Memberships
  • Hair Cuts
  • Salon Services
  • Cosmetics
  • House Help
  • Subscriptions
9. Miscellaneous. There are expenses that just come along the way so its better to put aside some amount some reasonable amount.
I believe that there are far more budget categories available but what works for me is keeping my budget simple. The above budget categories just works very well in my experience and if ever you implement then let me know. I still have the copy of the 50-20-30 Rule of Budgeting and the categories I just mentioned above are available in that template. Let me know if you want a copy via email

Goodluck in budgeting!
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