Budgeting 101 – Monthly Expenses List

Mother Working on Her Budget with Daughter - Xact Loans


Preparation and planning are key ingredients to succeeding at almost everything, and this is especially true when it comes to your finances. “By failing to prepare, you are preparing to fail,” Benjamin Franklin once said. There is no better roadmap to financial success than a budget, which allows you to adapt to “surprises” in your income while ensuring you can reach your financial goals.

For many, the goal of budgeting is matching their income to their expenses — aka “making ends meet” — and trying not to run out of money until the next paycheck arrives.  For others, the goal is building a savings account or nest egg.  Whatever your goal, prioritizing your expenses can help you decide how to distribute your money.

Planning and recording your expected income and expense items is important, but tracking your actual income and expenses against your budget over time is even more important. It gives you a realistic view of your financial situation while keeping your goals in mind.

As time goes by, you will have unplanned expenses.  Having a budget will allow you to see where you can make changes to afford the unexpected.  A budget can also help you save over time, so you can create an emergency fund for these situations.

Sticking to a budget takes practice and discipline, but it’s worth the time and effort.

How to Create a Budget

The first step is to write down your goal. If it’s saving money, set aside an actual amount you are trying to save and write out why you need or want it. It is ok to have more than one goal. After documenting your goal(s), you need to do two things: 1) list your last month or two of expenses, and 2) list your typical monthly income.

If you pay your expenses in cash, it may be challenging to remember everything you spent money on. There are a few places you can check for information.  If you have a checking account, review your statement. If you use debit or credit cards, you can review those statements as well.  Your calendar or day planner might jog your memory.

If you can’t gather the information for past months, start by tracking everything you spend this month.  Once you have a month of expenses listed, you can build your budget.  

Types of Expenses

Once you’ve collected all your expenses, consider allocating them into categories.  The following list may cover most of your categories, but you can add more to fit your needs.

Living Expenses:

  • Monthly living expenses/housing.  Rent/mortgage payment; utilities such as electricity, natural gas or heating oil, garbage, and water; other recurring expenses attributable to your housing costs
  • Transportation.  Car payments, gasoline, insurance, repairs, and/or bus fare
  • Meal Costs.  Grocery stores, convenience stores and restaurants
  • Medical expenses.  Insurance, prescriptions, and related expenses
  • Childcare expenses.  School costs, supplies, daycare and other items related to your children

Flexible Expenses:

  • Telephone/Internet/Cable.  subscriptions to radio, cable, or other information services, such as newspapers or magazines.
  • Clothing.  Anything wearable.  From coats, shirts and pants to purses/bags, shoes, earrings, and hair accessories.
  • Entertainment.  Going out to movies, going to the local pub, or travel expenses.  These are often discretionary expenses. Plan for and watch them closely because they can easily get away from you and dent your budget.
  • Miscellaneous.  Capture any other recurring expenses that you may have.
  • Emergency fund.  Put an amount aside each month to build up this fund.
  • Savings for your goal(s): Once you have a budget established, and you’re hitting it consistently, start to build toward your savings goal.  It’s ok to give yourself a few months to practice staying on budget – just don’t forget to go back to your savings goal.

Now that you’ve listed all your monthly expenses, you can turn to examine your income.