There are hundreds of ways to create a budget. Finding one that works for you is the challenge. As a single mom, keeping track of my expenses is a top priority, I literally track every dollar that comes in and out. There is a very small margin for error or emotional spending, so keeping an effective budget is essential.
When I first started budgeting I tried different apps and worksheets . Some of them were good, but had nothing to do with my type of lifestyle and would only end up being too complicated to keep up with. Here is a list of my personal budget categories. I hope this helps bring some clarity to your budgeting process.
Some of the main tips to creating an effective budget are:
-Create a new budget before the month begins.
-Review your previous month’s budget, before creating the new one. This will help you find ways to cut back on unnecessary expenses and save more money. For tips on how to save more money visit – Saving Money Tips
-Keep your budget simple, and realistic.
-Track every expense, regardless of how small the expense may seem. Even coffee every morning for $2.00 may feel like a small expense, and unnecessary to track, but small expenses add up and can make the difference between taking an extra vacation with your family every year.
My income goes at the top of the list. Why? Because I need to know how much I have coming in every month to create an effective budget.
In the income area I add my base pay. Under that I add my bonus, overtime pay, and side hustle income which varies from month to month.
Note: I budget my bills and necessities using my base pay only. I never know how much a bonus, overtime or any other funds will be until I get it. Therefore, I never base my necessities on it. Once I receive those funds I use them towards saving, giving, or entertainment.
Bonus & OT
Giving is something that I added as part of my budget in the last couple of years. I enjoy giving, and I enjoy helping. However, making it part of my budget as a monthly commitment is a recent addition. In this category I include
Money to my local church
Charity (teen choice)
For my saving category I try to keep it very simple. I have previously tried a complicated system and I completely failed at keeping up with it. For my savings I have two categories. Why only two? Well, some of my savings come out of my checks automatically, such as my 401k. Therefore, I only keep two other categories.
I have seen many budgets that keep “eating out” as part of entertainment, however I decided to keep it under the food category. My teen and I mostly cook at home and prep meals, so the percentage we use to eat out is small.
My housing costs are rent only. But if you pay HOA or have home repairs this might be a good place to add those expenses.
I’ve seen budgets that list cell phone and internet under entertainment. I add it under bills as a necessity, since I use them for my business and my blog.
Transportation has been a big part of my expenses. Dropping of my teen at school every morning, driving to work, going to church and running errands all quickly add up.
Tags & Registration
We don’t get sick too often. (Knock on wood), but if we do and I have to buy medicine or pay for doctor visits, it is added under the health category.
I have medical insurance deducted from my checks. However, if that is an expense you have separately, you may add it under this category.
Clothing & Personal Care
My family is a family of two. My teen and I. So this expense is usually small. Therefore I decided to combine them.
Uniforms & back to school
Haircuts, shampoo, bodywash, moisturizer etc…
Lifestyle is the category I keep for non necessities. The “wants vs the needs”, these are bills I know I can cut back in case of an emergency.
Entertainment or fun category: movies, drinks with friends, Playstation membership for teen.
Gym Memberships: even though I consider staying active important, I keep this as a want since there are many ways to stay active.
Personal Development: books, courses and seminars
Because it is nearly impossible to plan for everything that can happen, I have found this category extremely helpful to have for one time expenses. This month I had to buy batteries for our scale. That is not a recurring expense so I added it under misc.
Gift category is only added on the months it is needed.
I currently have no outstanding debt. However, a couple of years ago I would add my credit cards, medical bills and collections to this category.
These are my personal budget categories as a single mom. Some categories I have seen other moms add are; day care, formula, pampers etc. You can definitely adjust your categories depending on your needs.
Clothing & Personal Care