CREATING BUDGET CATEGORIES | Budget Tips, by The Budget Mom on YouTube. 16 min 7 s.
- Video length
- 16 min 7 s
- Time to do it
- 30 minutes
- Difficulty
- Easy
- Steps
- 8
What you need
Steps
Open your last two months of bank and card statements. Look at where money actually went, not where you think it went.
Write down every regular expense you find, such as rent, groceries, fuel, phone and subscriptions. Keep the list rough for now.
Group the expenses into broad buckets like housing, food, transport, bills, debt and fun. Aim for around 10 to 15 categories, not 40.
Create a catch-all category such as misc or personal spending. Small surprise costs go there instead of breaking your plan.
Give each category a monthly amount based on your past spending. Start with what you really spend, then adjust later.
Set aside a separate category for irregular costs like car repairs or gifts. Divide the yearly total by 12 and save that each month.
Use a budget category organizer worksheet or a simple spreadsheet with one row per category and one column per month.
Track spending for one month and check each category at month end. Rename, merge or split categories that do not fit.
Tips and common mistakes
Keep category names short and clear so you do not hesitate when logging a purchase.
Do not copy someone else's category list. Build yours from your own statements.
Review the list every few months and merge any category you keep forgetting to use.
Questions
How many budget categories should I have?
Most people do well with about 10 to 15. Fewer categories are easier to track, and you can always split one later if it gets too broad.
What if I forget to log a purchase?
Put it in your misc category and move on. The goal is a consistent habit, not a perfect record.
Do I need a spreadsheet?
No. A notebook works fine. A spreadsheet helps if you want totals and monthly comparisons without adding up by hand.
This guide was drafted from the video's details and general task knowledge. It has not been checked against the full video. Check the video and relevant product instructions before following a procedure. Report a correction.
