Gopesh Sharma
by Gopesh Sharma
6 min read

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  • Budgeting

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  • budget
Making Sense of Your Finances: What Should Be Included in Your Budget

The most important fundamentals of personal finance is to have a Budget. Your financial journey begins with creating a budget. So if you have started making a Budget, the congrats on taking the first step towards your personal financial journey. By doing this, you will be able to improve your financial circumstances now while also securing your future financial freedom.

To sum up, a budget is a financial plan that combines your income and expenses for a certain time period, most likely monthly. In order to create an effective budget, it’s important to include all of your sources of income as well as all of your fixed and variable expenses. What should be included in a budget is the question that now arises.

All the information you require on what to include in your budget is covered in this article. Although it’s not difficult to do, it could take some time until you find a budget that genuinely works for you.

What Should Be Included in a Budget?

If you are creating a budget, you should include your income, expenses both fixed and variable, savings, debt repayment and some general or occasional expenses.

  1. Income: It’s important to include all sources of income in your budget, so you have a clear picture of how much money you have coming in. This could include salary, wages, tips, bonuses, investments, and any other sources of money. So if you have multiple income sources, you need to combine all of them to find out your total income.

  2. Fixed expenses: These are expenses which remains the same each month and does not change much, such as rent or mortgage payments, car payments, insurance premiums, and membership fees. These expenses can be difficult to change, so it’s important to budget for them carefully. If there are changes, it will be quite small so that we can accomodate those in our budget.

  3. Variable expenses: These are the expenses that can change from month to month, such as utilities, groceries, gas, and entertainment. These expenses can be more flexible, so you may have some room to adjust your spending in these categories based on your needs and priorities. So that’s why getting an ideal number on thus category requires time.

  4. Savings: Setting aside money for short-term and long-term goals is an important part of financial planning. Your budget should include money for an emergency fund (to cover unexpected expenses), as well as savings for long-term goals like retirement. This includes, investment like Mutual Funds, Stocks, FD for Emegency fund etc.

  5. Debt repayment: If you have any loans or credit card balances, it’s important to include money in your budget for debt repayment. By paying off your debts, you can improve your credit score and overall financial health. This is very important and thus you have to accomodate money every month to pay off your debt at the earliest.

  6. Irregular or occasional expenses: These are expenses that don’t occur every month, such as annual or semi-annual bills (such as property taxes or insurance), gifts, and holidays. It’s important to budget for these expenses in advance, so you’re prepared when they come up. I usually do a recurring deposit every month so that whenever any expenses like these pops up, I use the deposit to pay them off.

If you are including all these items in your budget then you are in a good shape because this can give you the complete picture of your financial situation and thus you can make the informed decision about your money.

30 Things to Include in Your Budget

Let’s break it down and find out what things you should consider in your budget.

  1. Rent or mortgage payments: These are payments you make to your landlord or mortgage lender for the use of your living space. Mostly it is a monthly basis and thus it is must to be included in your budget.

  2. Property taxes: If you own a home, you may have to pay property taxes to your local government.

  3. Homeowners or renters insurance: Homeowners insurance protects your home and belongings in case of damage or loss, while renters insurance protects your personal belongings.

  4. Utilities (electricity, gas, water, etc.): These are services that you use on a regular basis, such as electricity, gas, and water.

  5. Internet and cable: These are services that provide you with access to the internet and/or television programming.

  6. Phone: This includes expenses for your cell phone or landline.

  7. Groceries: These are the items you purchase to eat at home, such as food and household essentials.

  8. Gasoline: This is the fuel you put in your car to power it.

  9. Public transportation or car payments: If you don’t have a car, you may use public transportation to get around. If you do have a car, you may have car payments to make.

  10. Car insurance: This is a type of insurance that protects you and your car in case of an accident or other damage.

  11. Health insurance: This is a type of insurance that helps cover the cost of medical care.

  12. Prescription medications: If you take any prescription medications, you’ll need to budget for these expenses.

  13. Life insurance: This is a type of insurance that provides financial protection to your loved ones in the event of your death.

  14. Disability insurance: This is a type of insurance that provides financial protection if you become disabled and are unable to work.

  15. Retirement savings: It’s important to save for your retirement, so you have financial security in your later years.

  16. Emergency fund savings: An emergency fund is a set amount of money that you set aside for unexpected expenses, such as car repairs or medical bills.

  17. Debt repayment (loans, credit cards): If you have any outstanding loans or credit card balances, you’ll need to budget for debt repayment.

  18. Entertainment (movies, concerts, etc.): These are expenses for leisure activities, such as going to the movies or attending concerts.

  19. Dining out: This is money spent on meals eaten outside of the home, such as at restaurants or fast food chains.

  20. Clothing: These are expenses for clothing, shoes, and accessories.

  21. Personal care (haircuts, laundry, etc.): These are expenses for personal grooming and maintenance, such as haircuts, laundry, and dry cleaning.

  22. Gifts and holidays: These are expenses for gifts and celebrations, such as birthdays and holidays.

  23. Hobbies and interests: These are expenses for activities and interests outside of work and daily life, such as sports or hobbies.

  24. Travel: These are expenses for vacation or business travel, such as airfare, hotels, and meals.

  25. Pet expenses (food, vet bills, etc.): If you have a pet, you’ll need to budget for expenses such as food, supplies, and veterinary care.

  26. Education expenses: This could include tuition, books, and supplies for school or continuing education.

  27. Childcare: If you have young children, you may need to budget for childcare expenses.

  28. Home repairs and maintenance: These are expenses for maintaining and repairing your home, such as replacing appliances or fixing leaks.

  29. Property management fees: If you own rental property, you may have to pay property management fees to a professional to handle maintenance and tenant relations.

  30. Professional development: These are expenses related to improving your skills or advancing your career, such as training courses or certification exams.

Again this is just a sample list which you should include in your budget, but there might be other expenses which is specific to your personal situation, which you should consider. The key here is to include all your income and expense. Budgeting is nothing but a learning process and thus it needs some trial and error before you will figure out the budget that will work for you.

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