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Budgeting can be a great tool to work toward more financial freedom in the future, as well as to improve your financial situation in the present.
If you’ve budgeted before, you might already know to budget for monthly expenses like groceries, rent and other housing costs. Perhaps you’ve even used budgeting formulas, such as the 50/20/30 budgeting rule, which splits your finances into three main categories.
- Essentials: 50% of your income
- Savings: 20% of your income
- Wants: 30% of your income
However, if you’re using a more nuanced formula, as you might with this online budget calculator, there are plenty of other small monthly expenses that might be all too easy to forget about.
That’s why we’ve compiled this list of monthly expenses to help you remember what to include in your budget.
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- Rent
- Groceries
- Daily incidentals
- Irregular expenses and emergency fund
- Household maintenance
- Work wardrobe and upkeep
- Subscriptions
- Guests
- Travel expenses
- Memberships
- Prescriptions
- Pet care
- Bank account fees
- Parking
- Car registration
- Entertainment
- Birthdays
- Holiday gifts
- Charitable contributions
- Labor union dues
- Child care
1. Rent
The first and possibly biggest monthly expense to consider is your rent or mortgage payment. Be sure to allocate a portion of your monthly income not only toward paying your rent or mortgage but also toward associated housing expenses like:
- Water
- Electricity
- Gas
- Sewage
- Internet
- Cable
- Security systems
- Trash
Image: housing-expenses-to-budget-for2. Groceries
According to the U.S. Department of Agriculture, Americans spent between $424 and $1,309 on food each month in 2022. Depending on your income, this can represent a significant monthly expense.
To help keep food costs in a reasonable place, be sure to include this monthly expense in your budget.
If you struggle to afford food each month, you can also check local food banks and charities or see if you may qualify for food stamps through the Supplemental Assistance Nutrition Program (SNAP).
3. Daily incidentals
It might not seem as if you’re spending much money on small expenses like the occasional coffee or drink with friends. However, it’s still wise to include these costs in your budget. You can start by tracking your daily incidental spending for a few months. Then total your costs — and include an average spending amount in your monthly budget.
4. Irregular expenses and emergency fund
It might feel difficult to budget for one-off expenses that you don’t know about in advance, but it’s still a good idea to have some money set aside for them in a savings or emergency fund. Emergencies happen, and having money budgeted for them can help alleviate some of the stress when the unexpected occurs.
Don’t forget to budget for irregular expenses you know about in advance — like a wedding or college fund. Even if you can only occasionally set aside money, you may be grateful for it in the future.
5. Household maintenance
Household maintenance is another living expense to consider. Consider possible expenses, like …
- Household cleaners
- Car wash costs
- Replacing or repairing damaged appliances
- Cleaning old or purchasing new furniture
- Annual HVAC services
- Gardening or landscaping work
- Snow removal services
- Pool maintenance
6. Work wardrobe and upkeep
If your workplace requires a certain wardrobe — like a suit or non-slip shoes — then budget for purchasing and maintaining these items. This can include budgeting for dry cleaning or shoe repair services.
7. Subscriptions
It’s possible to overlook subscriptions to music services, streaming services and online publications, so be sure to include them. Remember that you should also budget your phone and data usage to make sure your plan isn’t too costly for your needs.
8. Guests
If you have family or friends visiting you each summer or for the holidays, you may spend extra money at those times. This can include extra spending on groceries, laundry, transportation or entertainment when showing them around town.
You may want to account for this extra spending in your budget by putting a small amount of money away each month, even during the months you’re not going to have any visitors.
9. Travel expenses
You’ll want to budget for trips you take to visit family and friends. How much you budget depends on how you’ll be traveling, where and for how long. Figure out where you’ll be traveling and determine what the gasoline/train/flight costs will be. Also, be sure to budget for lodging and food.
Regarding vacations, you may find it easier to create a separate budget entirely because there are many more costs associated with longer trips.
10. Memberships
You might have to pay monthly fees if you’re a member of a gym or yoga studio. Remember to include these expenses in your budget. If you’re a gym member, you may also want to track how often you go. This can help you determine if your membership is worth the cost.
11. Prescriptions
If you have regular prescriptions, you may want to include these in your monthly budget. You may also want to budget for the costs of common medications like Tylenol, Advil and Claritin.
12. Pet care
Pets can be an important part of our lives, so be sure to budget for them. This can include planning for veterinary costs like vaccinations and checkups, as well as monthly costs like grooming and pet food. You can also budget for toys, waste bags, bedding, collars and leashes.
13. Bank account fees
Your bank may charge fees for low balances, ATM withdrawals, account maintenance and overdrafts. Include these costs in your budget. Tracking these fees can help you see where you can save money each month. You may even find that switching to a different bank will result in fewer fees.
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14. Parking
Parking is another monthly expense that might be easy to forget about. If you’re commuting to work, you might have to pay for parking now and then, or perhaps you’ve signed up for a monthly parking plan at your job or at a parking structure. Include these expenses in your budget.
15. Car registration
Some people might budget for gasoline costs but forget to budget for car registration. In some states, car registration can be hundreds of dollars, so you’ll want to account for it in your budget.
16. Entertainment
It may feel difficult to budget for entertainment because these expenses might be irregular or spontaneous. One method is to itemize all your living expenses, determine how much money you have left over, and set aside a portion for entertainment. If you don’t use your entire entertainment budget each month, you can save the extra money or roll it over to the next month.
However, don’t feel as if you can’t give yourself a healthy budget for entertainment. Saving money might feel too restrictive if you don’t allow yourself to spend on fun items as well.
17. Birthdays
Even if you prefer your birthday celebration to be more modest, you might want to spend some money on a cake or a nice bottle of wine. You can also keep some money in the budget for friends’ birthdays — whether for buying gifts or spending a fun night out together.
18. Holiday gifts
Holidays may sometimes feel taxing because of the financial strain from gift-giving. If this resonates with you, you may be able to make holidays less stressful by budgeting for gifts in advance. Estimate how much you typically spend on gifts around the holidays, and then divide by 12: that’s how much money you’ll want to put away each month.
You can also choose to spend your holiday gift budget on experiences instead — like taking your family on a vacation to make memories together.
Image: holiday-gifts19. Charitable contributions
If you’re altruistically inclined, feel free to make room in your monthly budget for a charitable donation. Make a list of your favorite charitable or religious organizations you may want to donate to monthly or annually.
20. Labor union dues
You might not pay much attention to this budget item if your dues come out of your wages, but if they don’t, you might want to include them in your budget. You can include them as an additional expense or subtract them from your income.
21. Childcare
If you work full-time, you might need to pay for day care, a babysitter or some other form of childcare. Remember to budget for any fixed monthly expenses as well as possible variable expenses. For example, some day care facilities might require you to reapply to enroll each year, and applications may come with a fee. If you pay child support or alimony, you can also budget for it within this category.
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What’s next: Review your budget monthly
Once you make a budget of all your monthly expenses, review it from month to month. You may find that your expenses change or that you find new ways to cut back and save additional money.
Paying your bills on time can also help you build your credit in some cases. A good credit score can help you in the future.
Sourcing
- American spending on food. Food spending as a share of income declines as income rises | USDA (October 2022)
