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The 6 Budget Categories You Need for Your Simple Budget

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Do you suck at budgeting? Are you stuck in the weeds of your budget every month?

I don’t know too many people who just love budgeting, but it’s not something that has to be super complicated to get the job done.

After multiple months of blowing it with traditional line-item budgeting, I gave myself permission to do it my own way. No more 120+ personal budget categories for this lady!

So, if you are blowing traditional budgeting methods (like I did) with the endless categories and nitpicking, check out how to rock your own super simple budget!

Simple Budget Template


A Simple Way to Budget

Uncomplicated is the name of the game!

Tracking my expenses using this method has made my life infinitely easier and saves me so much time at my end of month meeting with my finances!

No more separating out groceries from toilet paper. No more divvying up my receipt to try and figure out what categories were spent where.

It sends me into fits of anxiety just thinking about it.

I’m a mother of three small children. I barely have time to squeeze in a regular shower. I’m making it with Jesus and a can of Dry Shampoo every week, ya’ll!

With that in mind, I came up with a spending plan that lumped my expenses into one of six budgeting categories.

SIX, ya’ll!


Super Simple Budget Categories


Any expense related to housing would go into this category. Below are some examples for reference.

  • Rent/ Mortgage Payment
  • Utilities (Water, Trash, Electricity, Sewer)
  • Cable + Internet
  • Maintenance
  • Home Insurance
  • Property Taxes



Any expense related to getting to and from places would go into this category.

  • car payment
  • auto insurance
  • auto maintenance
  • fuel
  • parking/bus/rail expenses



Expenses that get used up, go in this category. One of my biggest struggles, when I was using a traditional line-item budget, was accounting for my one-stop shopping trips. Consumables is the answer to that problem.

  • Groceries
  • Household expenses (toilet paper, detergent, paper towels, sponges, etc.)


Living Expenses

This category is for everything else you are spending (most of which is discretionary spending)!

I know childcare can be crazy expensive. My daughter only goes part-time two days a week, so this isn’t a huge expense for us, but if your child(ren) are going full-time, I might consider moving it to its own category if for no other reason than ease of tracking.

  • Entertainment
  • Eating Out
  • Clothes
  • Personal Care (haircuts, manicures, pedicures, etc.)
  • Insurance (Dental, Medical, etc.)
  • Childcare/ Educational Expenses



If you have been looking at any of my other posts on budgeting, you know that some other budgeting methods (like the 50/30/20 method for example) have savings and debt together as two sides of the same coin.

If you are a Dave Ramsey follower he recommends you set up your Emergency Fund of $1K and then push all other money into paying debt down.

You should decide for yourself what you think makes sense for your family.

  • 401K
  • IRA
  • 529 Plan
  • Emergency Fund
  • Sinking Fund



  • Student Loans
  • Credit Card
  • Extra Debt Payoff



How to Set Up Your Simple Monthly Budget

Step One: Calculate Your After-Tax Income.

Calculate how much money you have left over after taxes, social security, Medicare, etc. If you have automatic deductions for things like health insurance or your 401 K, add those back in so you start with your correct income.


Step Two: List Your Expenses

The easiest place to start is with your fixed expenses (regularly occurring bills). Your mortgage or rent payment, car insurance, cell phone bill, cable, internet, etc.

Next, I’d list your other living expenses, debt payments, and savings goals.


Step Three: Assign expenses to one of the six categories.

Now, with your list of expenses file them into one of the six categories.

If you are a lover of spreadsheets ( I know I am!), grab the free Simple Budget Template in Google Sheets from my Resource library!

I’ve already set up the six categories and entered in some common expenses, but it’s editable, so you can customize it to fit your needs.


Step Four: Automate Where You Can

I am absolutely all about working smarter, not harder. We live in a time where you can automate all kinds of stuff. 

You can have savings automatically withdrawn, bills automatically paid– it’s the best thing since sliced bread!

Take advantage of this ‘easy button’.

If you set up your savings to automatically be withdrawn from your paycheck– you are far less likely to miss it than if you have to do it yourself.

The other side benefit is that you are much less likely to be late on paying your bills.

One last time, with feeling (!)– automate it!


Step Five: Track Your Expenses

A budget is amazing, but it won’t mean anything if you aren’t sticking to it! There are tons of really great ways to track your expenses.  Whether it’s a pen and paper, a spreadsheet, or budgeting apps and software. You need to know where your money is going!

I’m a huge fan of having a weekly budget! It’s far, far easier to correct your course 1/4 of the way into the month than it is once the month is over! If you have not been super diligent about tracking your spending before– you are in for an eye-opening experience I’m sure.

The first month we really started tracking everything, I realized that we were way overspending our budget for eating out. All of those coffees in the morning, the stops for a quick snack here and there added up quite an eye-opening sum of money.


Bottom line, planning what you want to spend is half the battle. The other half of it is sticking to the plan!


Related Budgeting Method Posts:

Zero Based Budgeting

The Cash Envelope System

The 50/30/20 Budgeting System

Budgeting for Beginners | Line Item Budgeting


I would love to hear about how your budgeting is going for you– please comment below!

simple budget categories


Creating a Simple Budget with Just 6 Budgeting Categories

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2 thoughts on “The 6 Budget Categories You Need for Your Simple Budget”

  • My 401k and Insurance are deducted from my paycheck along with my taxes. Do I add those back in? And I have auto deposits for an emergency account and a savings account deducted from my paycheck as well. So I’m usually working with a smaller net amount. Do u add that all back in to get the gross amount or work with the net after all deductions?

    Very confused! Help!



    • Hi, ViC!

      You want to budget with after tax income. So definitely don’t add your taxes back in. As for the other money saving accounts, I would say it depends on the kind of budgeter you are.

      If you are the kind of budgeter who likes percentages to base your budgeting around– for example, some people want to make sure they are saving 20% of their income. Then you’d just want to ensure that you are accounting for all of your automatic deductions for your savings within that 20%.

      If you are budgeting as a spending plan– for example, you get $2,000/ month and want to make sure your bills are paid before you figure out how much you have for groceries that month, then your automatic deductions matter less as that money never hits your checking account.

      I utilize the simple budget to account for my money in terms of spending, but more so for how I track my spending. I used to have 10 different categories for stuff I bought at the grocery store and it was excruciating at the end of every month trying to reconcile everything.

      Now, I just lump everything I buy they gets used up (food, toilet paper, shampoo, etc.) all into consumables and call it a day. Because if I budget $600 for those things, it doesn’t really matter that toilet paper and oranges are getting tracked in the same account if that’s how I planned it.

      Does that make sense?

      I love talking about budgeting so feel free to message me at [email protected] if you still have questions!

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