The 6 Budget Categories You Need for Your Simple Budget

Budgeting is the first step to meeting your financial goals. And whatever your financial situation, having a plan for your money is essential.

But that doesn’t mean that your budget needs to be complicated. You can make creating a budget downright simple!

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!


    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 or consumed, 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.)
    • Eating Out
    • Clothes


    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
    • Personal Care (haircuts, manicures, pedicures, etc.)
    • Insurance for Health Care
    • Renters Insurance
    • Dental Insurance
    • Childcare/ Educational Expenses
    • Gym Memberships


    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
      women typing on calculator

      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 monthly 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 a Category

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

      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 want to make saving money easy, 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 spend money and don’t know where it’s going. 

      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!

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

      Creating a Simple Budget with Just 6 Budgeting Categories

      Photo of author


      Kristen is the founder and content creator at Mom Managing Chaos where she teaches busy moms how to simplify and organize their life and finances. She writes about frugal living, budgeting, productivity and organization.

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

      1. 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!



      2. 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!

      3. What if I don’t have debt bc I claimed bankruptcy but can’t use any credit or get personal loan so when emergency comes often car, kids, etc how much emergency savings could I possibly need. Example driving on really bad brakes bc they want 900 to fix right now.

      4. Hi Maria,

        I don’t know anything else about your financials– how much money do you need every month, are you in a high cost of living, etc. These things would all impact what a solid emergency fund looks like.

        You mentioned that you have kids. Being that you have people depending on you, I would ultimately shoot for 4-6 months income saved as your emergency fund. That number is awfully intimidating when you think about it, so for a “starter” Emergency Fund, you’d probably want to save something closer to one month’s expenses and build up to the larger amount as you are able to work with your budget.

        I would also hustle to get that starter Emergency fund in place, because as you mentioned you have no other buffer. Once you have that cushion in place, I’d keep pushing toward having a few months worth of income stashed away.

      5. Why is the Renter’s Insurance under Living Expenses instead of with the Housing Expenses?
        Where does one put tithing/offering? I’ve looked at the 50/30/20 option but didn’t know where those items fit in. I assume that when I revisit that way of budgeting the categories will fit neatly into that budgeting method?
        Thank you for this post.

      6. Hi Chris,

        You can put it under either, as a budget is 100% customizable, but I include renter’s as living expenses as it covers my stuff and not the dwelling, but an argument can be made that it could be budgeted under housing as well.

        Tithes/offerings I put with savings personally since tithes and savings are the first things to be paid from every paycheck. While I recognize that it’s not savings it has more to do with how I pay my bills than the specific category.

        If you follow the 50/30/20 budget you could flip the 30% and 20% to allot for tithing (assuming you are tithing 10%). You could use 30% for tithing/savings/debt and the 20% for wants. End of the day, a budget is just a spending plan that you are making for your money. I wouldn’t stress about specific categories so much as making sure you are making a plan and accounting for your spending– if that makes sense.

        Part of the reason I look at my budget this way instead of having 120 categories is I was getting tired of all those categories and would dread looking at it. Simplifying it worked for me. I 100% recognize that this way of budgeting will horrify some people, but end of the day it’s what works for you and making sure you are staying on top of your spending plan/budget.

        When I’m reconciling my expenses, I still look and see if each bill is paid. The 6 categories is more about me just ear marking what’s important to me: Savings, paying down debt, housing (essential), transportation (necessary for job), consumables (essential–I need to eat)– living expenses to me is where I get all the wiggle room in my budget and therefore those get lumped together.

      7. Thank you for this article. I’ve split up a couple categories so I am using 8, but that’s still much less intimidating than the nitpicking I did before!

        Mine are; Housing (mortgage, utilities, maintenance), Transportation (car loan, insurance, maintenance, fuel), Consumables (groceries, paper products, cleaning supplies, toiletries), Leisure (eating out, entertainment), Living (clothes, haircuts, medical), Occasions (holiday, birthday, fundraising), Debt, Savings.

        I almost gave up on tracking expenses until I came across this article, thank you again!

      8. like the 6 budgeting plan. would love to have a sample sheet to show how to set it up on paper. if its possiblety

      9. I agree with not over categorizing, but I would suggest separating minimum living expenses from more discretionary expenses.

        For example: insurance, daycare, housing, groceries/household supplies, transportation are required.

        Eating out/ entertainment,clothes, gym, hair, manicure, pedicure are discretionary and the place that frequently gets out of hand.

        I would set up those main categories with a few sub-categories beneath. When I need to cut expenses I want to know if it is spending in eating out/ entertainment or is it clothes or hair/mani/pedi.

        I agree that it doesn’t make sense to waste time breaking out a visit to the grocery store between food and household supplies.

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