The Only Six Budget Categories You Need!

The Only Six Budget Categories You Need!

Let’s talk about the only six budget categories you need to make your budget effective.

There are a lot of ways to budget. You can use the zero-sum method, the envelope system, or the 50/30/20 rule.


You can use a computer program, a whiteboard and marker, or a good old-fashioned pen and paper. But no matter how you budget, there are only six categories you really need to consider: housing, transportation, food, utilities, insurance, and debt payments.

All other expenses are non-essential and can be cut if necessary.


In this blog post, we will explore each of these six essential budget categories in detail and offer tips on how to save money in each one.

There are a lot of expenses that go into running a household, but when you’re trying to stick to a budget, you can break them down into six main categories.

Here’s a closer look at each one:

  1. Housing: This includes your mortgage or rent, property taxes, and insurance. It also might include things like HOA fees and home repairs/maintenance.
  2. Utilities: This covers your electricity, gas, water, sewage, and trash service. It might also include things like cable/internet and phone service.
  3. Food: Obviously, this is for groceries. But it could also include eating out sometimes, as well as other food-related expenses like cooking supplies and food delivery services.
  4. Transportation: This includes your car payment (if you have one), gas, car insurance, and public transportation costs. If you bike or walk instead of drive, it could also cover the costs of those modes of transportation (like a bike helmet or new walking shoes).
  5. Personal Care: This category is for things like haircuts/styling, toiletries, clothing, and dry cleaning. Basically, anything you need to feel put-together and presentable on a daily basis falls under this category.
  6. Miscellaneous: Finally, miscellaneous expenses are everything else that doesn’t fit neatly into one of the other categories – think entertainment memberships (like a gym membership or Netflix subscription), pet care costs


There are a lot of different ways to break down your budget, but most experts agree that there are only six essential categories. Insurance is one of those categories.

Insurance is important because it protects you from financial ruin in the event of an accident, illness, or other unexpected event. Everyone should have some form of health insurance, and if you own a home or car, you should also have homeowners’ or auto insurance.


Some employers offer health insurance as part of their benefits package, so be sure to check with your HR department to see if this is an option for you. You can also purchase health insurance on your own through the federal marketplace or a private insurer.

Auto insurance is required in most states, and it protects you financially if you are in an accident. You can purchase auto insurance through your state’s insurance marketplace or directly from an insurer.

Homeowners’ insurance protects your home and belongings in the event of damage or theft. If you own a home, it is probably required by your mortgage lender.

You can purchase homeowners’ insurance through your state’s insurance marketplace or directly from an insurer.

No matter what type of insurance you need, be sure to shop around for the best rates and coverage levels before purchasing a policy.

Debt repayment

Debt repayment is one of the most important budget categories. It is important to make debt payments on time and in full. This will help you improve your credit score and avoid late fees.

There are a few different ways to approach debt repayment. You can use the debt snowball method, where you focus on paying off your smallest debts first. Or, you can use the debt avalanche method, where you focus on paying off your debts with the highest interest rates first.

Whichever method you choose, make sure you stick to it and don’t give up! Paying off debt can be a long and difficult process, but it’s worth it in the end.


There you have it — the only six budget categories you need in order to get started on your financial journey. I highly encourage you to give this method a try and see for yourself how much easier it is to stay on top of your finances when you have a clear budget in place. Trust me, it will be worth the effort!



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