10 Common Monthly Expenses To Include In Your Budget

Some products in this article are from our partners. Read our Advertiser Discloser.

By having a list of your monthly expenses and pairing that list against your monthly income, you can arrange your spending in a way that aligns with your true financial goals.

I used to abhor the idea of using a budget. Budgets made me envision a life of a ball and chain existence where I wasn’t allowed to have any fun or spend any money outside of basic expenses.

However, after I started consistently using a budget five years ago, I found that budgets really do promote freedom, not chains.

Common Monthly Expenses

Typical monthly expenses can be broken down into several basic categories.

  • Housing
  • Food
  • Child-related expenses
  • Debt obligations
  • Health & Fitness
  • Transportation costs
  • Personal care
  • Pet care
  • Entertainment
  • Miscellaneous expenses

Let’s talk about each category and what types of expenses you might assign to each one.

1. Housing

Home expenses will include everything related to your home, including items such as:

  • Your monthly rent or mortgage payment
  • Maintenance costs such as landscaping, replacement light bulbs, etc.
  • Repair costs such as a need for a new vacuum, furnace, flooring, etc.
  • Utility bills such as electric, natural gas and water
  • Property taxes (unless they’re collected with your house payment)

Some of these types of costs may fluctuate each month so you’ll need to keep that in mind when you create a monthly budget.

One good way to prepare for larger costs such as a new furnace would be to have a special savings account where you put money aside each month that is specifically designated for large home repairs in the future.

2. Food

Food expenses can include any costs you spend on eating, such as:

  • Weekly and random grocery trips
  • Money spent on school meals for your kids
  • Drive thru runs or takeout meals
  • Food costs associated with work, such as lunches, coffees, etc.

You may do things differently, but some people also add restaurant trips in this category.

We put restaurant trips in the entertainment category unless we go purely for the reason that we need to eat and aren’t near home.

In those cases, we add restaurant trips into our food category.

3. Childcare

Child related expenses can include anything related to the care of your child that’s not a part of your health care expenses, which I recommend tracking separately.

Some ideas include:

  • Day care expenses
  • Extracurricular expenses such as hockey or dance
  • New toys that aren’t gifts for a birthday or other holiday

I don’t add expenses such as health care expenses in this category; we’ll talk about those in another category.

4. Debt

Some people like to break debt payments down into the individual categories they relate to, such as putting your car payment into the “transportation” category.

Others find it more helpful to keep ongoing, monthly debt payments in a separate category.

Debt obligations might include:

  • House payments or home equity loan payments
  • Car payments
  • Credit card payments
  • Student loan payments
  • Child support or alimony payments

However you choose to categorize them is up to you, of course; just be sure you’re including them in your monthly expenses when working with a budget.

5. HealthCare

Health care expenses are important to track because believe it or not, it’s possible to waste money in the area of health care just as it is with any other category.

One benefit of having a budget and tracking your expenditures each month is that you will more easily be able to recognize where you’re wasting money.

In the case of health care, waste it can be as simple as choosing a name brand drug over a generic drug.

Examples of health care expenses:

  • Payroll deductions for health care, dental and vision coverage
  • Costs for monthly or occasional prescription and over-the-counter meds
  • Payments for doctor and dentist bills
  • Deductions for monthly savings going into an HSA (Health Savings Account)

Again, with healthcare expenses, it can be helpful to save in advance if you’re expecting a big medical expense down the road such as surgery, the birth of a child or braces for one of the kids.

A health savings account is a great way to do that with extra tax advantages if you qualify for one.

Tip: Want an easy way to budget? Check out Tiller which uses spreadsheets but pulls in all of your bank account info automatically.

6. Transportation

Transportation expenses can include any money you spend to get where you need to go, such as:

  • Car payments (unless you’re putting them in the “debt obligations” category)
  • Public transportation costs or ridesharing costs
  • Gasoline costs
  • Vehicle maintenance and repair costs
  • Monthly savings designated toward the future purchase of a new vehicle

Saving toward the future need for a replacement vehicle is important in order to avoid having to take out a loan when the need for a new vehicle arises.

Trust me: you’ll LOVE the feeling of paying cash for your next car.

7. Personal Care

Personal care expenses include anything needed (or wanted) to take care of yourself, such as:

  • Toiletries such as soaps, shampoos, toothpaste, shaving cream, razors, etc.
  • Gym memberships
  • Salon expenses for haircuts, manicures, etc.

And any other costs associated with the care and maintenance of the people in your family.

8. Pet Care

Pet care expenses are any costs associated with having pets.

Some examples of pet care expenses:

  • Purchase of a pet and any coordinating care items
  • Veterinary bills
  • Pet grooming costs
  • Food, toys and treats for pets
  • Care for pets if you are away and they need to be cared for by someone else

Pets can be expensive and it’s a smart idea to consider monitoring what you spend on them to help ensure you can afford their care and upkeep.

9. Entertainment

Entertainment expenses include any type of money spent on having fun.

In your entertainment category you might include:

  • Weekly date nights
  • Trips to the movies
  • Trips to museums or theme parks
  • Vacation expenses
  • Purchases you make just for fun, such as buying a new movie on DVD
  • Restaurant trips that are just for fun

Any non-necessity expense you have for the purposes of having fun will go into this category.

Again, especially where vacations are concerned it’s helpful to save money ahead of time so you can pay cash for your vacation when the time comes.

10. Miscellaneous

Miscellaneous expenses would include any items that don’t fit into the above categories. Some ideas might include:

  • Gifts for birthdays and other holidays
  • Donations to charitable organizations
  • Monthly miscellaneous spending for each spouse (Deacon likes to call it guy/girl money)
  • Any other expenses that don’t fit into other categories

In other words, if you can’t find another category that seems right for an expense, you can always add it into the “miscellaneous” category.

Now that you have an idea of what types of common monthly household expenses there are, you can create a budget that works for you.

How to Create a Budget

Well Kept Wallet has a great starter budget form that can help you do that. As you begin creating your monthly budget, you’ll want to start by listing all of your income sources.

You can list your income sources as “gross” (without deductions) or “net” (with deductions). If you decide to list your income in its gross state, you’ll want to add an additional household expenses category that includes all of the deductions from each paycheck.

I like working with my net income as it makes my monthly budget simpler, with one less category to account for.

After you’ve made a list of all of your income sources, you’ll want to use the expense category information above to list all of your expenses. This next part is simple: subtract your total monthly expenses from your total monthly income. The difference is called your “discretionary” income.

What do you do with your discretionary income or the income that doesn’t have a place? Many people just use this money to spend on whatever opportunities come their way during the month, but I’ve got a better idea.

Try using a Zero-Sum Budget. A zero-sum budget means that you account for where every dollar you make will go – before your paycheck even hits your bank account.

This way you minimize the possibility of wasting hundreds of dollars each month.

Instead of leaving your monthly discretionary income to be used for miscellaneous purchases that don’t bring any value to your life, you would decide how you can best use it to achieve your financial goals.

As an example, let’s say one of your financial goals is to pay your house off early. How much faster would you be able to pay off your house if you used your discretionary income of, let’s say $400, to pay your house off early?

Here’s an example. Let’s say you purchase a $200,000 home and put 5% down and take out a 30-year mortgage. If the interest rate is 3.88%, your monthly principal and interest payment will be $893.99 for 30 years.

However, if you add an additional payment every month of $500 from your discretionary income, you’ll cut your mortgage term in half and have your house paid off in 15 years.

Even if you only make an additional payment of $250 each month on your mortgage, you’ll still knock over 10 years off of your mortgage term.

Another idea would be to use your discretionary income to invest it in order to build wealth so you can retire early.

If you invest your discretionary income of $500 per month in an investment account that earns an average return of 8%, and do so for 30 years, you’ll have over $700,000 in cash available that you wouldn’t have otherwise had.

What could you do with an extra $700k?

The point is that using your discretionary income toward a targeted goal as you budget, as opposed to just nickel and diming it away with unplanned purchases, can be absolutely life-changing for your financial situation.

Consider that thought as you decide what to do with that monthly discretionary income.

What if I Don’t Have Discretionary Income?

Sometimes when people create a budget, they find that there’s nothing left over to save or pay extra toward debts.

In some cases, people find after creating a budget that they’re actually in the hole, meaning they have more expenses than income.

If you’ve created your budget and found that you have more expenses than income, you’ve got two choices: cut your expenses, or increase your income.

Slash Your Expenses

If you need to reduce your monthly expenses, it might help to do a “challenge everything budget”. The link explains it in detail, but basically, your goal is to go through every line item on your list of monthly expenses and ask yourself one question:

“How can I reduce or eliminate that expense?”

This might mean that you have to buy used DVDs instead of going to the movies, stop eating out or stop spending money on salon trips for the time being, but it will be worth it as you improve your financial situation.

As you do this, you’ll likely find that your budget numbers are turning the tide and you’ll have more extra money to reach your goals with.

Increase Your Income

Another way to put your budget in a better situation and overcome any budget deficits is to increase your income.

Luckily, there are dozens of side hustle ideas that will help you do that. Once you find the right side hustle(s) for you, you can start making more cash and improving your financial situation for the long term.


Monthly household expenses are a part of life. However, if you manage them right you can be sure you’ve got enough money to cover them all and have cash to reach your financial goals as well.

Leave a Reply

Your email address will not be published. Required fields are marked *


  1. You can use the Mint app to keep track of expenses and different accounts. It is very nifty. Without writing down every expense, it tracks it for you with one or multiple accounts and credit cards.

    1. Yes, Mint can be very helpful for budgeting and watching what you spend. 🙂

  2. Josh Patoka says:

    My wife and I sat down last night to make a new budget for the rest of 2018. 🙂

    Besides knowing where every dollar goes, we create sub-accounts in our bank account so we don’t forget to set aside money for our large lump-sum expenses like property tax, insurance, and vacation.

    Being able to visually track our saving progress means we don’t have to scratch our heads and think what payments are still floating but haven’t been withdrawn yet. Overdraft fees sting, and we got sick of paying them because we forgot an expense or two.

    1. For your sub-accounts, do you just track them in a spreadsheet, or does your bank actually allow you to do that on their end somehow?

      1. Josh Patoka says:

        I can check the account balances in real time on the bank website, but we have to track our expenses with our own spreadsheet for each account.

        We mostly do it to categorize our monthly spending and schedule automatic transfers so we don’t forget one month. So on the 1st of each month we might have $200 automatically transferred to a sub-account that pays our property tax and homeowner’s insurance.

  3. I like the principal of the zero-sum budget. But, I also find that slackers have a hard time with it. That being said…knowing where every dollar goes is a great thing! Whether you use a zero-sum budget or an alternative method, it is SO important to have a budget. I’m glad you put the list together and hopefully lots of people listen to this advice!