10 Common Monthly Expenses To Include In Your Budget

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.

Table of contents

Most 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 include 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 consider that when you create a monthly budget.

One good way to prepare for larger costs, such as a new furnace, is to have a special savings account where you put money aside each month, 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 because we need to eat and aren’t near home.

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

3. Childcare

Child-related expenses can include anything related to your child’s care that is not included in your health care expenses, which I recommend tracking separately.

Some ideas include:

Daycare expenses
Extracurricular expenses, such as hockey or dance
New toys that aren’t gifts for a birthday or other holiday

I don’t add health care expenses in this category; we’ll discuss those in another category.

4. Debt

Some people like to divide debt payments into the individual categories they relate to, such as putting their 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

Of course, you can categorize them however you like; just be sure to include them in your monthly expenses when working with a budget.

5. HealthCare

Health care expenses are essential to track because, believe it or not, it’s possible to waste money in 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 recognize where you’re wasting money.

In the case of health care, waste 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 considerable medical expense down the road, such as surgery, the birth of a child, or braces for one of the kids.

If you qualify for a health savings account, it’s a great way to do that, and it offers extra tax advantages.

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 for the future purchase of a new vehicle

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

Trust me: you’ll love 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 like 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 monitor your spending on them to help ensure you can afford their care and upkeep.

9. Entertainment

Entertainment expenses include any 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-necessary expense you have to have fun will go into this category.

Again, especially for vacations, 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 to the “miscellaneous” category.

Now that you know the types of common monthly household expenses, you can create a budget that works for you.

What if I Don’t Have Discretionary Income?

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

In some cases, people find that after creating a budget, 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.

Summary

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

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