Example Of A Budget To Help You Make Your Own

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A budget is a great way to give you the freedom to spend your money as you want to. In this example of a budget, you can learn how to create a budget that suits your lifestyle.

Every person’s income, lifestyle, needs and wants are different. By using the chart and information below, you can design a budget that helps you maximize your income and reach your financial goals. 

Why Is A Budget Important? 

Without a budget, it’s easy to waste your money away in what I call the “black hole of spending.”

Truthfully, I used to view budgets as a bit of a ball and chain. However, I was also broke. Why?

Because, as Benjamin Franklin once said, “If you fail to plan, you are planning to fail!” 

When I first decided to start using a budget, I wrote down estimates of what I thought I spent in budget areas. 

However, when I actually started budgeting, I realized that my estimates were way off. For instance:

  • My estimated $600 a month grocery expense was in reality $900 a month
  • My estimated $300 a month in gasoline expenses was $450 a month
  • My estimated $150 a month in restaurant expenses was actually $300 a month

This is what I mean about the “black hole of spending.” I was nickel and diming myself into a whole other budget level than I realized, just with random stops at fast food drive thrus, unplanned grocery runs and miscellaneous big box store purchases. 

When I finally started using a budget, I found I was able to stop living paycheck to paycheck. I also learned I could delegate my money away from extra fast food runs to more important long term savings goals that I had. 

If you find yourself continuously wondering where your money goes each month, using a budget can help you answer that question.

Example Of A Budget 

The table here gives you an idea of what a budget might look like. This budget is based on an annual post-tax budget of just over $54,000. 

Below the table, you’ll find a more comprehensive explanation of what each budget line item might include.

Expense TitleMonthly Cost
Rent or Mortgage Payment$1,000
Home Expenses$50
Homeowners Insurance$75
Home Repairs$75
Utility Bills$200
Internet and Phone Expenses$150
Car Repairs$50
Car Insurance$100
Vehicle Replacement Fund$100
Transportation Expenses$150
Health and Beauty Items$50
Health Insurance$80
Pet Expenses$75
Emergency Fund Savings$100
Fun Money$100
Holidays and Vacations$70
Debt Payments$100

Rent or Mortgage Payment

Whether you’re a homeowner or a renter, you likely have some type of regular, monthly housing expense. 

That expense might be higher or lower than what we’ve listed here, depending on the area you live in.

Searching for ways to lower that monthly number? Check out this article on house hacking

Home Expenses

It’s helpful to have a separate savings account or envelope fund set aside for home expenses. Home expenses are different than home repairs and include items such as:

  • Home decor items
  • Furniture
  • Home-related tools and gadgets
  • Linens

And more. By putting aside a bit of money each month for home expenses, you can pay cash for these items when the need arises.

Homeowners Insurance

Homeowners insurance is a required expense if you have a mortgage on your home. And it’s often a good idea to have it even if your home mortgage is paid off. 

The premium you’ll pay on the insurance varies based on the amount and type of coverage you choose. Check out the best homeowners insurance companies to save money in this area. 

Home Repairs

Home repairs are different from the home expenses we talked about above. Home repairs are often bigger ticket items such as windows, a roof or a new furnace. 

As mentioned above with home expenses, these types of occasional expenses that you don’t need to spend on every month can be difficult to budget for. 

That’s why it can be helpful to have a cash envelope system to put aside budget money each month. 

Utility Bills

Utility bill costs will vary based on your living situation. You may have electric bills, a water bill, a trash bill or other heating and cooling costs such as propane.

A good way to discover your monthly need for utility bills is to keep track of all utility costs for 12 months, and then average out the monthly cost.

Put any extra budget money from your average into a separate envelope or bank account so that you have the money there when more costly months arrive. 

Internet and Phone Expenses

Most households need an internet connection service and phone expenses, whether that includes a landline, cell phone or both. 

Be sure to shop around for cheap wifi services to get the best deal for your internet and cell phone needs. 

Car Repairs

Car repairs are a necessary part of vehicle ownership. In addition, car repairs can add up quickly. 

Put aside a bit of cash each month to cover both inexpensive and costly car repairs. 

Car Insurance

Car insurance is a requirement for every car owner. However, knowing how to shop for car insurance is important. 

Auto insurance rates can vary widely from company to company. For example, when I was shopping for car insurance a few years back, I saved over $400 per year by switching companies. 

Do your due diligence and shop around for car insurance at least once every year or two. 

Vehicle Replacement Fund

If you do own a vehicle, it’s a certain bet that the vehicle will eventually need to be replaced. 

Create a budget category for a vehicle replacement fund so you’ll have the cash to get that replacement vehicle when the need arises. 

Transportation Expenses

Transportation expenses can include gasoline and tolls for your car, money for public transportation, parking expenses, and more. 

Keep track of your transportation expenses for one month to get an idea of how much money you need to budget for this category. 


Nearly everyone is feeling the pinch in their pocketbook as grocery prices continue to rise. However, there are many ways to save money on groceries.

You can start by creating a weekly menu plan in order to go grocery shopping with purpose. Save even more money by using a grocery shopping app such as Ibotta

Health and Beauty Items

Health and beauty items also vary in cost each month. You can include items in this category such as toilet paper, makeup, salon expenses and more. 

Put any leftover money from one month’s line item in this area in an envelope to cover more expensive months. 

Health Insurance

Health insurance costs money, whether you get it through work or through an independent company. 

Thankfully, this budget line item is usually the same each month. 


When you’re deciding how many deductions you should claim on your W-4 form for work, try and choose a number that ensures your end-of-the-year refund/tax payment due is as close to zero as possible.

This will help you budget with an accurate income number and avoid having to pay taxes at the end of the year. 

Pet Expenses

Since pet expenses vary like many other budget categories do, you’ll want to set a base amount and then put any leftover money into a separate envelope or account. 

Then, take from the leftovers when you have higher costs, such as annual vet bills. 


Gifts are usually a variable budget category too, as you never know how many wedding, baby and other gifts you’ll have during the year. 

Use the envelope system to ensure you’ve got enough set aside for gifts. Adjust the amount in the category as you get a better idea of how much you spend on gifts. 


It’s helpful to set a specific amount to spend on entertainment each month, such as movies, concerts and restaurant meals. 

Stick within the amount you set, and put any leftover funds into its own envelope. If you find yourself consistently going over your set spending amount, raise the amount or reign in your spending. 

Emergency Fund Savings

Almost everyone needs an emergency fund. Choose an amount of money each month to put in a separate savings account.

Be sure that money is targeted specifically for unexpected emergencies such as sudden job layoffs or other unexpected expenses.

Expenses such as home or auto repairs should be handled in their own accounts, because you know they’re coming eventually. Read this article to learn if you really need an emergency fund

Fun Money

Fun money is another important budget category. Use this money for that occasional (or not so occasional) latte, that shirt that finally went on sale or a fun day out by yourself. 

This is your “no apologies” spending fund. 

Holidays and Vacations

Holiday and vacation travel costs money. Plan in advance for these expenses by estimating travel expenses for the upcoming year and dividing the cost by 12. 


Giving money to your favorite charity can be a great way to help someone in need and to learn to not have such a tight hold on your money.

Give each month to preplanned charities if you wish, and put a little aside for unexpected giving opportunities. 


Childcare expenses can be a hefty percentage of a budget and don’t usually come cheap. Plan accordingly for this often non-negotiable expense. 


Setting aside some money each month for clothing is a great way to ensure you always have money for clothing needs. 

Put any extra cash each month into an envelope so it’s there when you need it.


Subscriptions such as cable TV and cable TV alternatives, gym memberships and other monthly subscriptions are often best handled as their own separate budget category. 

Check out our Trim review if you want to learn how to effortlessly save money on subscriptions. 

Debt Payments

If you have debt, create a budget category specifically designated to help you pay off your debt faster

Being debt-free can give you a lot of extra money to help you reduce stress and reach your financial goals. 


Creating a budget of your own can help make life simpler, easier and more financially secure. Check out some popular budget apps to help make the process even smoother. 

Always remember that budgets need to be customized in order to work best. You do you!