An expense category is a group of expenses within the budget that helps you gain a better understanding of your spending habits and make informed decisions about your finances.
You can think of it as a way to organize your expenses into different groups. This can help you identify areas where you are overspending and adjust your budget accordingly. While the fewer categories you have, the easier it will be to get insights from your budget, there are a few categories that are “a must”.
Housing: This category includes expenses related to your home, such as rent, mortgage payments, property taxes, and home maintenance costs. Some people add utilities to this category, other don’t. Try and see what’s best for you.
Transportation: This category includes expenses related to getting around, such as car payments, gas, maintenance, parking, tolls, ridesharing costs, and public transit.
Food: This category includes expenses related to groceries, dining out, and other food-related expenses.
Personal/Lifestyle: This category includes expenses related to personal care, entertainment, hobbies, and other lifestyle expenses.
Insurance: This category includes expenses related to insurance premiums, such as home, car, and health insurance.
Debt: This category includes expenses related to paying off debt, such as credit card payments, student loans, and other loans.
Savings and Investment: This category includes expenses related to saving money and investing for the future.
Following the Excel file from the Expense tracking spreadsheet post, our expense tracker/budget would like this:

This Excel file can be downloaded from here. No subscription needed, it is available to download freely 🙂 just right click on the link and select save as.
Featured image by Kelly Sikkema on Unsplash.