Friday, January 31, 2020

Personal Budget Categories to Consider when You Start Your Budgeting Journey + 4 Simple Steps to Follow

Budget categories to consider when setting financial goals, inspired by Dave Ramsey's baby steps and envelope system.

When evaluating this space over the past year, I came across my post about 3 ways to face debt and was inspired all over again. Josh & I truly believe in budgeting, and even though we do it so imperfectly, the fact that we do it has saved us from fights & big financial mistakes. Or at least they've been kept to a minimum.

Once we made the decision to get everything down on paper, to actually be grown-ups and look at our reality, it became very clear we had to make a plan. We started by sticking very closely to Dave Ramsey, who we still follow, but we've branched off here and there to meet our needs and honestly, to stay sane.

We knew we needed a budget. We started with Dave's pre-made budget form categories & customized them along the way. At the beginning of this journey, it can be so overwhelming thinking about all the things to consider. I remember just needing direction & inspiration. That's where this list comes in. If it's been a while since you've budgeted or you never have, scrolling through all of these categories should help you form your first budget. Plus, these 4 simple steps will get you on your budgeting way!

Here's what I suggest simply because it worked for us:

Outline your budget
Outline your budget with the categories that pertain to you (scroll down for an exhaustive list to work from). You can use pen/pencil & paper, download our form (be sure to check "fit to printable area" when printing), use an app like EveryDollar or Mint, or do a simple google search. There are so many FREE resources on the web to help in this area of budgeting. The biggest goal is to get your numbers on paper. You can always try different tracking methods in the future. My husband now uses a very detailed Excel spreadsheet.

Assign dollar amounts to each category
Once you've outlined your budget with various categories, assign a dollar amount to each one. First, fill in dollar amounts that don't change, like rent, car insurance, etc. and be sure to write your income in. I suggest checking your bank statements from the previous few months (you can do this online- most banks have an app for your phone as well) to see approximately how much you've spent on categories that aren't set in stone, like groceries, eating out, clothing, etc.

Zero out your budget
After every category has a dollar amount assigned, you want to make sure you're at zero dollars to keep from frivolously spending any "extra" money you have. Let's say you have $125 dollars leftover, you assign it to something. Maybe you throw it in savings for a rainy day or you buy that outfit you've had your eye on. Regardless of where you designate the money to go, just be the boss and tell it where to go.  This will ensure you don't just throw it away.

Revisit your budget
Lastly, make a plan to revisit your budget multiple times throughout the month. Post it on your fridge, set reminders on your phone, ask a friend to hold you accountable...Whatever you do, don't just leave the budget & never look at it. Our monthly budgets are our financial guide maps. We need to constantly be making sure we're on the right path, & when we veer off, we know how to get back.

Before you start, consider these...Consider these personal budget categories to reach your financial goals and start your first budget.

Now, sit down and get everything down on paper or in an app or whatever. You won't get anywhere unless you start. 

Where are you on your budgeting journey? Can you think of a category I'm missing? Thanks for stopping by, I truly appreciate it. If you use our form or any of this information, I'd love feedback. Thanks for spending part of your day here.

Not sure you're ready to start budgeting? No worries! Pin this for later, just in case. Also, the budget form & the list of budget categories.

Start you budget with these 4 simple steps to financial freedom


  1. Having a budget with categories helped me balance and understand my spending habits. It's probably the best thing a young adult can do to understand finances.

    1. Yes!!!! When we first started budgeting and I wanted an entire category for Starbucks, I knew I probably needed to get some things in check. Ha!

  2. Budgeting is something that I have never taken seriously. Your post inspires me to take steps in this direction. Thank you.

    1. Hina, that's wonderful! I'm open ears if you need any help or encouragement. Just remember, there is no one right way to do it.