The right budget categories turn chaotic spending into clear patterns. Too few categories and you miss important details; too many and tracking becomes overwhelming. Here's how to find the perfect balance for your household.
Why Budget Categories Matter
Categories serve several purposes:
- Visibility: See exactly where money goes
- Control: Set limits on specific spending areas
- Patterns: Identify trends over time
- Decisions: Know where to cut when needed
- Goals: Align spending with priorities
Essential Budget Categories
Most households need these core categories:
Housing
- Rent or mortgage payment
- Council tax
- Home insurance (buildings and contents)
- Home maintenance and repairs
- Household supplies
Utilities
- Electricity
- Gas
- Water
- Internet/broadband
- Mobile phone
- TV licence
Food
- Groceries
- Dining out
- Takeaways and delivery
- Coffee shops (if a significant expense)
- Work lunches
💡 Category Tip
Split categories where you tend to overspend. If "Food" is always over budget, separating "Groceries" from "Dining Out" reveals whether you're buying too much food or eating out too often.
Transport
- Car payment/finance
- Car insurance
- Petrol/fuel
- Parking
- Public transport
- Car maintenance (MOT, servicing, repairs)
- Taxi/Uber
Healthcare
- Prescriptions
- Dental care
- Optician/glasses
- Private health insurance
- Gym/fitness
Personal
- Clothing
- Haircuts and grooming
- Personal care products
- Education/courses
Entertainment
- Streaming services
- Hobbies
- Events and activities
- Books and magazines
- Gaming
Financial
- Savings
- Investments
- Debt repayment
- Life insurance
- Pension contributions
Family (if applicable)
- Childcare
- School expenses
- Children's activities
- Pet expenses
- Child maintenance
Other
- Gifts
- Charity/donations
- Subscriptions
- Miscellaneous
Set Up Your Categories
iBudget helps you create and track custom categories that match your spending patterns.
How Many Categories Do You Need?
The ideal number is 10-15 categories. Here's why:
- Too few (under 8): Too vague to be useful. "Living expenses" tells you nothing.
- Just right (10-15): Detailed enough to spot problems, simple enough to track
- Too many (20+): Tracking becomes a chore, you'll give up
ℹ️ The 80/20 Rule
80% of your spending probably falls into 5-6 categories. Focus detailed tracking there. Lump smaller expenses into broader categories.
Category Strategies for Different Situations
For Couples
Add these categories:
- "Partner 1 Personal" and "Partner 2 Personal" for individual spending
- "Date nights" if you want to protect relationship spending
- "Joint savings goals" separate from individual savings
For Debt Payoff
Create specific debt categories:
- Credit card 1 (minimum + extra)
- Credit card 2
- Car loan
- Student loan
For Saving Goals
Split savings into:
- Emergency fund
- House deposit
- Holiday fund
- Christmas sinking fund
Adjusting Categories Over Time
Your categories should evolve as your life changes:
- Add "Baby expenses" when expecting
- Remove "Rent" when you buy a house, add "Mortgage"
- Merge categories that are consistently under budget
- Split categories where you keep overspending
About iBudget
iBudget helps couples and families take control of their finances with simple, collaborative budgeting tools. Track spending, set goals, and build wealth together.
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