Cash Envelope budgeting categories

The common monthly expenses to list in your budget

Common monthly expenses are bills that reoccurring every month in your budget. A budget is nothing more than a guide to using your money and using it when it works best for you. By making a list of all your monthly expenses and match those expenses that list against your monthly income you could organize your spending in a way that meets your real financial goals.

woman looking at all her expenses on a document. she is placing her hand on her head confused.

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Make a list of expenses before you budget

Before you start the budget you need to account for all the bills you need to pay. There could be expenses that you missed throughout the month that will throw off your entire budget. For example, if you spent more on entertainment purchases, consequently you might not have enough to pay for insurance. Everything needs to balance out, but also you need to know what expenses you have to pay.

Monthly Expenses List:

Some of the most common monthly expenses are rent, food, and transportation however most people forget about the small bills. Generally speaking, every expense that you make should be put into a category along with automated bills. These bills might be small enough to miss but still play an important part in your budget like your cell phone bill.

  1. Housing
  2. Food
  3. Transportation
  4. Childcare and Pet Care
  5. Cell Phone
  6. Health Insurance
  7. Debt
  8. Savings
  9. Entertainment

Sort the expenses into needs and wants

First, you list your expenses then you sort them into Needs and Wants. If you are a beginner budgeter and particularly needs help sorting, try this tip! Start with tracking all your spending for a whole month. Next, at the end of the month review all your spending. Third, take out two different colors of highlighters and color one expense need and the other wants.

While you are highlighting in think with this in mind, “Did I need this?” or “Did I want this?”. This exercise really shows what you are spending your money on more but also puts a name on all your expenses. Finally total up each side in their categories, for example, “Entertainment = Wants = Movie Theater $90” or it could be a need “Entertainment = Need = Salon $90”


The Needs are the type of expenses that are essentials for you to live, work and take care of your family. You might notice that they tend to be larger bills and are reoccurring, for example, housing, transportation, utilities, and car insurance. I’ve also noticed that most of all my needs are fixed expenses, which means the amount hardly changes.


To pick out what expenses are “Wants” that would be anything that’s for fun or leisure. These expenses you could live without them but they help you live more comfortably. Some examples of these would be travel, entertainment, and a coffeehouse visit.

woman with a coffee cup in her hand. she is at her desk on a computer. plans on budgeting

Create a Budget Plan

Decide how you are going to spend your money afterward sort your dollars into sections where you want them. Creating a budget plan to have enough money for all the types of expenses and your savings.

Begin with finding out what your actual income is after taxes. Many people make the mistake to budget what is on their paystub versus what comes afterward. Budget using your actual income, this would be after health insurance, taxes, and 401K. Next, select the type of budget that would best suit your needs. I’ve already written about a few types of budgets, the 50/30/20, The Envelope Budgeting System, and of course the Zero Based Budget.  Lastly, track your spending to make sure that you are aligned with your planned budget. 

How do you calculate monthly expenses?

You can use these types to calculate your monthly budget. If you want to try a monthly budget calculator Nerd wallet has a tool on their site. On Nerd wallet you can use the home income to the budget calculator to figure out how much you should allocate to the 50/30/20 budget.

What is a zero based budget?

A Zero-based budget is the idea of income minus expenses should equal zero.  Every dollar is assigned a place. There’s no money lingering around that could be wasted. If you are a beginner budgeter, in my opinion, a zero-based budget would be best. It’s the most controlled budget as you are starting to learn more about allocating your income.

What if you are not at zero?

Then you need to start trimming. The great thing about sorting the need vs. wants is that you know where to cut.  When it comes to cutting back expenses, look first at the want category.  Try to get your overall budget down to zero the best you can.

Are you still struggling to find a budgeting system that’s best for Paycheck to Paycheck?

I’ve developed a percentage system similar to the 50/30/20 but I’ve allocated is based on variable and fixed expenses. Read more about the Paycheck to Paycheck budget in this article.


The are many common monthly expenses. When you start to the budget you want to make sure that you list all you spend.  Some of your monthly expenses could need or wants. You can determine that by asking yourself if this is an essential expense or not? Calculate your monthly expenses. What do you have more of? Needs expenses? Once you sort all of your expenses now you can create a budget plan. Plan a budget that covers your needs, wants, and savings. Pick out a budgeting system that works for you. You can do 50/30/20 or just a zero-based budget.  Then track all your spending make sure that the budget you planned is working.

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