Happy with your budget categories? Please share!
I'm curious to know how people organize their budget categories. Thinking of making some changes for 2018 and would love to see what people use (and don't use).
What are your budget categories?
I have not even completed my trial period at this time (although I can say with absolute confidence that I *will* be subscribing) and so my categories have been evolving as I learn more about the tool and the system.
However, I am reasonably happy with how everything has been lining up so far, and while I am sure that my budget will continue to evolve as time goes on (I just read about and like the idea of a "wish farm", for example) I think what I have is workable for at least the present time.
Keep in mind that in my budget ORDER IS IMPORTANT. Groups that are higher up on the list are considered to be higher priority for funding (for whatever reason), and even the categories within a group may follow the same principal.
Using the YNAB philosophy as my core, the basic idea in practice is that money flows from the top down and overspending pulls from the bottom up. My hope is that this will guide me to making better budget decisions, particularly when I am standing at the checkout register and trying to make sure that I have enough budgeted to cover a purchase without running myself short on covering a utility bill or loan payment.
I have also added commentary to provide additional insight and explanation, as appropriate.
And so, without further ado...
To be Budgeted (where new money flows in, and waterfalls down)
Credit Card Payments (in order of descending APR, not alphabetically)
- Care Credit
- PayPal Credit
Loan Payments (in no particular order)
- Home Loan
- Auto Loan
- Student Loan
Scheduled Expenses (these are known expenses with scheduled payments)
- Utilities (each utility bill has its own scheduled payment, with high-water estimates if variable)
- Insurance (auto & life)
- Kids (music lessons, activity fees)
- Entertainment (Sling TV, Netflix, MoviePass, etc.)
Monthly Expenses (these are regular expenses, but unscheduled and/or variable in cost)
- Interest & Fees (credit card interest, online order processing fees, etc.)
- School Lunches
- Auto (gas, tolls, etc.)
- Shopping (catch-all category for everything else I don't want to specifically track)
- Everything else (if it just doesn't quite fit in the "shopping" category...)
Periodic Expenses (occur less frequently, but predictably)
- Auto Maintenance (everything from car washes and oil changes to major repairs)
- Home Maintenance (remodeling, appliance repair, and so on)
- School Enrollment
Entertainment (this is intentionally placed here as a reminder that any overspending in this category MUST take away from something...like the new truck my wife says that she wants ;-) )
- Dining Out
Savings (planned expenses, someday. I may replace this with the "Wish Farm" concept)
- Emergency Fund
- New Vehicle
- New Computer
I have been playing around with using "Goals" as reminders to budget certain amounts of money each month towards the more variable or irregular categories (Monthly & Periodic Expenses) but I am probably going to have to take a bit more time before those really "lock in". What I would like to do is set a goal for each category at the "high water mark" to carry from month to month, then I can simply budget to replace what I actually spend!
However, before I can start working towards that objective I need to make sure that I at least cover any purchases made on credit, and this month I had a rather significant medical bill that I needed to pay so I'm not sure how much I'll be able to put towards that objective this month!
That's it so far, I'm looking forward to seeing what everyone thinks about it!Reply
I just simplified my budget for 2018. I had many main Categories, Entertainment, Automotive, Recreation,...ect. I have no debt or anything complicated to track. However, I spend too much on each category and NEED to see that number in one place. So I basically just made two main categories; my "Base" and dragged and dropped all sub categories of items that are essential every month (gas,groceries, Elec,..). Then one other Main category I called "Household" with everything else. I dragged "Household" category to the top of the Budget list so when I am on my iPhone app I can see the dollar amount immediately for all the misc stuff I do all month (Restaurants, clothing, movies,...ect). Much better for me. I can still dig down to my sub categories for details. I think this will help me focus on my "too much fun" money.Reply
I have a post about this on the old YNAB forums but I discovered that while it seems logical to group categories based on groups like food, house, transportation, etc. This is not really the best way to organize them for the budget scree. I group mine based on what the pattern is of how often the category is used:
- Variable Spending - categories that are always going to be used multiple times a month, e.g. Dining out, Groceries, Gasoline
- Irregular Spending - categories that may or may not be used in a given month, e.g. Gifts, Entertainment, Auto Maintenance, Clothing, Haircuts
- Monthly - Things that typically are paid monthly on the same day every month, ordered by the due date
- Multiple Months - Things that have longer spending patterns, e.g. yearly license plates
This is better for me because the way you budget each type is typically different from the other types. Having a Transportation group doesn't help me because you are lumping together things like Gasoline that you spend multiple times a month, Auto Maintenance which might not be used for months, Plates which are yearly, etc.
This makes the budget screen more logical, but the downside is that you see those groups on the account transactions. Wish there was a way to hide the group in the account registers.Reply
I'm still in my trial period. My categories have changed several times in the past 6 weeks. At first I had my categories grouped almost exactly like we had them in Quicken. However, for budgeting this way makes so much more sense to me. I'm sure they will get adjusted as we get used to YNAB.
Here are my current categories. We get paid bi-weekly and AOM is still under 30 days. Savings Goals has my $1000 EF (we followed Dave Ramsey's way for several years). Monthly bills are in the order due so I know when they need to be funded; they have monthly funding goals. Everyday Expenses get partially funded at the beginning of the month and finished up with the 2nd check. They have monthly funding goals, too.
Dated Sinking Funds are in order by soonest to furthest away (except the first one). These have funding by date goals. Most of the Variable Sinking Funds have goals without dates. Three of the 4 CCs have zero balances & are used very seldom. The 4th one is our gasoline card that gets PIF each month.
Payroll Withholding is self explanatory. We budget from gross, not take-home for personal reasons. Our Wish Farm doesn't have anything yet, and our Wish List is still very small. The hidden categories are payroll things from a job that is over.Reply
I've loved reading this thread, it's interesting to hear how people arrange their finances.
My large categories are:
- Mortgage and Maintenance (fixed costs)
- Car (loan and insurance, it's an EV so no gas charges)
- Household Bills (almost all fixed except electricity, so mobile, internet, subscriptions)
- Living Expenses (variable costs but recurring, so groceries, household consumables, food I buy at work and coffees/snacks)
- Vacation and Activities (pretty much quality of life things, going away, paid activities like races or experiences etc)
- Occasional Expenses (gifts including charitable, clothing, personal care, medical, gadgets, white-goods)
- Savings Goals (effectively my savings balances or specific savings goals)
The philosophy behind it is literally from those things I must pay, to should pay, to could pay to would pay in order of priority.Reply
I was eager to read this. I'm still pretty new to YNAB (about a year) and I've found the True expenses method too difficult as a way of planning for every annual expense (I've come up with 20 so far). I figure I have about $2400 in these, so I just budget $200 per month which automatically gets transferred to a savings (tracking) account. Then I move the money back in each month as they come up so I have a net zero category for "True Expenses" that looks like what's shown below (screengrab only goes through Aug, but there's more). I have an identical system for travel- $500 per month goes into savings, can't book travel until there's enough money in that account, just move money in when that happens. The savings categories are musts because those transactions are on autopay. Come at me with why this is wrong, I'm interested!Reply
So I figured this would be the best place to ask, and I apologize if this has already been discussed (I'm working through the responses but there are a lot): how do you guys handle "clothing"? As a true expense, or as a line item, or as part of spending?
I tried to break out clothing as its own line item but at this point in my life, I don't really need to buy anything? And when I do it's usually a spur of the moment "this sale is great" kind of thing, so I just tend to classify it under the "Spending" category. If I desperately want a particular item of clothing (which is very, very rare) I would probably just wish farm it, honestly.
For reference, this is how my True Expenses/Fun Money categories look right now.Reply
Here are mine:
Food: Groceries, Restaurants
Savings: Freedom Fund, College (for my son), Vacation, Gifts, Computer/Software, Gadgets, Christmas, IRA, Charity, Stupid Tax, Car Replacement, Emergency Fund, Buffer
Housing: Mortgage, Property Tax, Homeowner's Insurance, Maintenance & Repairs, Alarm Monitoring, House Cleaning, Appliances, Remodeling, Other
Auto: Gas, Repairs & Maintenance, Insurance, Registration, AAA
Utilities: Gas & Electricity, Phone, Internet, Satellite TV, Water & Trash
Personal: Doctor/Dentist, Prescriptions/Medicine, Haircut, Drinking Water, Boys, Clothing, Alimony, Self Improvement, Miscellaneous
Recreation: Entertainment, Music, Games, Poker
Pets: Vet, Grooming, License Fees, MiscReply
Here's mine after 4 months of use. I'm thinking some one be sub optimal, still a work in progress:
- Life Insurance
- Software Sub
- Dental (braces payment)
- His Gas
- Her Gas
- Weekend Food
- Weekday Food
- Laundry, Pets, Cleaning Supplies
- Giving Church
- Fun Money
- Work Expenses
- Tax Prep
- Auto Plates
- Auto Insurance
- Auto Maintenance
- Home Maintenance
- Medical Rx
- Quality of Life Goals:
- Giving OTCO
- College for Children
- Education (Homeschool Materials)
- Christmas Gifts
- Dining Out
- Where PYFS and Fortnightly meet:
- Mortgage payment
- Fortnightly expenses
Here's some explanation:
Monthly are monthly bills (except water). Water funds are used for the water softener salt, not really a bill, I just buy it as needed. I budget these categories into future months (except Rent/Mortgage, see later on). These have monthly funding goals.
Annual/Quarterly/Irregular are the True Expenses. I know these are coming, but either once a year or something else that's more than monthly. I budget these categories into future months. These have monthly funding goals.
Quality of Life Goals: A bit of a mixed bag. In timing these are similar to the annual group. However, they are more wants than needs. I want to save up for passports or college for children, but if I can't then I just can't. I budget these into the future, but if money gets tight, then this is the group that goes without funds first. Please keep in mind everyone's situation/context is different. For example, you might ask, why is Education (Homeschool Materials) a category that is going to go without money, isn't that a True Expenses to buy books every year!?! Don't you care about your children's education? Yes, it was a True Expense until older sibling graduated and younger sibling now has all the material (books, teacher guides, software, videos, science kits) needed to graduate. Now the category just covers unexpected pop-up needs, maybe tickets to the zoo for a field trip or something like that. These have ether target category balance by date or monthly funding goals or target category balance. It just depends on the category.
Fortnightly and Where PYFS and Fortnightly meet: Call it a crutch, a hack, or brilliant, whatever you want, but my reality is having all of these types of expenses (food, gas, cleaning) for the month sitting in one category didn't work. The money was spent too fast. The first attempt was making categories for each week (Food Week 1, Food Week 2, etc.) but while it worked well on the spending side, it was too much time in the budget moving money to and from (maybe I had a day off work week 1 and didn't use as much gas, then I'd have to move that to week 2). Also, not all months have 4 weeks exactly/cleanly (month ends mid week, YNAB rolls over at the end of the month), so that was another thing to remember and track, too much admin time. Enter compromise (thanks to those in the UK sharing their thoughts): All the accounts in Fortnightly are funded just like it says. The goals on them are target category balance. I do not fund these specific categories into future months. You might say, whoa! That's paycheck to paycheck thinking. Before we get to that and you vote me off the island, the categories work well. If I don't use as much gas this fortnight, say $10 left in the category, and the next fortnight comes around, when I budget using the target balance it takes the $10 into account. I'm not moving money around. If the fortnight starts in one month and ends in the next, the balances roll over (they are either positive or zero, I take of negatives immediately). Again, saving admin time. The only thing I need to track is when to move money into those accounts, which is once every fortnight, easy calendar rule in outlook or google. Now for following the rules, I have a category group 'Where PYFS and Fortnightly meet' with a category Fortnightly expenses that has a target category balance equal to 4 weeks of Fortnightly expenses. That category is budgeted into the future. In fact, it's fully budgeted for this month and next month. I'm planning (although the creek may rise, etc.) to use my next paycheck this month to fund that category for May, which will be one of the last few categories I need to cover all of for May. All that to say, I am paying my future self, but I needed to meter out the monies in smaller buckets. (Ah, buckets of monies...) The size of the category might need tweaked when a 5 week month comes around, but it might keep working as is.
Mortgage payment might be the last one to leaving you wondering. This one could be sub-optimized, probably too long to explain (I will explain if asked, no worries there), but similar mechanics as Fortnightly expenses. It is getting budgeted into the future months in a separate category from Rent/Mortgage.
Ask away if you have any questions of suggestions.
I've been reading closely the threads on how far ahead to budget. It seems like many users create a single category to hold money vs. budgeting into the future for 5 months or 6 months.Reply
I have combined BFI's (Barefoot Investor - Aussie finance guy) method with YNAB. So my master categories are set up according to his strategies:
1. 60% for daily expenses. By daily expenses, he doesn't means occurring on a daily frequency, but just day to day expenses. Mortgage, bills, insurance, car, groceries, etc. Lot of things in this master category.
2. 20% Fire extinguisher. So this is for debt reduction, emergency fund, mojo fund (his version of a $2k emergency fund) and then eventually, paying down mortgage and then investing for retirement.
3. 10% Smile - Medium term saving - vacations, house renovations
4. 10% Splurge - I only have 2 categories here - fun money and eating out/take-away. This is also the category I tend to use to top of the daily expenses master category if needed.Reply
Here is mine after 7 years with YNAB. I have it boiled down to what works well for us. I also have several tracking accounts for my investment account and my wifes 401K . I also track our homes worth and what is owed using tracking accounts.
Float Account (I use this as a reimbursement account for Company expenses that are reimbursed.)
Category Computer Services
Apple backup software
Amazon Prime Membership
Supplies ( I use this for sundries. IE; TP-Toothpaste etc.)
Yard-House-Hot Tub Maintenance
Prescriptions and Doctors
Gift and Misc
Clothing and Shoes
Better Half Haircut
Vanguard Investments (This is auto deposit to my investment account.)
Excess of Budget (I sometimes get more than I think so the excess goes here until I decide where to move it.)
Saved Tax Money 2019
Category Transportation and Auto Insurance
Auto Insurance and Umbrella
Repairs and Maintenance
AT&T Cell phones
City Of BL Water and Sewer
City of BL Alarm Fees
Puget Sound Energy
Waste Connections DM DisposalReply
For me, the important thing is the questions I want answered about my finances, not the categories directly. By starting with the question (the top level category), every subcategory is designed to provide the answer at the level of detail I need. Running a report is now very meaningful, as the fundamental questions that give me insight are front and centre, and I can drill into the detail easily.
I want to know how much I am spending to:
- eat and drink
- run our cars
- run our house
- run our cottage
- access internet and cell phones
- get personal items we need
- do the sports, recreation, and entertainment we enjoy
- keep our pets
- go on trips and vacations
- managage medical issues
- manage business expenses
- manage finances and loans
These questions are mostly independent from each other, however there is definitely some overlap that simply needs a decision of what I care about. For example, the internet could be considered part of the house expenses, but since it is always changing and is tied to the cell phones, I like to know about those expenses explicitly so I can keep a closer handle on them.
The categories and subcategories representing these questions are:
Food (groceries, restaurants, licquor)
Transportation (gas, car insurance, maintenance, parking, licenses)
Communications (internet, cell phones)
Housing (house tax, hydro, water, insurance, natural gas, house maintenance & supplies, lawn care)
- note that when we sell the house and move to the cottage, this is the set of expenses that disappear
Cottage (cottage tax, hydro, insurance, boat gas, propane)
Personal Items (cash-Pocket Money, clothing and shoes, hair, gifts, subscriptions)
Recreation (entertainment, skiing, photography, scuba diving, etc)
Pets (Dog food, dog supplies, veterinarian)
Travel and Vacation (Small trips, Ski trip 2019, Camping 2019, etc)
- I have a general ongoing category (small trips) for routine things, but a specific category to track major vacations.
- I find it really helpful to run a report on the category of a previous year's ski trip so I know how much to budget this year.
Medical (Dentist, drugs, glasses, etc)
Business (categories for various business expenses)
Financial (bank fees, bank income, visa points refund, investment dividends)
Loans (Car loan, Loan to child, etc)Reply
I'm still new to ynab so these probably still need to be tweaked so any feedback is appreciated. I am not a fan of ynab's default structure in fact I hate it so I completely redid the category groups too. I noticed others on here using emojis so I had some fun and added them to mine too.
I also try to keep it simple, such as having one category for all my utilities and another for all my subscriptions. To me Netflix is a payee not a category and if I want to know how much electricity is costing me well I can easily track that by payee and if not by memo field. If a category has only one payee I reconsider if I could get by with combining it, some like rent I don't because it is a large regular payment that it makes sense to budget separately. Others like utilities are smaller and easy to combine without problems. Tithing I am still unsure of, currently I have that bundled into my planned giving category but maybe like rent it should be separate even though it will only ever have 1 payee.
I am also toying with the idea of moving groceries to a food master category with additional categories for frest fruits and veggies from the local farmers market and another for saving up for bulk meat purchases at a local butcher shop.
The order isn't based on importance or timing but to put certain categories in easy reach on the mobile app.
Rest & Relaxation ⏳
Dining Out 🍔
Tech Toys 💻
Fun Money 🎢
Books & Education 📚
Phone Buyout 📱
Banking Fees & Interest 🏦
Car Payment 🚗
Gas & Oil ⛽
Auto Maintenance 🧰
Fees & Fines👮♂️
Household Expenses 🧻
Planned Chairitible ✒
Unplanned Chairitible 🤲
Birthdays & Christmas 🎉
Savings Goals 💰
Emergency Fund 🧯
Car Replacement 🚘
Down Payment 🏡
Credit Card Payments
Credit Union Visa
Capital One Mastercard
Citi Double Cash
Posted in my journal a little bit ago.
Not all are actively funded or used very often, but this keeps me fairly organized.
Account Minimums to Keep
- Ally Savings
- CapOne Checking
- CapOne Savings
- TFCU Checking
- TFCU Savings
- ST Checking
- ST Savings
- Auto Loan
- Student Loan
- Misc One Time Projects
- Project Fundings
- Cell Phone
- Funding Subscriptions
- Giving - Monthly
- Streaming/Entertainment - Monthly
- Subscription Boxes
- Voip Services - Monthly
- VPS Hosting
- Auto Registration
- Auto Insurance
- Domain Registrations
- Mail Services
- Software Subscriptions
- Streaming Services
- Backup Services
- VOIP Services
- Auto Maintenance
- Personal Care
- Purchases for Others
- Stuff I Forgot to Budget For
Quality of Life Goals
- Family Trips
Just for Fun
- Dining Out
- Fun MoneyReply
Here what I came up with.
Fixed Expenses - Monthly - this group is for expenses that occur monthly and the amounts are fixed
Variable Expenses - Monthly - this group is for expenses that occur monthly and the amounts are NOT fixed
Fixed Expenses - Periodic - this group is for expenses that occur quarterly/yearly/bi-weekly/etc. and the amounts are fixed
Variable Expenses - Periodic - this group is for expenses that occur quarterly/yearly/bi-weekly/etc. and the amounts are NOT fixed
Savings - various savings funds
Reimbursements - money I may loan out to others
I also use emoji's to indicate categories that can be sweeped at the end of the month (all my monthly expenses). All the categories in my monthly groupings can be sweeped to it's easy for me select and sweep them all at the end of the month.Reply