A solid budget can help you take control of your spending \u2014 making sure you have enough to pay your bills, grow your savings, and enjoy life along the way. <\/p>\n\n\n\n
The first step is to set up your budget categories so you can see where your money is going. <\/p>\n\n\n\n
This guide runs through 10 essential categories found in most household budgets, including how much the average household spends on each one.<\/p>\n\n\n\n
See how Quicken helps you stay on budget. All monthly budgets start with your take-home pay \u2014 the money you bring home from your paycheck after taxes, retirement savings, and other deductions are taken out. <\/p>\n\n\n\n According to the US Bureau of Labor, the average American salary is $53,490 per year, but that\u2019s before taxes. <\/p>\n\n\n\n After federal and state income taxes, that leaves about $42,768 \u2014 or $3,564 per month.<\/p>\n\n\n\n If you live in a state that doesn\u2019t have any income tax, you\u2019ll have a bit more to work with, but we\u2019ll use $3,564 as our monthly average.<\/p>\n\n\n\n This first list of budget categories covers the essentials, like housing, food, and clothing. The recommended amounts are based on our average budget of $3,564 per month. <\/p>\n\n\n\n Adjust those numbers up or down to fit your actual take-home pay and your unique situation. <\/p>\n\n\n\n Amount per month: <\/strong>$891 to $1,247<\/p>\n\n\n\n Housing covers the money you pay to keep a roof over your head. This includes everything from rent or mortgage payments to property taxes, HOA dues, and home maintenance costs. <\/p>\n\n\n\n For most budgeters, this category is by far the biggest. <\/p>\n\n\n\n Amount per month: <\/strong>$356 to $535<\/p>\n\n\n\n Regardless of your location or lifestyle, everyone needs to get from point A to point B. Typically, this budget category includes car payments, registration and DMV fees, gas, maintenance, parking, tolls, ridesharing costs, and public transit. <\/p>\n\n\n\n If you don\u2019t need a car, you\u2019ll save a lot of money here that you can use somewhere else instead.<\/p>\n\n\n\n Amount per month: <\/strong>$356 to $535<\/p>\n\n\n\n Shopping and cooking at home? Sampling local restaurants? Either way, we all have to eat. Many budgeters include both groceries and dining out in this category (e.g., restaurant meals, work lunches, food delivery, etc.) <\/p>\n\n\n\n To stretch your food budget further, try moving some of your non-essential food expenses (like gourmet coffee or celebration dinners) into one of the non-essential categories below.<\/p>\n\n\n\n Amount per month: <\/strong>$178 to $356<\/p>\n\n\n\n This category covers the services that keep your home up and running \u2014 things like gas, electricity, water, and sewage bills. Some families also include \u201cconnectivity\u201d services, like internet and cell phone bills.<\/p>\n\n\n\n When you\u2019re setting your budget, remember that the costs of heating and air conditioning often change from month to month. A home in Syracuse, NY, will have a bigger heating bill in the winter than one in Austin, TX, but that same home will pay less in the summer. <\/p>\n\n\n\n Amount per month: <\/strong>$356 to $891<\/p>\n\n\n\n Some budgeters like to include insurance with the thing they\u2019re insuring. So auto insurance would fall under Transportation, and homeowner\u2019s insurance would be included in Housing. <\/p>\n\n\n\n Both systems are perfectly valid. Do whatever helps you feel most organized.<\/p>\n\n\n\n If you list insurance as its own category, this could include:<\/p>\n\n\n\n Amount per month: <\/strong>$178 to $356<\/p>\n\n\n\n \u201cHealth is wealth,\u201d so be sure to include enough in your budget to cover these costs. If you plan for essential medical care such as yearly physicals and dental appointments, you\u2019re much more likely to live a long, healthy life.<\/p>\n\n\n\n As you build your medical and healthcare budget, think about:<\/p>\n\n\n\n If you don\u2019t have a separate budget category for insurance, remember to include any health insurance premiums that you pay out of your own pocket.<\/p>\n\n\n\n Amount per month: <\/strong>$356 to $713<\/p>\n\n\n\n This often-overlooked home budget category is one of the most important \u2014 including it can really set you up for financial health down the road. <\/p>\n\n\n\n Start by using it to pay off any high-interest debt you\u2019re carrying, such as credit card bills or even personal loans and student loans.<\/p>\n\n\n\n Once you\u2019re free of any high-interest debt, you\u2019ll want to build an emergency fund<\/a> that\u2019s earmarked for unexpected disasters, as well as saving in a retirement account<\/a> such as a 401(k) or IRA. <\/p>\n\n\n\n If you\u2019re saving a full 20 percent of your income and you aren\u2019t making a significant dent in your debt, try cutting back in other areas, starting with your non-essential spending categories.<\/p>\n\n\n\n See how Quicken helps you save more money. Once you\u2019ve budgeted for your essential needs, the money you have left can go toward the non-essentials \u2014 like entertainment.<\/p>\n\n\n\n Non-essential expenses tend to vary from month to month, depending on your spending habits. <\/p>\n\n\n\n They\u2019re also the easiest expenses to cut back on, at least for a while \u2014 especially if you want to pay down debt or build your savings more quickly. <\/p>\n\n\n\n Amount per month: <\/strong>$178 to $356<\/p>\n\n\n\n This category is a catch-all for things like: <\/p>\n\n\n\n You might consider some of these to be essential, and that\u2019s perfectly fine. The point isn\u2019t to tell you how to spend your money. The idea is that anything in this list could be canceled if it had to be \u2014 in case of a real emergency.<\/p>\n\n\n\n Amount per month: <\/strong>$178 to $356<\/p>\n\n\n\n For most of us, carving out some time for fun \u2014 and the money to afford it \u2014 is essential to maintaining a healthy work-life balance. <\/p>\n\n\n\n A good budget helps you spend your money where it matters most to you. So enjoy it however you want to \u2014 you\u2019ve earned it!<\/p>\n\n\n\n This budget category can include things like:<\/p>\n\n\n\n Amount per month: <\/strong>$178 to $356<\/p>\n\n\n\n This category is reserved for anything that isn\u2019t covered in the rest of your budget categories. It can also be used as an \u201coverflow\u201d category when you need a little extra somewhere else.<\/p>\n\n\n\n For example, if you have a larger family, you probably spend substantial amounts on clothes and haircuts for your kids. If you\u2019ve maxed out your personal spending for the month and you find a jacket you love, you could account for it under Miscellaneous. <\/p>\n\n\n\n Remember, these categories are just a starting point. Tweak your budget as much as you need to until it fits your needs.<\/p>\n\n\n\n If you want to explore other categories, try these 20 average monthly expenses.<\/a><\/p>\n\n\n\n If you\u2019re struggling to cover your financial bases, you\u2019re not alone \u2014 making ends meet can be tough. Start by cutting back on non-essentials wherever you can, and don\u2019t forget to explore other ways to make money<\/a>.<\/p>\n\n\n\n Remember to pay off high-interest debt wherever you can \u2014 high credit card balances can really squeeze your budget. Slowly but surely, smart budgeting pays off. <\/p>\n\n\n\n If building a household budget sounds like a lot of work, you\u2019re not wrong \u2014 especially since you have to keep up with your spending every day. <\/p>\n\n\n\n
\n Get started \u2192<\/a><\/p>\n<\/div>\n\n\n\n\nTop 10 budget categories<\/strong><\/h2>\n\n\n\n
The essential budget categories<\/strong><\/h3>\n\n\n\n
1. Housing (25-35 percent)<\/strong><\/h4>\n\n\n\n
2. Transportation (10-15 percent)<\/strong><\/h4>\n\n\n\n
3. Food (10-15 percent)<\/strong><\/h4>\n\n\n\n
4. Utilities (5-10 percent)<\/strong><\/h4>\n\n\n\n
5. Insurance (10-25 percent)<\/strong><\/h4>\n\n\n\n
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6. Medical & Healthcare (5-10 percent)<\/strong><\/h4>\n\n\n\n
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7. Saving, Investing, & Debt Payments (10-20 percent)<\/strong><\/h4>\n\n\n\n
\n Get started \u2192<\/a><\/p>\n<\/div>\nThe non-essential budget categories<\/strong><\/h3>\n\n\n\n
8. Personal Spending (5-10 percent)<\/strong><\/h4>\n\n\n\n
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9. Recreation & Entertainment (5-10 percent)<\/strong><\/h4>\n\n\n\n
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10. Miscellaneous (5-10 percent)<\/strong><\/h4>\n\n\n\n
Having a hard time making ends meet?<\/strong><\/h3>\n\n\n\n
Your budget categories & percentages: Putting it all together<\/strong><\/h2>\n\n\n\n