21 Monthly Expenses That Should Be In Every Budget

Creating a budget is crucial in managing your finances, but it’s easy to overlook some critical expenses. While most people remember to account for big costs like rent or mortgage payments, many smaller monthly expenses can add up quickly. Failing to include these in your budget can lead to financial stress and make it harder to reach your money goals.

In this blog, I’ll outline 21 monthly expenses that should be included in your budget.

Rent or Mortgage

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This is often the biggest monthly expense for most people. It’s the cost of having a roof over your head. If you own a home, this includes your mortgage payment. For renters, it’s the monthly rent you pay to your landlord. It’s essential to keep this cost at a level you can afford to avoid financial stress.

Utilities

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Utilities are the services that keep your home running smoothly. This includes electricity, water, gas, and sometimes trash collection. The cost can change from month to month, especially with seasons. In summer, you might use more electricity for air conditioning. In winter, your heating costs might go up. It’s wise to budget a bit extra for these fluctuations.

Groceries

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Everyone needs to eat, so groceries are a must in any budget. This covers all the food and drinks you buy to consume at home. It’s a flexible expense, meaning you have some control over how much you spend. You can save money by planning meals, using coupons, and buying in bulk when it makes sense. Remember to separate this from dining out, which is a different category.

Transportation

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Getting around costs money, whether you drive, take public transit, or use ride-sharing services. If you own a car, this category includes gas, parking fees, and tolls. For public transit users, it covers bus or train fares. Don’t forget to factor in occasional taxi or ride-share trips. Some people might also include car payments here, but that could be a separate line item if it’s a significant expense.

Insurance

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Insurance is a safety net that protects you financially. This category can include several types of insurance: health, car, home or renters, and life insurance. Health insurance is often the most expensive, but it’s crucial for avoiding huge medical bills. Car insurance is required if you own a vehicle. Renters or homeowners insurance protects your belongings. Life insurance provides for your loved ones if something happens to you.

Debt Payments

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Many people have some form of debt, like credit card balances, student loans, or personal loans. It’s crucial to include these payments in your budget. Paying at least the minimum amount each month keeps you in good standing and avoids late fees. If possible, try to pay more than the minimum on high-interest debts like credit cards. This will help you get out of debt faster and save money on interest in the long run.

Savings

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Saving money might not feel like an expense, but it’s important to treat it like one. Set aside a portion of your income each month for savings. This could be for an emergency fund, future big purchases, or retirement. Even small amounts add up over time. If you struggle to save, try setting up automatic transfers to a savings account. This way, you “pay yourself first” before you have a chance to spend the money on other things.

Phone and Internet

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In today’s connected world, phone and internet services are practically essential. This category covers your cell phone plan and home internet service. Some people might also include streaming services here, like Netflix or Spotify. Shop around for the best deals, but be careful not to skimp on quality.

Healthcare

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Beyond insurance premiums, there are other healthcare costs to consider. This includes copays for doctor visits, prescription medications, and over-the-counter drugs. Don’t forget about dental and vision care, which often aren’t fully covered by health insurance. It’s wise to set aside some money each month for these expenses, even if you don’t use it all right away. That way, you’re prepared when medical needs arise.

Personal Care

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Looking and feeling your best comes with some costs. This category covers things like haircuts, skincare products, makeup, and hygiene items. It might also include gym memberships or fitness classes if staying active is important to you. While these might seem like small expenses, they can add up quickly. Keep track of how much you’re spending here and look for ways to save, like buying in bulk or finding budget-friendly alternatives.

Clothing

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Everyone needs clothes, but how much you spend can vary widely. This category covers new clothes, shoes, and accessories. It’s a good idea to spread out your clothing budget over the year, even if you tend to make bigger purchases seasonally. Don’t forget to include the cost of dry cleaning or repairing clothes. If you’re trying to save money, consider shopping at thrift stores or having clothing swaps with friends.

Entertainment

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Life isn’t all about paying bills – you need to have some fun too! Entertainment covers things like movie tickets, concerts, sporting events, or hobbies. It might also include dining out or drinks with friends. While it’s important to enjoy life, be careful not to overspend here. Look for free or low-cost entertainment options in your area, like community events or museums with free admission days.

Pet Expenses

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If you have furry (or scaly) friends, they come with their own set of expenses. This includes food, regular vet checkups, medications, and supplies like litter or toys. Don’t forget about occasional costs like grooming or boarding if you travel. Pets bring a lot of joy, but it’s important to budget for their needs to keep them healthy and happy.

Home Maintenance

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Whether you rent or own, there are always costs associated with maintaining a home. For renters, this might be small things like light bulbs or cleaning supplies. Homeowners need to budget for bigger expenses like repairs, lawn care, or pest control. It’s a good idea to set aside a bit of money each month for these costs, even if you don’t use it right away. That way, you’re prepared when something needs fixing.

Education

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Learning often comes with a price tag. This could include tuition payments, textbooks, or online courses. If you have children, factor in school supplies and any fees for activities. Even if you’re not in school, you might want to budget for professional development or hobby-related learning.

Childcare

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For parents, childcare is often a big part of the monthly budget. This could include daycare, after-school programs, or babysitters. The cost can vary widely depending on your location and needs. If you have irregular childcare needs, try to estimate an average monthly amount.

Travel

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Even if you don’t take big trips often, travel expenses can pop up. This might include visiting family, weekend getaways, or saving for a larger vacation. Setting aside a little each month can help make travel more affordable. Don’t forget to factor in costs like gas, plane tickets, and lodging.

Emergency Fund

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Having money set aside for unexpected events is crucial. Your emergency fund should ideally cover 3-6 months of expenses. Build this fund slowly by setting aside a fixed amount each month. This money can help you handle surprise car repairs, medical bills, or job loss without going into debt.

Work-Related Expenses

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Your job might come with its own set of costs. This could include uniforms, tools, or special equipment you need for work. If you work from home, factor in costs for your home office setup and supplies. Don’t forget about professional memberships or certifications you need to maintain. These expenses are often tax-deductible, so keep good records.

Hobbies and Recreation

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Having interests outside of work is important for well-being. Budget for supplies or equipment related to your hobbies. This might include art materials, sports gear, or gardening tools. Include any fees for clubs or classes you attend regularly. Remember that hobbies should fit into your budget after covering necessities.

Tax Payments

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If you’re self-employed or have income that isn’t taxed automatically, set aside money for taxes. This helps avoid a big bill at tax time. The amount will depend on your income and tax bracket. It’s often recommended to save about 25-30% of your income for taxes. If you’re unsure, talk to a tax professional to figure out the right amount for your situation.

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Diana Tablan

Diana Tablan is a seasoned writer who loves to explore fun lifestyle topics and various human interest stories. During her free time, she enjoys reading, painting, and cooking. Diana’s writings can be found in several popular online magazines in Canada and the US.