Budget Categories That Make Your Personal Finance Successful

Budget Categories That Make Your Personal Finance Successful

Anyone who has lived on a budget knows how difficult it can be to get started. Here are a few tips and budget categories that can make your personal finance successful.

A Love-Hate Relationship with Budgeting

When it comes to budgeting, there are two types of people: those who love it and those who hate it. And, I can honestly say that I have been both at one time or another. While many view budgeting with a sense of drudge, it all depends on how you approach it.

The Hate

When I was a student and barely scraping by, I had to budget to make sure I had enough money to get me through the month. Even though I was working three jobs, it rarely was enough to cover tuition, living expenses, and other basic necessities. There were times when I was the epitome of the poor student stereotype. I can’t recall how many times I found myself eating ramen noodles and instant rice because it was the only food I could afford.

Furthermore, I hated to discuss money, my situation, and anything related to finance. It was such a strained area of my life that I avoided all topics of conversation about it. At this point in my life, I budgeted out of necessity, not financial responsibility. And I truly hated how hard it was just to survive.

However, I became very efficient at it. Gradually, it became easier and my hatred began to dissipate. Rather than stewing in how much I despised living on a budget, I started to view it as a game. It also emphasized areas and patterns of overspending which further helped me optimize my budget. In fact, it allowed me to work my way through college and avoid thousands of dollars of student debt.

The Love

I can hardly believe I’m writing this. But now that I’m more financially stable, I actually look forward to reviewing my monthly budget. At the end of each month, I compare my spending to see what has changed. Checking my invoices relieves my anxiety about finances since I can account for every penny. And, I often find extra money in the budget. Figuring out which categories receive the extra funds is the most rewarding payoff after years of financial discipline. Every month that I have a surplus gives me an extra boost towards my financial goals.

It seems obvious, but budgeting becomes much simpler when you have more discretionary income. Unfortunately, we often take this for granted and only associate budgeting with living on a limited income. Instead, I have completely changed the way I view my finances and recognize that budgeting is an important tool. I see it as a way to help me reach my financial goals faster rather than a sign that I am struggling financially.

Budget Categories That Make Your Personal Finance Successful

Micromanaging Your Finances

I am a very detail-oriented person. So when I began budgeting, I tracked every expense in a long list of categories. I separated everything into more than 30 different categories, keeping track of my purchases with a detailed spreadsheet including dates, amounts, payments, and other relevant information.

However, you can probably guess how long this lasted. It became a tedious and time-consuming chore. The worst part was that this level of accuracy wasn’t really necessary. Unless tracking expenses down to the cent brings you immense joy, micromanaging probably isn’t the right approach. 

Macromanaging Your Finances

Today I take a much broader approach to budgeting. Rather than getting granular with my finances, I macromanage and choose simple budget categories to make it easy and convenient.

First, I separate my expenses into needs vs. wants; the things I need to survive and the things I simply want to spend money on. In the beginning, this process was much more labor-intensive. I’d sit down with my credit card statements, highlighters, and calculators to tally everything up. Now, I use a single credit card and online banking to manage my budget. Not only does it save paper, but they even have a tool that tracks my spending for me. Therefore, I have adapted my system to align with the categories that my credit card already tracks. In just a few minutes, I can review my budget for the last 12 months.

There are endless ways you can break it down and budget categories that make your personal finance successful. You can even find budgeting apps that will allow you to customize your budgeting categories and help you track your monthly expenses from your phone.

While it is best to devise a system that works for you, this is how I break down my monthly budget:


  • housing
  • bills & utilities 
  • groceries
  • transportation
  • household items
  • healthcare
  • investing
  • savings/emergency fund
  • education/personal development
  • debt payment


  • shopping
  • food & beverage
  • health & wellness
  • entertainment
  • discretionary/miscellaneous

The other thing to keep in mind is that your needs change. While I don’t spend money on all the categories in the “needs” column anymore (i.e. education and debt payment), they still remain on the list. Therefore, it’s a good idea to review your budget annually and when you experience any major life changes that affect your finances. 

Budgeting Tips to Help You Reach Success

The first step is deciding to take control of your budget. The next is to create budget categories that will make your personal finance successful. Here are a few tips that have helped keep me in the driver’s seat over the years.

  1. Be honest with yourself. If you are struggling to get ahead, you need to take an honest assessment of your spending habits and financial personality. Ignoring the problem will only make it worse.
  2. There is no one-size-fits-all. When it comes to budgeting, you need to make a plan that works for you. Choose one that you know you can stick to. You don’t need to make it harder than it has to be.
  3. Get your priorities straight. Your spending is ultimately a reflection of your values and priorities. Determine what your top priorities are. Then, adjust your budget and habits to fit them.
  4. Utilize technology. If you hate dealing with paperwork, use technology to make it easier. Download apps to help you create a budget and track expenses. You can also set notifications on your phone and calendar to remind you when payments are due.
  5. Practice some self-control. If you ever want to become financially independent, you have to take control of your finances. However, it all starts with practicing self-control. For me, identifying wants vs. needs helps me maintain focus. It reminds me of my long-term goals and helps me understand that irresponsible spending habits undermine them.

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