There are many categories that need to be in your budget, but below are 5 of the essential categories for any family’s budget:

1.       Groceries- It’s important to get a solid estimate of your grocery bills that you spend in a given month. Monitor your previous year’s average grocery bills to get a good estimate, and consider annualizing your grocery budget so you can freely buy in bulk when it stands to save you money, as opposed to not buying regularly used items in bulk so you make the current month’s budget.

2.       Restaurant Spending- This absolutely needs to be its own category, which is why we recommend keeping separate restaurant and grocery budgets, as opposed to one consolidated “Food” budget. Getting a handle on restaurant and coffee spending is key to paying down debt and building your retirement portfolio, so be sure to limit how much money you dedicate to your “Restaurant Spending” budget category.

3.       Rent or Mortgage- This Rent or Mortgage category is a pretty standard one, but don’t forget to add it to your budget, as for most Americans it’s one of the largest budget categories you’ll have. This is particularly important if you rent or have a variable mortgage payment, so you can keep on eye out for increases and price shop as necessary.

4.       Cell Phone- Many consider a cell phone to be a utility or a necessity and consequently don’t include it in their monthly budget, but this is typically done to their detriment. Cell phone companies like to sneak in added charges, which can be easily found if you keep this category in your budget and regularly analyze it.

5.       Cable Bill- Just like in the cell phone example we just discussed, cable companies love to add in hidden fees and raise your payment considerably once you’re out of contract. That’s why adding this category to your budget is an imperative. Be sure to keep streaming services like Hulu and Netflix in their own separate categories, so when one of them gets out of line you’re not left wondering which one spiked. Cable bills are consistent from month to month, but don’t neglect monitoring this bill out of boredom.