I perform my budgeting diligently. It reduces my financial anxiety and helps me make solid financial decisions. Even though I have a good salary, I find it useful to budget diligently.

1. Essentials: These are expenses that I can’t get out of. (An exception is food, which I track separately — see further down.)
   1. Fixed/regular expenses: These are expenses that I at regular intervals (usually monthly). Examples include rent, electricity, internet, insurances, and software for budgeting and password management (yep, I consider those pieces of software essential).
   2. Variable/irregular expenses: These are unpredictable expenses. Examples include taxes, and legal costs.
2. Food: I track this separately from essential expenses (see above), because there is a lot of choice in how to spend food money — lunch can be €3 or €30 and I want to make good financial decisions on how I spend food money.
   1. Groceries
   2. Eating out (common): I use this category when I’m either too lazy or don’t have the time to prepare food for myself. As outside life returns back to pre-pandemic levels, I’ll budget more and more in this category.
   3. Eating out (special): I use this category for special occasions, e.g. a date, eating out with friends, family visits, a birthday dinner, etc.

3. Replacement: See budget for replacing past purchases .

4. Buffer: This includes my emergency fund (roughly 3× monthly income), and income replacement. I’ve used the latter in cases where I knew I was going to be unemployed for a while, and filled that up with money I had saved beforehand.

5. Quality-of-life: This includes all the nice-to-have things that aren’t quite essential. Examples include home improvement, new clothes, medical expenses not covered by insurance, cleaning service, etc.
   1. Fixed/regular expenses
   2. Variable/irregular expenses

6. Saving and investing: This is saving for the future! My retirement fund is part of this, as is general investment savings (which I add to rather irregularly).

7. Fun: Any discretionary spending. Examples include the Netflix subscription, holiday savings, convenience expenses (e.g. taking a cab instead of public transit), entertainment (games, movies, …), etc.

8. Giving: This includes charity donations, creator support (Patreon mostly), and gifts for others. I track money I’ve lent to others here as well, but it’s probably not the best place.

9. Wish list: I have subcategories for all the things I would like to have sooner or later, and slowly save up the money for them here.

See also

• Expenses for 2021
• Expenses for 2022