Add Specific Line Items to Break Down Your Budget

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Most home budgets include the big stuff: rent/mortgage, food, utilities, etc. However, going a bit further and breaking down some of those line items can give you a better picture of exactly how you’re spending your money.

Here are a few budget line items that most budgets don’t have, but should:

Work expenses

Whether you want to subdivide this even further, into “clothing: work,” “eating out: work,” and “transportation: work,” it’s important to know just how much your job is costing you. According to financial gurus Joe Dominguez and Vicki Robin, authors of the best-selling Your Money Or Your Life, work expenses cost much more than you think. Financial blogger Mr. Money Mustache notes that many people spend up to $1,500 monthly on work expenses, including “commuting, clothes, restaurant lunches, housekeepers, daycare, [and] de-stressing activities.”

In short: tracking your work expenses lets you know just how much your job is costing you, and whether you need to adjust those costs — or change jobs.

Eating out (solo) vs. eating out (group)

I used to get cranky when friends would invite me over for group dinners. Any large party, split-check dinner is a nightmare; one person suggests ordering another appetizer platter and you have to add an extra $7 to your tab whether or not you even taste the app. I’ve been at the dinners where I ordered salad and they ordered steak and we split the check evenly. We all have.

However, my crankiness was somewhat quelled when I realized I was spending more money each month eating out by myself than I was eating at group dinners. What’s the one thing more overpriced than a Bloomin’ Onion? A daily coffee and muffin habit, that’s what.

Once I realized that the bulk of my “eating out” expenses came from me, not from the “let’s order another pitcher” whims of my supposedly profligate friends, I knew what I had to do. By making coffee and muffins at home, I was able to enjoy our monthly group dinners without getting cranky — even if I occasionally helped pay for an appetizer I never got to enjoy.

Insurance

Don’t skimp on insurance. I’ve been known to slink away from renter’s insurance offers, and to decline life insurance options as if I were going to live forever. Then I got a wife and a kid, and I learned better. If you have an apartment, you need renter’s insurance; if you anticipate being mortal, you need life insurance. Jon Fritz at SILI has a complete guide to life insurance that’ll set you up with what you need, but here’s the quote you’ll want to remember: “If you have anyone depending on your income (your spouse, children, siblings, aging parents, etc.) and you’re not independently wealthy, you will need life insurance at some point.”

Tack on an “Insurance” line item to your budget, and start taking care of yourself and your loved ones.

Bank fees

I have a specific line item on my budget for fees. Every time I pay a bank fee on something–whether it’s an ATM fee, a credit card membership fee, or a mandatory checking account fee–I separate that out into a separate line item.

It’s fantastic information to have when you want to truly compare bank interest rates. Even the best banks generally give less than 1 percent APY in interest. That means that if you have $5,000 in your checking account, you’ll earn less than $50 in interest per year.

How much are you paying in fees? At $3.00 every time you use an out-of-network ATM, you’re probably paying more to use your money than you’re earning in interest — but you won’t know unless you keep track.

What about you? What specific line items are essential to your personal budget, and how do they help you track your spending?