People who want a clearer understanding of where their money is going each month.Pet therapist to mediate dog/cat disputes.The advantage of the themed budget is that you can easily assess what the different areas of your life cost and make sure everything is aligned with your financial goals. It’s like when you make a packing list for a trip, you list your toiletries together. This is perhaps the most common approach to your budget category setup: group your expenses by theme. Folks who are starting with very little money.Your budget just helps you understand what you need to spend each month so you can decide what to do with the rest. Note: Optional doesn’t mean you can’t or shouldn’t do it. But for some people, this is a good starting point to understand what spending is necessary each month. You could shop at different stores and buy less expensive food to lower your grocery bill. You could move and possibly lower your rent. It’s worth noting that this may seem set in stone, but it’s not. The Mandatory & The OptionalĪre you a hard-nosed budgeter who’s ready to get tough on those optional expenses that are causing financial distress? No? But you think someone in charge of your bank account probably should? Then consider this approach: create one category group for mandatory spending and one for optional stuff like your daily cinnamon bun (no one said this was going to be easy). Make your categories reflect your life! 1.

A budget category example setup shown in YNAB.

You need a budget categories