Whether you’re creating a new monthly budget or refreshing an old one, you’ve probably noticed how important (and difficult) it is to get your monthly expenses right. Underestimating or missing an expense can throw your whole spending strategy off balance, so it’s a good idea to explore some budgeting norms.
To help you get started, we’ve assembled a list of 20 common things to include in a monthly budget, along with an average amount for each one that you can use as an initial benchmark.
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20 Common Monthly Expenses to Include in Your Budget
1. Housing or Rent
Housing and rental costs will vary significantly depending on where you live. For example, the median home value in 2022 is $480,275 in New Jersey, but $213,360 in Ohio. Cost-of-living calculators can help you adjust your budget estimates based on your location.
When it comes to a home loan, interest rates and the length of the mortgage also have a powerful effect on your monthly mortgage payments. Assuming a national average loan size of just over $413,000, a 30-year loan at a 6.59% interest rate (the current national average for 2022) would cost $2,635 per month. A 15-year loan for the same amount at a 5.8% interest rate (the current national average for 2022) would cost $3,441 per month.
Rent varies in a similar way based on where you live geographically. In 2022, the average monthly rent for a one-bedroom apartment in Kansas is reported at $1,169. Move to California, and that one-bedroom apartment will set you back $2,723.
(The numbers that follow in this article are based on Department of Labor data unless another source is cited.)
2. Transportation and Car Insurance
With a 37% percent increase in fuel costs, transportation is the second-largest budget item for most people, with average monthly expenses of about $915, including car payments, gasoline, and insurance expenses. This should include all your regular expenses of commuting and just getting around town.
If you don’t have a car payment, you might include less for transportation in your monthly expense budget. On the other hand, an older car might need a higher budget to cover the costs of maintenance.
Also, most car insurance plans let you save money if you pay for a full six months in advance. If you build that option into your monthly expense spreadsheet, saving enough each month to pay for your insurance up front, you’ll come out ahead in the long run.
3. Travel Expenses
Travel expenses include things like weekend getaways, visiting family, traveling for work, or anything that goes beyond your usual expenses with things like plane tickets, hotel stays, and rental car costs.
If you’re planning something big like a week-long vacation, cross-country drive, or overseas trip, consider creating a separate budget for that expense and saving up for it in advance.
4. Food and Groceries
Everyone has to eat — and U.S. households spent an average of $692 on monthly groceries and eating out in 2021. Given 2022 inflation rates of about 8%, you can expect that number today to be closer to $750. Be sure to calculate your household’s weekly grocery trip costs and restaurant expenses to create an achievable monthly food and grocery budget for you and your family.
5. Utility Bills
Utah residents pay the least for their utility costs—heat, gas, water, electric, cable, and internet—at $345 per month, according to Move.org. Hawaiians pay the most for their utilities, at $612 per month.
You might be able to lower the average monthly cost of your utilities by foregoing cable and opting for streaming services with basic internet instead.
6. Cell Phone
The average cell phone bill runs from $40 to $140 for a family plan, but you could spend as little as $2 a month for 75 months with US Mobile if you only need basic service with no data.
7. Childcare and School Costs
Monthly childcare costs range from $453 per month in Mississippi to $1,683 in Massachusetts. That’s a huge range, and these are just averages. Check your local childcare options to decide how you might need to adjust your plan.
Once your children are of school age, you may need to account for private-school tuition. But even if you send your children to public school, you’ll need money for various fees, school supplies, and occasional school trips. Adding room in your monthly expense tracker for school and childcare expenses is key to a successful and realistic budget.
8. Pet Food and Care
It costs $20 to $60 per month to feed a dog, but you may need to spend more if your pet requires a special diet or has allergies. You might also want to include something for pet grooming expenses and other care costs, like treats, toys, and boarding expenses.
9. Pet Insurance
The average monthly cost of pet insurance is $48.78 for dogs and $29.16 for cats. For $14 to $98 a month in premiums, you may be able to head off a big vet bill. If you opt for insurance, be sure to build your monthly pet insurance cost into your monthly expense list.
10. Clothing and Personal Upkeep
The average U.S. household spends $146 per month on clothing, according to the U.S. Department of Labor, and you’ll probably want to include personal grooming costs as well as any dry cleaning in this budget category.
The average monthly cost for personal care products and services ranges by individual, but haircuts, soap, toothpaste and other essential items all add up and should be included in your monthly expense budget. The average person spends $60 per month on personal grooming expenditures.
If you buy things like soap and shampoo at the grocery store, it might be easier to include those in your food and grocery budget category. If you purchase your shampoo, body wash, or other grooming items from a specialty store, be sure to include that amount in your monthly budget planner.
11. Health Insurance
If you don’t have employer-based health insurance, you may want to purchase a plan. Monthly health insurance costs differ dramatically depending on your age, where you live, and your lifestyle — factors like smoking and pre-existing conditions can affect the expense of your plan.
Depending on these factors, you can expect to pay anywhere from $309 to $831 per month on health insurance plans — the median cost in America is $541/month. You may also need to add more to that figure to account for deductibles, co-pays, over-the-counter medicines, and other healthcare expenditures.
12. Monthly Memberships and Subscriptions
Staying healthy is crucial, and working out at a gym is a great starting point. The average gym membership costs about $58 per month but can run significantly higher, especially if you’re at a specialty facility. If a gym membership is an important part of maintaining your health, be sure to include it in your monthly expense list.
While you’re at it, now is a good time to take stock of all your monthly subscriptions. Americans spend close to $220 per month on subscription fees — most people underestimate what they’re spending.
Streaming services are among the most obvious subscription expenses, but online publications, shaving clubs, monthly care boxes, wine clubs, and other recurring services are all included in your monthly memberships.
Since these services are usually paid for automatically every month on a debit or credit card, it’s easy to forget about them if you aren’t tracking them in a monthly expenses list or spreadsheet.
13. Life Insurance
Average monthly life insurance costs can vary by state, but you can typically buy term life insurance starting at about $15 per month — the average cost is around $26 a month.
When you’re setting up your monthly expenses budget, you might lump this amount in with the health insurance costs deducted from your paycheck if your life insurance is through your employer. If you have a separate, personal plan, you’ll probably want to capture this expense in its own budget category.
14. Homeowners Insurance
Renters or homeowners insurance can help protect against theft, fire, and other kinds of threats or damage. The average renters insurance cost is about $27 per month, while homeowners insurance costs roughly $35 per month for every $100,000 in home value.
Renters insurance is available to just about any renter, whether you’re renting an apartment in a professional apartment complex or renting a private residence. It covers you and your property from many kinds of damage and liability.
If you own your house, there’s a good chance you’re already paying for homeowners insurance through your mortgage. However, if your homeowners insurance isn’t included in that payment, be sure to add it to your monthly expense budget.
15. Entertainment
A key tip to a successful monthly expense budget is making room for fun. Figures on these items are hard to come by because they depend so much on what you like to do. Still, you can put together a good estimate for your own monthly expense list with a little planning.
If you have something specific in mind, such as going to the movies, dinner with a friend, or a weekly date night, look up menus and pricing to figure out how much money you’ll need to allocate in your monthly budget planner for those activities.
16. Student Loans
Nearly 70 percent of 2021 graduates took out student loans, with an average of $29,000 in borrowing. Based on that amount, the average college graduate would owe $560.65 per month in student loan fees if they wanted to pay the loan off in five years at 6 percent interest.
Bear in mind that recent graduates earning less than $125,000 a year can qualify for student loan forgiveness of up to $20,000 with President Biden’s new debt relief bill.
17. Credit Card Debt
The average household credit card debt is about $5,300. If you carry the average balance and pay 15 percent interest, you could pay the card off in a year with monthly payments of roughly $471.
If you suffer from high credit card debt and interest rates, there are many ways to budget to pay down credit card debt, even if your monthly expenses are tight.
18. Retirement
The earlier you start saving for retirement, the longer your money can benefit from the power of compound interest. Some financial planners recommend setting aside 10 to 15 percent of your income for retirement, but if you can save even more, you’ll reach your retirement goals more quickly and have more protection against a market downturn.
There are many ways to save for retirement and work on a long-term budget to retire on time.
19. Emergency Fund
Budgeting enough to save up three months’ worth of expenses as an emergency fund can help see you through tough times. The average American household spent $66,928 in 2021, or $5,577 a month. Three months of expenses would suggest having a rainy-day fund of $16,731.
If you set aside $1,395 each month toward your emergency fund, you would accumulate $16,731 in a year. That amount might sound intimidating, so if you can’t manage that in your monthly expense budget, start smaller, setting aside what you can.
20. Large Purchases
Will you need to buy a car in five years? Put a new roof on the house in two years? Make a list of these larger expenditures and create a set amount each month to add to your budget so you can pay for them when the time arrives.
How to Create a Monthly Budget:
When you’re ready to get started, creating a monthly budget requires 4 basic steps:
Step 1. Calculate your income
Start with your net monthly income. In other words, figure out what you bring home every month after taxes and other paycheck deductions. Once you know how much you have coming in every month, you’ll know how much you can spend.
Step 2. List all your expenses
Then, list all your monthly expenses. This includes needs, like your electricity bill and groceries; wants, like streaming TV subscriptions and take-out; and even planned savings, like monthly contributions to your 401(k) or emergency fund.
Be sure to remember the bills you pay quarterly, semi-annually, or annually too, such as certain insurance plans or property taxes.
Step 3. Subtract your expenses from your income
Add up the total of all your monthly expenses and subtract that total from your monthly income. That tells you how much you’ll have left after all your planned expenses to spend on other things. Consider using some of it to pay down debt faster or add to your savings, and spend the rest on anything you like!
If your expenses are higher than your income, it’s a good thing you decided to make a budget! Take a look at each of your expenses to see where you might be able to cut back, from small changes like eating in more often to bigger changes like moving or finding a roommate to share your living expenses.
Need to make a few extra bucks? Take a look at our guide on 23 Ways to Make Quick Money in One Day.
Step 4. Create and track your budget on a monthly basis
Now that you have your monthly budgeting plan, the trick is to stick to it. Start by deciding how you want to keep up with your spending. If you want to track it by hand—whether on paper or in a spreadsheet—you’ll need to write down all your transactions in each category every day, from paying your bills to buying that latte on the way to work.
Creating a monthly spreadsheet and keeping up with it is a lot of work, but it’s an important step in taking control of your finances.
Monthly Budget Calculator:
Want some help figuring out how to make ends meet? Our free online budget calculator can walk you through the process of creating your monthly budget, including lots of helpful tips to help you save money and make sure you’re not leaving anything out.
Monthly Budget Spreadsheet:
Ready to create your monthly budget spreadsheet? If you want to create your own monthly budget spreadsheet, whether on paper or in a spreadsheet app, check out our 5 quick tips for creating a great DIY monthly budget template.
If you’d rather track your spending automatically, saving you tons of time every month, consider an app that includes a monthly expense tracker to help you get started:
- Quicken Deluxe for Windows (includes companion apps)
- Quicken for Mac (includes companion apps)
- Simplifi (mobile-first apps for iOS, Android, and the web)
