our spending categories

Why We’re Tracking 14 Spending Categories

Why We're Tracking 14 Spending Categories

I’ve written before about YNAB(You Need a Budget), the software that we use to budget. It allows us to track and manage our paychecks, bonuses and other income. The software also excels in tracking spending. This includes current spending and upcoming transactions. We track savings as well, including “age of money”, emergency savings and sinking funds.

YNAB’s spending tracking is the choicest feature. We can use the software to track purchases in categories. These categories have budgets assigned to them using the income we receive.  Income via paychecks or otherwise.

I’ve demonstrated in our financial reports the value of tracking spending.  You can’t control what you don’t track.

The categories themselves are critical.

A quick aside on an upcoming goal

Before I get into the logistics of spending categories I wanted to let you know about an upcoming post on a goal. I am tempted to detail too much of this now, but to put it short I have a new Health goal. I am going to run a half marathon. My conditioning is not where it needs to be to attempt this immediately. So I will need to find a training plan that builds up to it including a few intermediate races.

I’m stoked.

Our Spending Categories

  • Food
  • Household
  • Utilities
  • Automotive
  • Medical
  • Financial Obligations
  • Personal Care
  • Subscriptions
  • Education
  • Savings
  • Gifts
  • Entertainment
  • Wish Farm
  • Business Expenses
tracking spending


One of the most important of Maslow’s Physiological Needs. Our food category covers our necessary food as well as our discretionary food.


Every month this is our largest food expense.  

Groceries covers food from grocery stores (Wal-Mart, Target, Kroger, Aldi, etc.).  It will also cover sundry items such as toothpaste, paper towels and cosmetics.

Date Night

This is a monthly budget category for us to go to dinner kid free.  This covers dinner only.  We need free childcare for this budget to be met.  Often times we can coax a grandparent into childcare duty.

Dining Out

Dining Out is a difficult category to keep within spending limits each month.  We budget approximately $125 for it.  This covers evening and weekend dining that the entire family partakes in.

Dining – Stephen and Erica

These two categories will cover lunches at work for both of us.  The amounts are different because I will eat out once or twice a week and Erica will eat out once or twice a month.

School Lunches

On most days my son will eat a packed lunch.  He prefers them.  But he often buys milk and sometimes a snack to supplement it.  This category covers this cost.


I track Alcohol separately from groceries and dining out because I want the data to be able to control my spending.  Erica rarely drinks, I drink plenty.  I will track Alcohol in this category no matter where I’m spending it.  The money goes here if it’s the beer at dinner out or a 6 pack of IPA’s from the grocery store.  


The Snacks category covers items that aren’t really dining out and they are also not really groceries.  Snacks could be one of the kids getting a Slurpee or even the occasional coffee splurge.  We don’t usually spend much here.

tracking spending housing


Oh, homeownership.  What a joy!  Here are all of our costs directly related to our house and the items we keep in it.

Mortgage and HOA

Here is where our mortgage lives.  At the time of this writing, we’re 2 years into a 15-year mortgage.  Our HOA, which is a hefty $121 each month sits in the same category.

Fire Department


We live in an unincorporated neighborhood.  Our neighborhood shares a Fire Department with a surrounding city.  For this access, we pay a one time fee of $240 every June.  This category is used as a sinking fund and I place $20 in it every month until June when I will have enough to make the payment.

Sinking funds are one of the many things YNAB  (affiliate link) excels at.  If you aren’t familiar with sinking funds, think of them like an envelope you fill with cash each month until you need to spend out of it.  The YNAB software creates these digital envelopes.

Household Items

This is a broad category which can cover anything from a new toothbrush to a couch.  At this time we don’t distinguish between major or minor purchases.

Home Maintenance

Repairs.  One of the joys of homeownership is needing to make repairs every once-in-a-while.  In 2017 we had a major hail storm that destroyed our roof, garage doors, and gutters.  In 2016 and 2017 we replaced HVAC systems in the house.  At some point in the near future, we will need to replace the water heater.  This is what Home Maintenace covers.  A rule of thumb is to budget 1% of the house value to this category annually.  We’re not doing anywhere near that much at this point, but we are working towards a better-funded category.

spending categories


This large major category for our utilities we split up into three smaller categories.  Utilities are at least somewhat a necessary extension of our housing costs.

Electricity and Gas

The Electric bill covers Electricity and Gas consumption.   In our climate, we expect mild bills in the spring and fall months and heavy bills in the summer and winter.

Water and Trash

The Water bill covers Water, Sewer, and Trash Fees. Sewer and Trash are fixed fees but water usage fluctuates from Summer to Winter based on landscape usage.

Our internet and mobile phone bills live here.  This category is a pretty solid $140 per month at the time of this writing.  This number includes home broadband and three cellular devices through Cricket.

spending categories


The category for our cars!  This is a big one.  I’ve recently described our plan for cutting costs on automotive expenses.  In October of 2018, we spent $1,700 in this category.

Auto Principal and Lease Payment

Here I categorize our loan payment for our Explorer and our lease payment for our Volt.

The loan payment can be variable if we’re paying more than the installment payment.

The lease payment is fixed.


This is our auto insurance.  We carry full coverage for both vehicles and our liability coverage is much higher than state minimums.  


Our use of toll roads depends greatly on my work driving.  I try to keep this category with a balance of $80 at all times.  This funds the Toll Tag automatic charge as it comes through.  Some months I might spend $80 on this category and many others $0.


Fuel costs for our Explorer average $225 per month with gas prices at $2.50 per gallon.  My Volt will frequently use $25 in a month for gas.  We drive both vehicles approximately 1,200 miles per month.

Auto Maintenance

I try to budget some money monthly in this category and it covers oil changes, tire rotations, small service items.  Both of our cars are new so this is not a big hitter.

Car Wash

I budget $12 per month for car washes.  That covers a $5 wash and $1 tip for both vehicles.

Tires – Explorer & Volt

I keep sinking funds for both vehicle tire replacement.  $40 a month goes into these sinking funds with an expected replacement every 3.5 years.  Tires are expensive!

Registrations and Inspections

This is a sinking fund for annual registrations, emissions and safety inspections.  A total of $25 per month is saved for these.

Vehicle Replacement

I’m not saving in this category yet.  Eventually, I hope to be taking our payments in the Loans and Lease category and putting money away each month for necessary future car replacement.



Knock on wood, our medical expenses aren’t a large spending category.  Our family is mostly healthy.


We fund this from cash flow each month if we expect expenses.  Most of the time we spend out of our HSA account for contacts and eye exams so the spending never makes the budget.


Similar to vision, we use HSA funding to take care of this.  This is cashflowed when the HSA is tapped out.


Just like the above, this category exists only if we need to use it.  Over the counter medications end up here as do any doctors visits.


This category is for funding of our HSA.  My employer funds $100 each month in the HSA.  One of my financial plan goals is to find a way to fund the HSA better.  Money that sits in an HSA can grow tax free.


Financial Obligations

This major category covers miscellaneous financial expenses.

Interest Paid

This is an oops category as we accidentally pay interest on anything other than our auto loan or our mortgage.  This is pretty rare.

eBay Sellers Fees

This category is funded from proceeds of sales items.  eBay and Paypal like to take a piece of every sale.

Annual CC Fees

We fund this sinking fund each month to pay the annual fees for credit cards.  These cards we usually keep around for the annual benefits.  Our household loves credit cards and we try to make as many points from our spending as possible.

Life Insurance

Erica and I each have a 20 year half million dollar policy that we pay for.  This costs us $60 per month total.  These will be terminated when we are 45.  Before we get too close to 40 years old we are probably going to need to replace this with a new policy.  I think the rates for life insurance are slightly cheaper now than when we purchased 10 years ago.


We each get cash each month that’s not earmarked to something specific.


Personal Care

If I had any category that I consider a catch-all, it’s this one.

Clothes | Stephen | Erica | Daughter | Son

As a family, we do not spend very much on clothing.  I’ll fund $10 a person into these categories monthly as a sinking fund then add to them from cashflow if we need to make a clothing purchase which exceeds that amount.


This covers fitness related items for Erica and I.  This could be a gym membership or weight loss subscription.

Sports – Son

Our son does Tae-Kwan-Do.  It’s not cheap.  At the least, we are spending $120 a month on this, but when there is a tournament, uniform purchase, or belt advancement it can be over $200.  He has been participating in the sport for almost two years now.  

Haircare and Nails

Haircuts, Manicures, and Pedicures.  This is pretty straightforward.  We all get professional haircuts except for our daughter who is a bit young for that.  Erica will get a manicure and pedicure occasionally.


We have one cat and one dog.  They don’t cost a lot.  This covers pet food, litter, and treats for the animals plus the random vet visit.


This is a big category for us.  We spend out of this category but we use Wish Farms to save for the vacations.

We’ll often take two big trips each year and a mini trip or two as well.  As an example:  In April of 2018, we took an anniversary Staycation in Texas at a local hotel.  In May of 2018, we took a cruise to Alaska and a side trip to Seattle.  In July of 2018, we took a long weekend trip to San Antonio and Austin.  Next year we have a cruise planned for March and potentially a National Park trip during the summer.  

We rarely regret spending on Vacations.

phone apps


Here I keep separate categories for each subscription service that we have.  Some of these are annual fees and the category is a sinking fund with a target date.  The others are monthly expenses.

A list of our current Subscription Categories:

  • Usenet
  • Amazon Prime
  • iCloud
  • SiriusXM
  • Spotify Family
  • Netflix
  • Youtube TV
  • YNAB
  • Kindle Unlimited

These change monthly and having the categories separated help remind me what I’m paying for each subscription and keeps me honest about the total amount!

How we have cut spending from our lives:

book stack apple



We love our daughter’s Childcare provider.  This is her last year in preschool before she’s in full-day Kindergarten.  That excites us.  We pay $125 a week for childcare with the exception of when Erica is not teaching.  So although we love the provider, we’ll love not spending the money even more.

School Supplies

We spend out of this category and save up a little each month for August.  August is a big month for us for school supplies.

College Savings Son | Daughter

We save $125 a month per child into their 529’s.  We use Vanguard for the 529’s.

piggy bank


Many of the previous categories are technically Saving categories.  But some live here in the dedicated Saving section.

Stuff I forgot to Budget For

I’ve been funding this each month and I’ll move this around as necessary for purchases we have forgotten to budget for.  Flexibility when budgeting is key.

Emergency Fund Level 1

We have many levels of Emergency funds. This fund covers money in a low interest savings account attached to our Checking account.  This covers a small buffer if we need to move money quickly into checking.

Our Level 0 emergency fund is the checking account buffer we have using YNAB  (affiliate link) to Age Your Money.  I hope we never need to move money from Level 1 to checking because of this.

Emergency Fund Level 2

We have $5,000 in CD’s that are off budget.  I consider those Level 3.  This category is liquid cash savings in an internet only savings account.  The account is not with Chase who is our primary banking institution.  So if we need something it takes a few days for the transfer.  This is done on purpose.  Level 2 will grow to cover multiple months of expenses.



This category is for budgeting IRA savings.  Our IRA’s are also with Vanguard.



This category includes sinking funds for the following occasions:

  • Our anniversary
  • Stephen’s Birthday
  • Erica’s Birthday
  • Daughter’s Birthday
  • Son’s Birthday
  • Relative Birthday’s (we have 11 relatives to buy birthday gifts for each year)
  • Christmas
  • Charity



We don’t spend a ton of money on entertainment.  Many of the things we enjoy doing like watching TV and reading books are very low-cost items.


I’m Stephen and I have a confession.  I buy books.  It’s common knowledge that the library is free and super useful these days.  But I don’t use it.  I use Amazon Kindle and Audible.  We’re even currently paying for Amazon Kindle Unlimited which my Son has been getting a lot of use out of.

Toys for Daughter

We fund a small amount to this each month and if we use it great, if we don’t it’s funneled back to savings at the end of the month.

Toys/Hobbies for Son

Just like the above but slightly more because he’s 9 and his hobbies are more expensive.

Hobbies for Erica

This is funded each month for Erica to do with as she pleases.

Hobbies for Stephen

I have many hobbies.  They cost money.


This category could cover movie tickets, parking at an event, DraftKing’s funding.  Usually, this is funded at $50, but this can be increased if we expect to spend more.


Wish Farm

What’s a Wish Farm?  This is a concept YNAB  (affiliate link) made popular.   Wish Farms are the Farming of items on your Wish List.  You build a Wish List of small, medium and large items.  Small could be, buy a new rug for $100.  Large could be Kitchen Remodel for $20,000.

As you are ready to work on a Wish List item you move it into your budget into the Wish Farm.  You could be working on as many as you want at a time.  I’ve narrowed it down currently to one Small, and two Large items.

Our Current Wish Farm Categories:

  • Small – Under counter light fixture and wire for re-wiring our butler’s pantry and our adjacent pantry.  This is $120 item.  I haven’t fully funded it yet just because I’m not ready to do the work.  I’m putting in $10 a month, but eventually, I’ll knock it out and move it over to the appropriate spending category.
  • Large – 2019 Cruise.  I believe I need to fund this to $2,000 by March of 2019 to cover the spending money on the cruise and in Miami.  I’ve already purchased the cruise itself and the airfare both directions.  I’m going to start a write up on this vacation at some point in the near future.
  • Large – Refinish the Kitchen Cabinets.  My goal for this is $6,000 and there is no date set on it.  We’ve been remodeling our Kitchen slowly.  Last December we put in new marble countertops ($3,000), new range and vent hood ($1,500), new kitchen sink and garbage disposal ($500), new under-counter lighting ($600) and I’ve been tiling the backsplash myself ($600).  Total to date $6,200.  The next step is refinishing the cabinets which will also involve replacing a few door fronts which have fallen apart.  I’ll pay a professional to do this and I’ll need to get bids once this is close to being funded.

Our Wish List has another 25 items on it ranging from new flooring to a new Apple Watch.  We aren’t working on those now.


Business Expenses

This category funds the FIRE lane expenses.  I have one category at the moment.  I’ll probably split this up into more categories as time goes on.  But for now, I’m keeping it simple.

Web hosting/Plugins/Themes

These are costs related to running this site.

In Conclusion

As you can see above our categories are broad and many.  

A quick count shows we have over 80 categories to think about each month when budgeting.  Over time, I can use the category data to provide an illustration of our spending and help us find areas to cut expenses so we can increase savings on our path to FIRE.

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