What are common expense categories?

Common expense categories can be broken down into several primary types. Here's a useful categorization:

1. Committed Expenses:

   • Rent or Mortgage
   • Utilities (electric, gas, water, trash)
   • Insurance (car, health)
   • Car payments
   • Internet and phone bills

2. Non-Committed Expenses:

   • Groceries
   • Transportation (fuel, public transit)
   • Kids' activities and sports
   • Dining out
   • Entertainment

3. Irregular but Predictable Expenses:

   • Vacation savings
   • Birthday and holiday gifts
   • Car maintenance
   • Annual and semi-annual insurance payments
   • Home repairs and maintenance

Managing these categories efficiently involves proactive budgeting to avoid surprises and ensure that all expenses are planned for in advance. For example, saving a little each month for predictable events like vacations and birthdays can help avoid financial strain when these expenses arise.1 2