Six Essentials to Include in Your Monthly Budget

Creating a monthly budget is far from easy and is certainly unique to each person, but that doesn’t mean there aren’t any common features of a budget everyone can implement. If you’re struggling to know what to include in your monthly budget, here are our six top suggestions.

Key Points

  • A well-planned monthly budget acts as a financial roadmap, helping you allocate funds to essential categories like rent and utilities, thereby preventing overspending and promoting informed financial decisions.
  • Including a buffer fund in your budget provides a safety net for unexpected expenses, such as car repairs or sudden unemployment.
  • Incorporating charity donations not only contributes to causes you care about but also promotes emotional well-being through the release of endorphins.
  • Allocating a portion of your budget for “treat money” ensures you can enjoy occasional luxuries, contributing to a balanced and rewarding lifestyle.
  • Prioritising savings in your monthly budget is crucial for long-term financial goals, whether it’s for a specific purpose like buying a house or more general future security.
Nurturing the growth of money

Why Having a Monthly Budget is Important

Planning a monthly budget is a cornerstone of financial well-being, acting as a roadmap that guides you through your income, expenses, and financial goals.

By allocating funds to different categories like housing, food, transportation, and leisure, you gain a clear understanding of where your money is going each month. This clarity empowers you to make informed decisions, helping you avoid pitfalls like overspending in one area, which could lead to compromising another.

A well-structured budget also helps you identify areas where you can cut back and save money, allowing you to redirect funds towards savings, investments, or debt repayment.

Having a monthly budget isn’t just about restraint; it’s also about financial stability and freedom. Knowing your spending limits actually provides you with the freedom to make choices that align with your life goals and values.

Whether you’re saving up for a holiday, planning to buy a home, or setting aside money for emergencies, a budget serves as a tool that makes these aspirations attainable. Over time, the discipline instilled by budgeting can create a virtuous cycle of increasing financial stability, reduced stress, and a sense of accomplishment, thereby improving your overall quality of life.

The following items should be included in your monthly budget planning:

A modern and tidy apartment

1. Rent or Mortgage Payments

The first obvious thing you need to allow money for in your budget is rent or mortgage. This is likely to take up the biggest chunk of your wages and so should ideally be paid as soon as you get paid, or within a day or two maximum. This way, you can see out the rest of the month in the comfort that your rent or mortgage has been paid for.

2. Bills and Utilities

Alongside rent, you need prioritise bills and utilities. If you don’t have enough money to pay your electricity or gas bills, you’ll definitely find yourself in a spot of bother. With this in mind, try and align your bills to come out on the same day as your rent so you can sure everything that absolutely needs to be paid for is done. This also lets you know how much money you have left for the rest of your budget plan.

A man repairing a car

3. Buffer Fund

You never know when something might go wrong, be it your car, your boiler, or even losing your job. With this in mind, one of the things everyone should strive to include in their monthly budget is a buffer fund.

This is separate to savings and is designed to be used to cover unexpected costs and bills. There is no ideal amount for a buffer fund, but ideally over $2,000 is a good place to start. This should cover most unforeseen bills or a short period of unemployment.

4. Charity Donations

Giving to charity isn’t something a lot of people prioritise when making their budget plans, but there’s good reason why you should try and weave it into your allowance, if possible. Giving to charity makes us feel good – it releases feel-good hormones called endorphins which boost our mood and can improve our self-esteem and physical health.

On top of this, the obvious benefit of donating to charity is knowing that you’re making a difference to a cause you care about, whether that’s an animal shelter or a human water appeal. It’s easy to make a difference as most charities now accept direct debits, so you won’t even notice a small monthly donation coming out of your account if you choose to set one up.

5. Treat Money

One thing a lot of people miss from their budget plan is treat money. Sure, you need to pay your bills and have some savings, but don’t make the mistake of never buying yourself anything. When you work hard for your salary, you deserve a treat each month. It might be a night out, a takeaway, some new clothes, or maybe even a new TV – whatever it is, you absolutely deserve it!

Putting money into a piggy bank

6. Savings

As mentioned, you should always reserve some money to put into savings. It might be that you’re saving for a house, a car, or for a vacation. It might also be that you have no particular reason to save up, but even if this is the case, don’t abandon your saving plans. It will come in handy one day, even if that day is far into your retirement.

Before you start funneling money away, make sure you shop around for the best saving account in order to get more for your money.


We hope you find this budget outline useful. If you already have one, what’s something you include on yours?

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