Monthly Expenses for Everyone’s Budget
Key Points – Monthly Expenses for Everyone’s Budget
- America Has a Savings Problem and a Spending Problem
- Outlining What Monthly Expenses You Need to Budget for
- The 50/30/20 Rule
- Planning for Inflation
- 4-Minute Read
What Monthly Expenses Should Be Included in Your Budget?
The word “budget” can sometimes send chills down a person’s spine. Budgeting isn’t something that anyone wants to do, but we want to share a few eye-opening statistics to highlight why everyone should make a list of monthly expenses that everyone should budget for.
At Modern Wealth Management, we like to refer to a budget as a spending plan. One of the most difficult things about building a spending plan is knowing where to start. If that’s the situation you find yourself in (or if you don’t feel like your budget has been effective), we’re here to help you. Let’s start by outlining monthly expenses that everyone should budget for.
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Monthly Expenses Everyone Should Budget for
- Housing
- Transportation
- Insurance – home, car, health, pet
- Food
- Utilities
- Cell Phone
- Clothing and Hygiene
- Medical
- Travel
- Entertainment
- Subscriptions/Memberships
- Hobbies
- Charity
- Legacy
- Debt – credit, mortgage, student loans, cars
- Emergency Fund
- Retirement Savings
Monthly Expenses That Many People Need to Budget for
- Childcare / Schooling
- Pets
Categorizing Your Monthly Expenses
It’s important to be aware of your various monthly expenses. You might even have a few more monthly expenses that we didn’t list that are unique to your situation. Looking at a long list of your monthly expenses can feel overwhelming, so let’s categorize your expenses so you can attempt to organize your financial life.
Needs
- Housing
- Transportation
- Food
- Utilities
- Cell Phone
- Clothing and Hygiene
- Childcare/Schooling (if applicable)
- Pets (if applicable)
- Insurance
- Medical
Wants and Wishes
- Travel
- Entertainment
- Subscriptions/Memberships
- Hobbies
- Charity
- Legacy
Paying Down Debt/Building Savings
- Debt – credit, mortgage, student loans, cars
- Emergency Fund
- Retirement Savings
The 50/30/20 Rule
Let’s break those categories down a little bit further. Some of you may have heard of the 50/30/20 rule. The concept of the 50/30/20 rule is to set aside 50% of your post-tax income for your needs, 30% toward your wants/wishes, and the remaining 20% toward savings and paying down debt.
Think back on the savings and debt statistics we shared at the beginning of the article. It shows that people may be struggling with the 20% part of the 50/30/20 rule.
Should It Be the 60/30/10 Rule?
It’s no secret that inflation has been one of the root causes as to why many people have accrued more debt and haven’t prioritized saving. As you’re mapping out your monthly expenses, keep in mind that most of those costs will change over time. Many of your monthly expenses likely cost quite a bit more than they did a few years ago. So, should the 50/30/20 rule be the 60/30/10 rule now?3
That answer depends on your unique situation. Rules of thumb such as the 50/30/20 rule are intended to serve as guidelines that could potentially be helpful rather than as instructions that you must follow.
Planning for Inflation
As you’re determining your monthly expenses and how much they cost, make sure to factor inflation into the equation. Your mortgage rate (if you’re a homeowner) is likely one of your largest monthly expenses. However, your mortgage rate is also fixed, meaning it won’t inflate. Just remember that your mortgage is only one component of your housing expenses. General maintenance such as plumbing, appliance maintenance, cleaning, and landscaping are monthly housing expenses to budget for as well. There are also larger housing expenses, such as a new HVAC unit or a new roof, that could need to be replaced unexpectedly. That’s why it’s crucial to have an emergency fund.
While your mortgage is at a fixed rate, most of your other monthly expenses to budget for will vary. They’ll also inflate at different rates. Take medical costs (services, medical equipment, drugs, and insurance) for example. Those expenses inflated 119.2% from January 2000 to March 2024 according to the Peterson-KFF Health System Tracker’s May 2024 study.4 The costs of consumer goods and services inflated by 85% over that same period.
Your Spending Plan Is a Key Component of Your Overall Financial Plan
We hope that you’re accounting for the monthly expenses that we believe everyone should budget for. Make sure to assess which monthly expenses should be classified as needs and which ones should be classified as wants/wishes. Do you need to temporarily cut back on some of your short-term wants/wishes so that you can accomplish your long-term goals? As you’re saving for retirement, how are you supposed to know when you’ve saved enough?
Creating a forward-looking financial plan that includes a spending plan that’s been stress tested for inflation may provide some much-needed clarity as you’re trying to answer those questions. We want you to have confidence that you’re making informed decisions with your money, freedom from financial stress, and time to spend doing the things you love. That’s why we decided to write this article on monthly expenses everyone should budget for and other educational content such as our Retirement Plan Checklist, which you can download below.

We don’t want any of your monthly expenses to slip through the cracks and potentially derail your financial objectives. Start a conversation with our team to learn how we can help you with building a financial plan that’s tailored toward your specific needs, wants, and wishes.
Monthly Expenses for Everyone’s Budget | Watch Guide
00:00 – Introduction
01:46 – Redefining Budget
05:56 – Why Americans Need a Budget
07:02 – The 50/30/20 Rule
08:58 – Budgeting Near Retirement
14:11 – Savings Rates and Retirees
17:07 – Pay Yourself First
19:25 – Start Building Your Wealth
Resources Mentioned in This Article
- 7 Money Management Tips to Consider
- Setting Up a Spending Plan for Retirement
- 10 Ways to Fight Inflation in Retirement
- Retirement Rules of Thumb: Let’s Bust Them
- Mortgage Tips for Different Phases of Life with Tim Kay
- Unexpected Expenses and How to Plan for Them
- Short-Term, Mid-Term, and Long-Term Financial Goals
- Have I Saved Enough to Retire?
- Components of a Complete Financial Plan with Logan DeGraeve, CFP®, AIF®
- Stress Testing Your Financial Plan
Downloads
Investment advisory services offered through Modern Wealth Management, Inc., a Registered Investment Adviser.
The views expressed represent the opinion of Modern Wealth Management a Registered Investment Advisor. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Modern Wealth Management does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.