So, you’ve decided to create a personal budget…but where the heck do you start?! And maybe most importantly, what should you include in a personal budget?

Maybe you’re even asking yourself what a good budget is, what type of budget you should choose, how to categorize your personal expenses, etc… Don’t you worry – we’re going to cover all of that and more below!

How to Create an Easy to Use Budget

Types of Personal Budgets

Spend First, Think Later

The “Spend First, Think Later” method of spending isn’t one I’d recommend. It’s true that sometimes it’s better to ask for forgiveness than permission, however this tactic does not hold up with your financial habits. Reactionary habits are best left to watching movies and tv. When it comes to your personal health or financial health, think prevention and take hold of your life.

Don't Spend First and Save Later - It never works!

Pay Yourself First

Winner winner chicken dinner! YOU are a bill, YOU are a fixed expense, YOU are a priority, so handle your finances and budget with that front of mind.

There are several advantages to the Pay Yourself First budget method. First and perhaps most importantly, your buns will be covered should something go wrong (you know, something small and quick like a pandemic…). There’s nothing like a solid financial buffer to help you through rough waters. Secondly, paying yourself first establishes the healthy habit of prioritizing your well-being. Perhaps you already do this with your fitness routine, the people you surround yourself with, the time you allot to hobbies, or the food you eat. Why not consider your financial future as well? Third, delayed gratification is underrated. Get on that bandwagon, stat.

Include Paying Yourself First in your Personal Budget

Debt repayment / Savings goal

If debt is hanging over your head and weighing heavy on you, this might be the short-term budget you implement. If so, then buckle up and hunker down. I promise it’s going to feel so damn good when you see that “0”. On the other hand, you can use the same approach to hit a savings goal.

Debt consolidation may be an option you consider as well. For instance, if you have different kinds of debt – credit cards, student loans, lines of credit – then consolidating it into credit with the lowest interest rate could be a smart choice. I am not a financial expert or advisor so I’d suggest shopping around to find the best option for your situation. Why consolidate debt? For one, it can be easier to track payments. Second, it can be a more cost-effective solution when it comes to interest fees. Some disadvantages or barriers can include the state of your credit score (if it’s not high enough), potentially high interest rates (depending on the options available to you), and maybe even requiring collateral to secure the loan. Again, speak to financial professionals and do your homework to find what suits your needs.

If you’ve identified a savings goal, then wonderful! For the visual learners out there, draw a thermometer, use a mason jar, or find another creative way to track your progress. To reach a goal faster, see where you can trim your budget. Make sure that your savings category is a priority, and similar to the second type of personal budget we discussed, pay yourself first.

Pay off Your Debt and Include it in Your Personal Budget


Last, is the 50/30/20 budget method. 50% of your income is set aside for needs, 30% of your income for wants, and 20% of your income goes towards savings and repaying debt.

Choosing Your Budget Type

Whichever budget type you choose, give it an honest go (1-3 months) before determining whether it works for you. I’d love to hear what you choose below!

What to Include in a Personal Budget: How to Categorize Personal Expenses

Your budget can be as broad or specific as you’d like it to be. Often the more detailed a budget is, the easier it is to discover, track, and eliminate excessive spending.

Fixed Expenses

These are the recurring bills you have each month. Typically this means they cover life’s needs, whether that’s rent/mortgage, utilities, tech bills (phone and/or internet), car payments, debt repayments, the “oh shit” fund, and super importantly, savings.

Variable Expenses

In a nutshell, these are usually the “wants” in life and vary in amount and frequency. Some examples of variable expenses include dining out, entertainment (movies, concerts, events, etc…), gifts (wedding, birthdays, housewarmings, etc…), travel (*this could be fixed!), alcohol, shopping, hobbies, ATM or other useless fees, and so on.

Travel with TMc Budget Series Fixed and Variable Expenses

Other items that may be included in your budget include: pets, household maintenance, subscriptions, memberships, prescriptions, bank account fees (hot tip: lose these as fast as you can!), charity, union/professional dues, and so on. If there’s something you include in your budget that’s not mentioned in the post, leave it in the comments below!

It’s important to keep in mind that…

Your fixed and variable expenses might be different than what’s listed here. For example, some people list groceries or food in their fixed spending, and others place it in their variable category. Or, perhaps you buy a monthly transportation pass and don’t have gas, insurance, or car repairs that fluctuate – then transportation is a fixed bill for you. Maybe you only go to fitness classes here and there and don’t pay a monthly membership so fitness goes under your variable category then. At the end of the day, it’s really whatever works best for you.

TMc’s Budget Tip

Creating a budget can seem intimidating with the endless category options. The solution? Start simple! Make sure that you have a category for the roof over your head, the food in your body, your transportation, your savings, and any other human basics that are required to live each day. From there everything else is extra and a personal choice on whether it’s included or not. Remember, this is something made by you, for you – so do what’s best for your situation in this moment! It’s quite likely your budget will change as life continues anyhow. Happy Budgeting!

Visit Travel with TMc on Instagram to save bite-sized budget information, tips, and tricks in your pocket. Curious to know how I’ve afforded 10 years of travel and living abroad without being a millionaire? Check out how to Pay Yourself to Travel and make travel an accessible reality instead of a social media mirage.

About TMc


Me having a seat in front of one of the famous Brighton Bathing Boxes in Australia!

Heya! I’m Tara (Tar-ah)! Welcome to Travel with TMc where you’ll find quirky language tidbits, travel hacks for Canadians, and stories from the road. I hope you enjoy!
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