I'm 22 and about to graduate from college in Chicago, Illinois with a bachelor's degree in a few months, and I'm creating a detailed budget based on my anticipated expenses. After significantly overestimating these expenses, my salary is completely gone, but I'm very confident that there are some expenses I must be missing.

So far, I've included these expenses:

  • Rent
  • Electricity
  • Public transportation expenses
  • Internet
  • Total taxes (estimated at 30% of my gross income)
  • Medical insurance premiums
  • Food
  • Other side purchases, e.g. entertainment, clothing, etc.
  • Charitable donations
  • Roth IRA contributions (the maximum $5,000 per year)
  • 401K contributions (the maximum 6% my company will match)
  • Emergency fund / general savings

I have not included the fact that several of these expenses are deducted from my income pre-tax, which should reduce my overall tax burden. These are the expenses I'm not including:

  • Heat, water, or cooking gas. These are included in my rent.
  • Car-related expenses. I don't own a car and I have no plans to purchase one
  • Family expenses. I'm single with no plans to start a family
  • Home ownership expenses. I don't own a home.
  • Phone expenses. My workplace covers all of these.
  • Cable/satellite TV bills. I don't own a TV.
  • Outstanding credit card debt. I have none.
  • Outstanding student loan debt. I have none.
  • Costs of furnishing my new apartment. These are already covered by my savings.

What are the primary expenses I should include apart from these?

  • 1
    I'd add "clothes". Everyone will need to buy clothes, they wear out over time. Nov 17, 2012 at 0:30
  • @JoeTaxpayer Clothes are already included in my list, under "other." Nov 17, 2012 at 1:22
  • 2
    Sorry, missed it, when you have a wife and daughter, it's a full line item, can't be grouped. But for you, it makes sense to do so. Nov 17, 2012 at 1:36

4 Answers 4


Do you need such a detailed budget? I have found that a detailed budget creates two problems:

  1. It becomes inaccurate faster, as there is more room for mistakes
  2. It doesn't get updated or maintained because it is a lot of work.

I would suggest starting simple, and adding complexity as you discover you need it. Create a budget with just a few categories

  1. Income. (Of whatever type)
  2. Required Expenses. I break mine down
    • Utilities
    • Loans
    • Rent
    • Food (dining out, groceries, work lunches)
  3. Optional Expenses. This is the one I don't get into details. Maybe I want to see a movie, go out to a bar, or buy a new couch.
  4. Savings / Retirement. I can skip "retirement" because it happens out of my paycheck automatically.

Then, I enforce my budget with my auto deposit.

My required expenses, which I have a pretty good notion of the total amount get paid from one online bank. Enough money goes in and I electronically pay.

Retirement money and e-fund money get deposited into the brokerage and credit union where I keep those piles at.

Finally, my optional expenses go into a second bank (I am using simple.com at the moment) and I spend from there with a card. They have a nice reporting feature, and if I want to save up for a toy or something I save up there. Bonuses and other extra income end up there as well. This way, I really only have to monitor the last account to see if I can have fun or buy a new item. My bills and retirement are different pools of money, and I don't carry around a card that can access that money.


Your list seems fairly complete. Try tracking a few months of actual expenses. You could do this with an Excel Spreadsheet.

Personally, I pay for most things electronically and/or with a credit card (which I pay off in full every month). I use Mint.com to catalogue my transactions and get an instant snapshot of where I've been spending my money.

  • I definitely plan to track my expenses with Excel. I pay for almost everything using my credit card, which adds a negligible amount of income through earned cash back, so ideally after a few months I'll have a better idea of where the money is going. Nov 16, 2012 at 20:23
  • I like the Excel tracking approach. I'd caution, though, it takes a full year to cycle through some seasonal items, and even then, for the homeowner, you need to plan for the replacement appliances, A/C, Furnace, etc. Even then, a year of the winter plowing bill might vary quite a bit depending on snowfall, and summer water bill depending on rain. These last two bill can range from $100 to $1000 each for us. Nov 19, 2012 at 18:30
  • @JoeTaxpayer Since I'm not a homeowner, most of those expenses will not apply to me. Appliance replacement expenses are covered as part of my rent, and water and plowing bills are included in my rent and city taxes, respectively. Nov 28, 2012 at 14:31
  • 1
    John - no problem. my response was more for the (homeowner) reader who wanted to apply Pete's suggestion. I realize these items won't be on your list, but are components of the general budget list. I believe 68% of us are homeowners. Nov 28, 2012 at 15:01

Regarding Medical insurance premiums - The premiums are only part of the cost. You need to know if you have a deductible, your out of pocket maximum and what co-pays you have. If you take medications on a daily basis you need to account for those costs. Some programs allow you to put money aside pre-tax to pay for these known expenses.

I would split Emergency fund / general savings into two lines. You can set a goal to save X months worth of expenses as an emergency fund, but the general savings will be whatever is left over from the rest of your budget. Unless you have a goal for the savings: car, home...


I would add one thing, renters insurance. It shouldn't be terribly expensive, but having to replace all of your belongings could be.

  • Depending on how one wants to organize things, that could fall under rent. It's generally not optional; landlords generally require it as a condition of renting. Nov 15, 2018 at 18:03

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