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Here is the list, with the percentage of take-home pay each line should get. Thirteen groups, fifty lines, allocated 55% essentials / 25% lifestyle / 20% future. The percentages add up to exactly 100, which sounds like a low bar until you add up the ranges on a published category table and find the top of every band sums to well over that.
The target allocation, on $5,200 a month take-home
Thirteen groups rolled up to eight. The shares sum to 100% by construction.
- Housing25%25%
- Lifestyle (all discretionary)25%25%
- Retirement and named goals12%12%
- Groceries9%9%
- Transport9%9%
- Emergency fund and extra debt8%8%
- Health and protection insurance6%6%
- Utilities and connectivity6%6%
Show the data
| Category | Value | Share |
|---|---|---|
| Housing | 25% | 25% |
| Lifestyle (all discretionary) | 25% | 25% |
| Retirement and named goals | 12% | 12% |
| Groceries | 9% | 9% |
| Transport | 9% | 9% |
| Emergency fund and extra debt | 8% | 8% |
| Health and protection insurance | 6% | 6% |
| Utilities and connectivity | 6% | 6% |
The list, ready to paste
Select the block below and paste it into a spreadsheet. In Google Sheets and Excel, use Data → Split text to columns (or Text to Columns) on the comma. The Type column is what makes this list useful: Fixed is the same every month, Variable moves with behaviour, Sinking is an annual or irregular cost you divide by 12, and Saving is money leaving for a future you.
Group,Category,Target % of take-home,Type
Housing,Rent or mortgage payment,20,Fixed
Housing,Property tax / council tax / rates,2.5,Fixed
Housing,Home or contents insurance,1,Sinking
Housing,Service charge / HOA / body corporate,0.5,Fixed
Housing,Maintenance and appliance replacement,1,Sinking
Utilities,Electricity,2,Variable
Utilities,Gas or heating oil,1,Variable
Utilities,Water and sewerage,1,Fixed
Utilities,Broadband,1,Fixed
Utilities,Mobile phone,1,Fixed
Groceries,Supermarket shop,7,Variable
Groceries,Household and cleaning supplies,1,Variable
Groceries,Toiletries and everyday basics,1,Variable
Transport,Car payment or lease,3,Fixed
Transport,Fuel or charging,2,Variable
Transport,Vehicle insurance,1,Sinking
Transport,Registration / road tax / inspection / MOT,0.5,Sinking
Transport,Servicing tyres and repairs,1,Sinking
Transport,Public transport and parking,1.5,Variable
Health,Health insurance premium (post-tax portion),2,Fixed
Health,Prescriptions and medication,0.5,Variable
Health,Dental,0.75,Sinking
Health,Optical,0.25,Sinking
Health,Therapy and other treatment,0.5,Variable
Protection,Life insurance,1,Fixed
Protection,Income protection or disability cover,0.75,Fixed
Protection,Pet insurance,0.25,Fixed
Eating out,Restaurants,2,Variable
Eating out,Takeaway and delivery,1.5,Variable
Eating out,Coffee and lunches at work,1.5,Variable
Entertainment,Streaming video and music,1,Fixed
Entertainment,TV licence or pay-TV,0.5,Sinking
Entertainment,Cinema events and concerts,1,Variable
Entertainment,Gaming books and hobbies,1.5,Variable
Personal,Hair and grooming,1,Variable
Personal,Cosmetics and skincare,0.5,Variable
Personal,Clothing and shoes,2,Variable
Personal,Gym and fitness,0.5,Fixed
Travel,Main holiday fund,3,Sinking
Travel,Short breaks and weekends away,1,Sinking
Travel,Visiting family,1,Sinking
Gifts,Birthdays,0.5,Sinking
Gifts,December / Christmas fund,1,Sinking
Gifts,Weddings and other occasions,0.5,Sinking
Gifts,Charity and donations,1,Fixed
Flex,Unallocated buffer,4,Variable
Future,Emergency fund,5,Saving
Future,Retirement,10,Saving
Future,Extra debt payments above minimums,3,Saving
Future,Named savings goal,2,Saving
Four lines are deliberately outside the fifty because they apply to some households and not others: childcare, children's activities and school costs, student loan repayments beyond the automatic deduction, and support paid to a parent or ex-partner. Where those come from matters more than what you call them, so there is a rule for that further down.
Where the percentages come from
Take-home pay is the denominator throughout — the money that actually lands in your account, after tax and after anything deducted at source.
The three-way 55/25/20 split is a deliberate adjustment to the 50/30/20 rule. Fifty per cent on essentials is a clean number, but it is not what households manage. The Bureau of Labor Statistics Consumer Expenditure Survey puts housing alone at 33.4% of what the average US household spent in 2024, with transportation at 17.0% and food at 12.9%. Add those and you are at 63% before healthcare. Five points moved from wants to needs is closer to reality without abandoning the discipline.
What US households actually spend, by share of the budget
Top ten of the fourteen major components, 2024
Source: US Bureau of Labor Statistics, Consumer Expenditure Surveys, Table B, USDL-25-1586, published 19 December 2025
Now reconcile that against the list. My housing target is 25% and utilities is 6%, which reads as far below the BLS 33.4% — until you notice the BLS housing line bundles utilities, furnishings and household operations into one component. Add my housing (25) plus utilities (6) and the maintenance and household-supplies lines (about 2) and you land at roughly 33%. The targets and the survey are describing the same thing in different boxes.
The UK picture from the ONS Family Spending survey for the year to March 2025 works the same way. Housing (net), fuel and power was £118.40 of £676.60 weekly spending — 18%, the biggest single item in the UK budget. But ONS files mortgage interest (£30.40) and council tax (£32.30) under "other expenditure items", not housing. Put those two back and housing-related costs reach about £181 a week, or 27%. The published 18% and the reconstructed 27% describe the same money with a different fence around it. That is exactly why a category list needs definitions, not just names. It is also why the country figures below should not be read as a ranking: housing, transport and food take 63.3% of spending in the US and 63.6% in Canada against 42.6% in the UK on the published categories, and the three surveys count different spending units over different periods with different homes for housing costs.
Three honest caveats about the numbers above:
- Share of spending is not share of income. BLS reports average pre-tax income of $104,207 against $78,535 of spending, so the average household spends about 75 cents of every pre-tax dollar. The two denominators are within a few points of each other for most people, but they are not the same measure.
- Both figures are means, not medians. BLS spending ranges from $35,046 a year in the lowest income fifth to $150,342 in the highest. The average household is a statistical artefact.
- BLS counts "consumer units", not households. A consumer unit is close to a household but not identical — it splits on who shares expenses, so roommates paying separately count twice. Read the US shares as approximate.
- ONS averages include outright owners who pay no rent or mortgage, which drags the housing figure down for everyone still paying one.
Housing is where the list stops being universal
Housing's share of the household budget
Housing as a percentage of household spending, most recent published survey
- USUnited States33.4%of total spending, 2024BLS Consumer Expenditure Survey
- CACanada32.1%shelter, share of goods and services, 2023Statistics Canada, Survey of Household Spending
- IEIreland18.3%housing, 2022-2023CSO Household Budget Survey
- UKUnited Kingdom18.0%housing (net), fuel and power, FYE 2025Office for National Statistics
Four lines in the list have different names, different mechanics and different sizes depending on where you live. Rename them once and the rest of the list works anywhere.
| Line in the list | United States | United Kingdom | Canada | Australia | Ireland |
|---|---|---|---|---|---|
| Property tax / council tax / rates | Property tax (paid, or escrowed with the mortgage) | Council Tax; domestic rates in NI | Property tax | Council rates | Local Property Tax |
| Health insurance premium | Employer plan premium, deductible, copays, HSA | Prescriptions, dental, optical; private cover optional | Provincial plan plus dental and drug top-ups | Medicare levy plus optional private cover | Health insurance plus GP fees |
| Vehicle compliance | Registration, plus state emissions or safety inspection | Vehicle Excise Duty and the MOT test — two separate annual costs | Provincial registration and plates | Registration and compulsory third party | Motor tax and NCT |
| Retirement | 401(k) to the full employer match, then Roth IRA, then HSA | Workplace pension at least to the employer match, then SIPP or ISA | RRSP and TFSA | Superannuation, plus salary sacrifice | Occupational pension or PRSA |
The healthcare gap is the one that will wreck a copied budget. Healthcare took 7.9% of the average US household budget in 2024, of which $4,055 of the $6,197 was insurance premiums. The equivalent ONS "Health" category in the UK was £11.90 a week — 1.8% of spending. A 4% target line is roughly right for a UK, Irish or Australian household. A US household paying premiums out of post-tax income should set health to 8% and take the four points out of Lifestyle, not out of Future.
One clarification on the retirement row: if your premium or pension contribution is deducted from your paycheck before you see the money, it is already excluded from take-home pay and should not appear in the list at all. Budget only what actually leaves your bank account.
Sinking funds: the reason category budgets fail
Fourteen of the fifty lines are marked Sinking. This is the single most useful mechanic in the list and the one most category lists skip entirely.
A sinking fund is an annual or irregular cost divided by twelve and set aside every month, so the bill arrives against money that is already there. Two real examples:
- UK TV licence. A colour licence costs £180 a year from 1 April 2026 (TV Licensing). That is £15 a month. Budget it monthly and the April renewal is a non-event.
- US car insurance. US drivers spent an average of $1,281 a year per insured vehicle in 2023 (NAIC Auto Insurance Database Report, published February 2026 — the series runs with a long lag). That is $107 a month. Pay it as a lump sum from a month's ordinary income and that month's budget breaks.
The test for whether something belongs in a sinking fund is simple: does it arrive less often than monthly, and would paying it out of one month's income hurt? If yes, divide by the number of months between payments and treat the result as a fixed cost. Christmas is the classic case — a December fund started in January at 1% of take-home is the difference between a good month and a January credit card balance.
Sinking funds also work better in a separate account or pot than as a mental note, which is the whole idea behind the envelope system in its modern form.
How to build your own list
From fifty lines to your list
- Start with the thirteen groupsNot the fifty lines. Groups are what you set limits on; lines are what you tag transactions with.
- Delete what does not applyNo car, no pets, no service charge — cut them and redistribute those points to the group under most pressure, usually housing.
- Add your conditional linesChildcare, school costs, support payments. Fund them from Lifestyle first, then from Future down to the employer match — never from Essentials.
- Run it for one month, then splitWhichever group you blew through gets split in two. 'Food' becomes groceries and eating out; 'Transport' becomes fuel and everything else.
- Re-check the totalAfter every edit, sum the column. If it is not 100, the plan is not a plan yet.
That fourth step is the one that pays. Splitting a category is a diagnostic, not an admin task. If you overspend on food every month, one number tells you nothing; groceries at 9% and eating out at 5% tells you which behaviour to change. Do this in your weekly budget review rather than waiting for the month to end.
How many groups should you end up with? Ten to sixteen is the range that survives contact with real life. That is a design recommendation rather than a research finding, and the reasoning is worth stating plainly: fewer than eight and a group like "living expenses" is too coarse to act on — you cannot cut what you cannot see. More than twenty and every transaction becomes a filing decision, which is the point at which most people quietly stop. The fifty lines exist so you can tag precisely; the groups exist so you can decide.
Income categories, which most lists forget
A category list that only covers spending is half a list. Track income by source, not as one lump:
- Regular net pay — the number the percentages above are calculated on.
- Variable pay — overtime, commission, bonus, tips. Budget on your floor, not your average.
- Second income or side work — kept separate so you can see what it is actually contributing.
- Benefits and credits — child benefit, tax credits, housing support.
- Irregular inflows — tax refunds, gifts, cashback, sale proceeds.
Splitting these matters most if your income moves. If more than about a fifth of your income is variable, run the percentages on your lowest month of the last twelve and treat everything above that as a windfall to be allocated on arrival — the approach set out in the irregular income guide.
Where this method breaks
- Low income. Below a certain point the percentages are arithmetic fiction. If rent is 45% of take-home, no reallocation makes housing 25%, and pretending otherwise wastes an evening. Set essentials at whatever they genuinely are, protect a small emergency fund, and treat the remainder as the real budget.
- Expensive housing markets. London, San Francisco, Sydney, Dublin, Toronto. Housing will take considerably more than 25% and no amount of reallocation changes that. Take the extra points out of transport first, which tends to be lower where housing is dense, then travel.
- Debt at high interest. If you are carrying revolving credit above roughly 20% APR, the 3% "extra debt" line is too small. Move points from Future's named-goals line and from Lifestyle, and follow a payoff order rather than spreading it — see snowball versus avalanche.
- The first three months. New categories are always wrong. Track actuals for a quarter before you trust any target, including these.
- Emergency fund sizing. The 5% line is a rate, not a destination. Three to six months of essential costs is the usual target, and the emergency fund guide covers how to set yours. As a scale check on how far most households are from that: 63% of US adults said they could cover a hypothetical $400 emergency with cash or its equivalent in 2025 (Federal Reserve SHED) — a figure that has not moved since 2022.
Frequently asked questions
How many budget categories should I have?
Ten to sixteen groups, subdivided into as many individual lines as you like. Groups are where you set limits and where you look when something goes wrong. Lines are just tags. Having fifty lines inside thirteen groups is easy to maintain; having fifty separate limits is not.
What percentage of income should each category get?
Housing 25%, groceries 9%, transport 9%, utilities 6%, health and protection 6%, all discretionary spending 25%, and 20% to the future. That is the full 100%. The single most common error in published category lists is publishing ranges that cannot simultaneously be satisfied — check that whatever list you use sums to 100 at its midpoints.
Should groceries and eating out be separate categories?
Yes, and it is the highest-value split on the list. A combined "food" number cannot tell you whether you are buying too much or eating out too often, which are opposite problems with opposite fixes.
What is a sinking fund and which categories need one?
A sinking fund is an irregular cost divided by the months between payments and set aside monthly. Fourteen of the fifty lines here qualify: insurance renewals, vehicle tax and inspection, servicing, dental and optical, holidays, Christmas and other occasions, home maintenance, and the TV licence for UK readers.
Where to go next
- the complete budgeting guide — the full system these categories slot into
- zero-based budgeting — the method that forces the column to sum to 100 every month
- auditing your subscriptions — the fastest way to shrink the entertainment group
- budget calculator — put your take-home in and see the split in your own currency
Put this into practice
iBudget turns the list above into something you actually track: your own categories, monthly limits, and a running picture of where the money went.
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