
💡 Step-by-Step: Budgeting for Necessities
1. Know What “Necessities” Are
Necessities are your must-haves—things you can’t live without or function properly without. These typically include:
Housing: Rent or mortgage Utilities: Electricity, water, gas, internet, phone Food: Groceries (not takeout) Transportation: Gas, bus/train fare, car maintenance Insurance: Health, car, renter’s/home Basic healthcare: Prescriptions, co-pays Childcare or school-related expenses (if applicable)
2. Use the 50/30/20 Rule (as a starting point)
50% of income → Needs (necessities) 30% → Wants 20% → Savings and debt repayment
Let’s say your monthly income is $3,000
→ 50% = $1,500 for necessities
3. Make a Necessities List With Actual Numbers
Category
Monthly Amount
Notes
Rent/Mortgage
$1,000
Try to keep this < 30% of income
Utilities
$150
Gas, electric, internet, phone
Groceries
$300
Shop with a list & meal plan
Transportation
$100
Fuel or public transit
Insurance
$120
Health & car
Medical/Health
$50
Prescriptions, co-pays
✅ Total: $1,720 (You may need to adjust categories if over 50%)
4. Track & Adjust
Use budgeting tools like Mint, YNAB, or even a spreadsheet Track every dollar for 30 days to spot overspending Cut back where possible (e.g., negotiate bills, switch providers)
5. Tips to Stay on Budget
Meal plan to avoid food waste and takeout Bundle services (like internet + phone) Use auto-pay to avoid late fees Set limits on utility usage (like energy-saving habits)
Leave a comment