How Many Budget Categories Do You *Really* Need?

If you’ve got 192 budget categories, budgeting can take forever. 😖 It's annoying to have to scroll through an endless list of categories to find the one you want, BUT! it doesn’t have to be this way! Today, Ashley is sharing three different tactics you can use in your own budget to find your category sweet spot.

Here is our first tip to help you decide how many categories you need in your budget - save in specific categories; spend in general ones.

Your savings could pay for your next computer, a house project, a pair of running shoes, or a new car. Whatever you’re saving for, it’s motivating to know that you’re chipping in for a future purchase that will make your life better—and being specific is what’s so motivating!

Next, split transactions. Here’s our disclaimer, especially if you are new to budgeting, don’t make your budget require so much effort that you quit.

If you are spending more time sorting through Amazon and Target purchases than you are on your financial goals, simplify! YNAB wants to help you see the big picture and get you excited for the future, not create more busy work in your life.

So before you breakdown your Costco receipt, ask yourself, “Is it actually useful to know how much money I budgeted for fancy cheese or personal care products?” Maybe knowing exactly what you spent on toothpaste so far this year isn’t that important. There you go! An easy area to simplify.

Another tactic is to combine categories. Some YNABers combine their streaming services. Instead of having separate categories for Netflix, Disney+, Hulu, and Spotify, you could have one called “Streaming” and use the notes area to keep yourself organized. The idea isn’t to combine everything, it’s to find like categories that go well together.

Remember that your budget is a living, breathing thing. Life changes, and budgets should, too. Don’t feel like you have to get it perfect right now—these aren’t permanent decisions. Play with it!

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Timestamps -

0:00 - Intro
0:30 - Save in Specific Categories; Spend in General Ones.
1:34 - Be Mindful with Split Transactions
2:34 - Combine Categories If It Makes Sense
3:38 - Revisit and Revise

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[PlaninProgress]

When I can’t budget actual cash, fiddle-faddling with the categories is the next best thing! I ❤️ YNAB

[DwayneBrown]

When I heard 192 categories, I laughed out loud and mocked such persons... BUT then I checked on mine, 102 (=

[Laurenr]

I struggle with this so much. I think I need to sit down and really look at what categories I need vs. which ones are just cluttering up my brain. Thank you for the tips!

[laurenpool]

2:51 brilliant...lumping all streaming services together. Exactly what I was looking for. Thank you!! Btw, you are a lovely speaker, and I truly enjoy your videos

[kukurukuru]

I want to say my favorite part of this video is the video game per usual, but the highlight is truly that you can crop a video. 🤣🤣🤣 I can only imagine the conversation that followed this.

[mirainoivuyo]

I think spending in specific categories is good for those things you really want to get a handle on. For me, that category was coffee. For all my set monthly expenses, that's just one big general category.

[heathermiracle]

Confess that you have that cat wheel as well (I wanted to write that "as wheel" but I don't think YNAB is ready for my pun game 😂)

[oliviabrumleve]

Great video!! So useful for new budgeters! Ashley, are you going to start uploading videos on your personal channel again? I miss your planner chats and makeup videos!! Happy you're at YNAB, but miss your personal channel.

[Luvsread]

I used to have a combined living expenses category but I had to split it up. I tend to overspend in groceries and household items and health/beauty aids so all of them combined ended up leaving me in a bind at the end of the month and my cats needed food or litter so I definitely had to split them up. I then had to further split groceries into weeks. Maybe someday I’ll stop overspending and be able to have the simple budget of my dreams. 🤷🏻‍♀️

[MineMineMineMineMineMineMine]

I love when you open the drawer and you get a sneak peek of the Pokemon Go Plus device hehe.

[bradfranklin-jco]

0:30 how many categories strategy - save in specific categories, spend in general ones
1:30 creating a wish farm? Link to
1:40 don’t make budgeting so much effort that you quit
2:36 too many categories; list too long
2:44 pin categories to top / combination categories (streaming bills)
4:00 simply where you can; will adding category change my behavior

[christinemitchell]

Please share more about how you split your groceries categories up by week. Do you set an automated goal for each week and if so how does that work for 5 vs 4 week months??? Inquiring minds want to know 🤔

[JustJoia]

I definitely add and subtract categories a lot of times. I just try to keep it simple. Because doing a split transaction will annoy me quickly. 😂😂

[asdfssdfghgdfy]

This is an each to their own thing, but I’d rather have more categories, especially for subscriptions which I change more often.

[trmtnzr]

Arent you essentially explaining a wish farm with the pots&pans example?

Also, I found that “getting exited while saving” just doesnt work for me. I end up buying stuff when I need it, not when my budget allows for it (rule 3 🤪🤷‍♂️).
Instead I started collecting/storing money in one general “All the irregular stuff that pops up unpredictable” and use that to move money to the appropriate category when buying pots, knives, shoes, clothes, the new tent i forgot i need for my vacation 🙈, and so on. I know that money doesnt _really_ has a job, but i figured it works for me.

That way i got some money i can use where necessay and only need to use my wish farm to the big stuff. It kinda replaces S&M wishes. (I limit myself to the money in that cat - when its empty, i need to wait/save)

[FeliciaWilliams]

I admit that I have Amazon and Target categories along with all my streaming services separate. I am hoping to figure out if I really need all those categories. Very helpful video.

[ninopornea]

Woah is that a pogo plus in the drawer 🤩

[elizabethmellen]

Lol I always thought that I love “too many” (I don’t find splitting orders too difficult, and when things are lumped I sometimes forget where all it’s gonna need to go) but I “only” have 90 😂😂

Example : if I have $200 left in groceries but really that’s anything at the grocery store, and I think hmmm that’s enough for the last week for sure. But then we have $125 in groceries, realize we’re out of detergent and TP, and need a few misc toiletries, it might not be and I maybe shouldn’t spend the entire $125 I was planning on food

[fedos]

"How many budget categories do you *really* need?"

I don't know. How many do ya got?

[geovanrich]

This title makes me feel attacked lol. Thank you for the videos