Gather Little By Little has this post – Personal budget categories – the key to tracking your money.

A snippet:

Personal budget categories are a way of grouping your expenses so you can track where your money is going each month.  When creating a budget, you’ll allocate a particular amount of money to a category then track your expenses against it.  Once your expenses meet the amount allocated in that category, you have no more money to spend in that particular category.

The GLBL Guy then gives some examples of typical household budget categories.

Now, how detailed of a category list do you need?

The answer to that question will be based on what answers you will be seeking out later.

For example: if it’s important to you to be able to see how much you spent on Christmas gifts separate from your “other gift” budget (think birthdays …), then set up your category list accordingly.

And I always have split up “dining out” and “candy and pop” (think vending machines) from the “grocery” food expenses. Do keep in mind that if you cut back expenses on the dining out, your grocery bill will increase, but the overall total on those three categories will be lower.

By the way, I really love this comment from one of GLBL Guy’s readers:

When we pull up the budget report from our personal finance software, it is easy to see where we need to cut back. It was amazing the first time I used this feature to counter my husband’s plaintive “But we don’t spend that much! Where are we supposed to cut back?”