Skip to content

3. List Categories and Determine Frequency

Playback speed:
Transcript

In this video, you will list categories for each kind of expense, such as food, entertainment, and others.

You will then classify each expense by how frequently it occurs.

Categorizing your expenses makes it easier to see what you are spending your money on.

It can also help you identify areas where you could spend less and save more.

To begin, take a few minutes to think about how you might categorize your spending.

Categories are more general than the specific items, so you may have multiple items in the same category.

For example, the items Movie Tickets and Cable Bill both fall into the category Entertainment.

Categorize each expense item by typing the category name in the corresponding row in column C.

Use any categories you like.

Just make sure you apply a category to each item.

After you categorize all your expense items, determine the frequency of each expense, or how often it occurs.

Expenses can be recurring or non-recurring.

Recurring expenses are those that occur on a regular basis.

For example, rent is a recurring expense because you have to pay it every month.

Purchasing a stroller is a non-recurring expense because it’s a one-time payment.

When making financial decisions, it’s helpful to know if an expense is recurring.

For instance, if you can reduce a recurring expense such as rent, you will save money every month.

The total savings when calculated on a yearly basis may be significant.

If you are buying a less expensive stroller, it's only a one-time purchase, and what you save may be much less significant.

Classify each expense item as recurring or non-recurring in the corresponding row in column D.

Good work!

Now that you’ve listed categories for your expenses and determined their frequency, move on to the next video to create column headings.

Now, it’s your turn. Create categories for your expenses, and determine the frequency of your expenses.

Next

Instructions

  1. Create categories for your expenses.
  2. Determine the frequency of your expenses.