What Are The 4 Walls Of A Budget?

It is easy to get lost in your own budget. Focus on what is important and protect your “4 walls.” The four walls each represent a specific section in your budget every month. Covering these four basics in your budget will help ensure stability in your overall financial status. Just like how the four walls in your house keep you safe by holding up the roof over your head, the “4 walls” in your budget do the same.

Food

Food is the most fundamental need for both your finances and your health. Without a set monthly spending plan, food expenses can add up quickly. First, let’s set this straight; restaurants, while they are delicious, are not a necessary component of this wall, but groceries are. The average home cooked meal costs around $4-$6 dollars per person, while a restaurant meal can cost around $15-$20 dollars or more depending on the place. That’s an extra $10 dollars a meal that could be reduced from eating out less frequently and utilizing more home cooked meals. A few ways to help reduce food costs include:

  • Buy in bulk
  • Limit eating out
  • Plan your grocery shopping and write a list

Note: Groceries and eating out should be separate budgets.

Shelter/Housing

You need a roof over your head. Typically the largest expense in your budget, shelter/housing includes expenses like rent, mortgage payments, and house insurance. Along with making sure you have enough money to cover these costs, it is also important to set aside funds for home maintenance repairs for when the unexpected happens. If these costs are becoming too much for you to handle, it may be time to consider downsizing or getting a roommate to help cover costs.

Utilities

Next up, utilities - aka the expenses that keep your house running. Water, electricity, internet, and your phone are just a few of the most common utilities. Budgeting accurately for utilities is important for your daily life. If this category is taking up too much space in your budget, you can take some small steps to reduce your utility costs by using less hot water, adjusting your thermostat, taking shorter showers, and more.

Transportation

The last of the four walls is transportation. This expense looks different for everyone, but encompasses:

  • Gas
  • Vehicle maintenance
  • Registration fees
  • Car insurance
  • Public transportation fees (such as the bus)

However you travel, there are always slight changes you could make to help reduce this cost. For some that may mean biking to work, or others maybe carpooling with coworkers. You can also plan your trips in advance to reduce the amount of times you go into town. Your travel costs can be lowered by being more aware and considerate of them.

By focusing on the “4 walls”, you are laying down a strong foundation for your budgeting journey. The main thing to remember is to put the essentials first and then if you have wiggle room left in your budget, you can spend more in other miscellaneous categories.