Before breaking down the four basic needs for budgeting, it’s important to define what a budget is.

A budget is a spending plan based on income and expenses. In other words, it’s an estimate of how much money you’ll make and spend over a certain period of time, such as a month or a year. Budgets do not determine a person’s current financial situation and it does not keep them in a financial situation that they are not satisfied with. It’s actually designed to do the opposite—to empower people by allowing them to manage their money wisely. Also, it’s important to note that budgets can always be changed! It might take a few tries to find that perfect formula just for you.

Basic Needs For Budgeting

Budgeting can involve making a comprehensive list of all of your expenses or you could focus only on your basic needs. The basic needs are food, shelter, clothing, and transportation. It is important to cover your four basic needs first when creating your budget!


Food is one of the most important basic needs because if you don’t eat, you won’t be getting the nutrients you need to live.


By having a roof over your head, it protects you from the weather, diseases, insects, animals, and more. It also can provide you with utilities such as water and lights.


Similar to shelter, clothing can insulate against cold or hot conditions. In addition, it provides a hygienic barrier that keeps infectious and toxic materials away from the body.


If you have a job or school you cannot walk to, it is important to be able to transport from one place to another. Whether it’s investing in a car or finding public transportation, you need to be able to make sure transportation is covered in your budget.

Needs Vs. Wants

After you cover the basic needs for budgeting, you can then move to focus on your wants. Wants are things you would like to have but you don’t need to survive. While you could live without them, wants allow you to enjoy your life more. For instance, while food is a need, going out to eat at a restaurant is want.

It’s also good to prioritize your wants. To help, ask yourself these questions: Does it meet a basic need like food or safety? Will it be something you could still use in five years? Does the item make you happy and will it continue to do so?

Ultimately, the best way to make sure you can afford your wants is to think ahead, be intentional with spending, and be honest with yourself on a monthly, even weekly, basis.

Budget Template

We have provided you with a budget template to help get you started! This template is an example of a zero-based budget. Zero-based budgeting is a way of budgeting where your income minus your expenses equals zero. With a zero-based budget, you have to make sure your expenses match your income during the month. Give it a try, and see how it works for you and/or your family.