What should be included in the “wants” category of a budget?

The “wants” category of a budget encompasses expenses that enhance your lifestyle but are not essential for basic survival or security. Entertainment fits perfectly into this category as it includes activities like dining out, movies, vacations, and hobbies that bring enjoyment but can be considered discretionary spending.

Understanding the classification of expenses is crucial for effective budgeting. "Wants" are generally non-essential, meaning that while they may contribute to your happiness and quality of life, you can live without them if necessary. This distinction allows individuals to prioritize their spending and make informed financial decisions.

In contrast, shelter, groceries, and utilities are typically classified as "needs." These are fundamental expenses necessary for maintaining a basic standard of living. Recognizing the difference between needs and wants helps in effective financial planning and aids individuals in making choices that align with their financial goals.