James DiLellio Shares Expert Budgeting Advice in WalletHub

Budgeting effectively is key to maintaining financial stability, but determining the right categories can be challenging. In a recent WalletHub feature, James DiLellio, a decision sciences faculty member at Pepperdine Graziadio, shared insights on how individuals can better organize their expenses and avoid common budgeting pitfalls.

DiLellio emphasizes that budget categories should be based on significant recurring expenses, which can be identified by reviewing bank or credit card statements. Essential categories typically include travel, food, transportation, utilities, insurance, rent/mortgage, and entertainment. However, many people overlook less frequent expenses, such as holiday purchases, which can lead to budget shortfalls if not accounted for.

While having clear budget categories is important, DiLellio warns against over-complicating the process. “If an expense is less than 3-5% of total expenses, it could be lumped into a ‘miscellaneous’ category,” he advises.

To streamline budgeting, DiLellio recommends leveraging tools offered by banks and credit card providers, such as year-end summaries that automatically categorize spending. By utilizing these resources, individuals can simplify their financial planning and stay on track with their financial goals.

Read more here.