What must be budgeted based on an approximation of the previous month's expenses?

When budgeting based on the previous month's expenses, it's important to consider fixed costs such as rent, utilities, and salaries, as well as variable expenses like groceries, entertainment, and transportation. Additionally, setting aside funds for unexpected costs and savings goals should be included to ensure financial stability. Analyzing trends in spending can help adjust estimates for the upcoming month to better align with actual financial needs. Lastly, consider any upcoming changes or events that may impact expenses, such as holidays or planned purchases.