![]() The simple answer is yes, the Dave Ramsey budget can work and HAS worked for a lot of people. Everyone needs some wiggle room.ĭoes the Dave Ramsey budget work? Is it even realistic? Sometimes budgets just don’t cover everything perfectly, you may overestimate something, or an expense might come up that you weren’t expecting – that’s what this category is.Ĭonsider it a buffer. Now this category is for everything else. Just the fun extras that aren’t totally necessary. These expenses can be some ice cream, new clothes (that you don’t need), etc. This is for personal purchases that aren’t necessary (could also be for more recreation). You can also add in things like Netflix or Spotify subscriptions. This category is for the fun stuff, this can be date nights, going out to eat, maybe catching a movie (or two), or even play at Uptown Aces Casino. This insurance category is for all the insurances! Health insurance, life insurance, homeowners insurance, etc. I think 5-10% might be too much money, I’d watch this category closely, and combine it with another category. This part is anything you need for your health, like aspirin, cold medicine, etc. This category is for any transportation costs, if it’s gas, oil changes, even bus fare – it goes here.ġ0% might be impossible for some (if you have a car loan), but you should try and get these expenses as low as you can. It’s probably not possible for a lot of people to spend less than 25% on housing – especially if you live in a high cost of living area or if you make minimum wage (or less).īut remember, these are just guidelines. For this particular category, it’s not just rent / your mortgage, it’s also any HOA fees, PMI, and taxes.ĭave recommends spending no more than 25% of your expenses. Housing will most likely be everyone’s biggest expense. You could also add internet and your phone into this category also. These are utilities for your home, including gas, water, electricity, etc. To get to 10-15%, you’ll most likely have to stop eating out altogether, you will have to carefully meal plan, and you will most likely use coupons!īut if you are laser-focused on savings as much as you can, getting out of debt, and investing as much as you can, then keeping your food budget to 10-15% of your budget is a great guideline. Especially since this is both eating out and regular groceries. This would be pretty tough for me honestly. Whew, only 10-15% of your budget for food. I think 10% is a good start, but I think you should try and get to that 3-6 months of expenses as fast as you can (so 10% might not be enough). This savings section is for things like big purchases and saving up for your emergency fund, and this category is also used for investing and building wealth.ĭave recommends saving a starter emergency fund then paying off debt, and then going back and saving up 3-6 months of expenses. ![]() I think you should focus on paying off your debt. Now, I think giving is a great thing (I think everyone should give some amount of money to charity regularly), BUT, if you’re in debt, I don’t think you should be giving money to charity or tithing. So it makes sense that he makes room in the budget for giving.ĭave Ramsey recommends giving at least 10% of your income. ![]() Now this might be a lot to digest, and some of the categories might not make any sense to you, so we’re gonna go through each one (I told you I got you).ĭave Ramsey Recommended Budget Categoriesĭave Ramsey is big on giving, specifically tithing. Here are the category recommendations and percentages: **Just a few notes, these percentages are meant to applied to your after-tax money (but before any 401(k) contributions and health insurance payments). If you’re just starting out with budgeting, these budgeting percentages recommended by Dave Ramsey are a great starting point. In this post, we’ll talk about the specific budget categories that Dave Ramsey recommends, and how much he recommends spending in each category. You can use these budgeting percentages to help divide (divvy) up your paycheck in a way that helps you pay all of your bills and save money. ![]() While going through the 7 Baby Steps (or any financial journey) one of the first things you need to do is create a budget or spending plan.īut this is where things can get a bit confusing – you’ll probably have some questions like: How much should you be spending in each category? What are the different budget categories?!ĭave Ramsey has some budget percentages that you can apply to your budget to make things easier. I’m sure you also know about his 7 Baby Steps, right? I won’t go into detail about Dave Ramsey, I’m sure you already know who he is.
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