Check to see if your workplace offers discounts on different types of insurance. Insurance is a necessary evil, unfortunately. If you know that you have a costly month coming up in this category, adjust it up and then back down as needed to cover the expenses. Healthcare can vary so much from family to family and even person to person. This category should include anything from a car payment to bus passes: When you think about rent or mortgage and add property taxes, HOA fees, and more, it can add up! Housing is always the most significant percentage in any budget, and for a good reason. If you find that you're spending more than you'd like, you can use services like Trim or Truebill to help you negotiate your bills to save more on bills like:ĭave Ramsey recommends that 25% of your income should go to housing. These are all the things you need to make a household run. If you find that you're overspending on groceries, you can learn more about how I used a meal plan to make over my grocery budget here!) It's up to you if you want to include eating out in the food budget category or if it makes more sense in the recreation or personal spending budget categories. So, think of it this way: $1,000 baby emergency fund pay off all debt (except for mortgage) build your 3-6 months of expenses emergency fund then invest 10-15% of your pay into retirement and save for vacations, house updates, and any other big purchases. Dave recommends waiting to save for retirement until you have your debt paid off and three months of expenses saved up in an emergency fund. You'll want to use this savings category wisely.

An emergency fund for unexpected expenses.

This category should be about building wealth and saving for the future and includes: Most American aren't saving much money for retirement or emergency funds.

Non-cash donations to Goodwill, food pantry, etc.

Weddings, engagement parties, bachelor/bachelorette parties (learn about affordable wedding ring alternatives).

Birthday Parties (pick up some cheap birthday ideas here).

Service gifts (mail person, garbage person, etc.).

The budget category includes items such as: Ultimately, it's up to you if you chose to make contributions at this time or not. If you're not sure which expenses should fall into which budget categories, let's go over specifics:ĭave Ramsey is big on tithing and suggests working it into your budget. He's also a big supporter of working additional hours or extra jobs to pay off debt as quickly as possible.Ĭonsider getting your $1000 emergency fund saved and then using the Saving category to help tackle debt and improve your financial situation. Why is that?ĭave believes that you can adjust the percentages to put some money towards debt while setting up your budget. You’ll notice that debt repayment - like credit cards - isn’t listed on Dave’s budget percentages. This breakdown is based on net income (after taxes, but before 401k contributions or health insurance premiums) Dave Ramsey Suggested Budget Categories Using Dave Ramsey's budgeting percentages can be an easy way to get started with budgeting. If you're struggling with figuring out what percentage of your monthly income should go to what budget category, you're not alone.

Financial Peace Revisited: New Chapters on Marriage, Singles, Kids and Families.

The Total Money Makeover (with workbook).For more information on his debt repayment methods, pick up one of his books:

One of the key pieces to his method is budgeting, along with his seven baby steps. He's pulled himself out of the trenches and is now estimated to have a whopping net worth of $200 million, which makes him pretty well qualified to help others do the same.įor beginners, Dave does a beautiful job of dumbing important things down to a level where you can't mess them up. Dave has been bankrupt and knows what it's like to struggle with money. Chances are, if you've heard the term 'Better than I deserve!', then you've heard of Dave Ramsey budget percentages.ĭave Ramsey is a money guru whose budgeting concepts and baby steps are best used by people starting their money journey.

Dave ramsey percentages for budget