How to Budget Your Money Dave Ramsey-Style

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I won’t go into detail about Dave Ramsey, I’m sure you already know who he is.

I’m sure you also know about his 7 Baby Steps, right?

While you’re going through the Baby Steps, at some point you’ll want to make a budget.

But how much should you be spending in each category? What are the different budget categories?!

Don’t worry, I got you. We’ll talk about the categories that Dave Ramsey recommends, and how much he recommends spending in each category.

Budget Guidelines

Here are the category recommendations and percentages:

  • Giving: 10%
  • Saving: 10%
  • Food: 10-15%
  • Utilities: 5-10%
  • Housing: 25%
  • Transportation: 10%
  • Health: 5-10%
  • Insurance: 10-25%
  • Recreation: 5-10%
  • Personal Spending: 5-10%
  • Misc.: 5-10%

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).


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    Giving – 10%

    Dave Ramsey is big on giving, specifically tithing. So it makes sense that he makes room in the budget for giving.

    Dave Ramsey recommends giving at least 10% of your income.

    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. I think you should focus on paying off your debt.


    Saving -10%

    This savings section is for things like big purchases and saving up for your emergency fund.

    Dave recommends saving a starter emergency fund then paying off debt, and then going back and saving up 3-6 months of expenses.

    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).


    Food – 10-15%

    Whew, only 10-15% of your budget for food.

    This would be pretty tough for me honestly. Especially since this is both eating out and regular groceries.

    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! 


    Utilities – 5-10%

    These are utilities for your home, including gas, water, electricity, etc. 

    **This is the stuff you NEED. Netflix doesn’t count as a utility!


    Housing – 25%

    Housing will most likely be everyone’s biggest expense. For this particular category, it’s not just rent / your mortgage, it’s also any HOA fees, PMI, and taxes.

    Dave recommends spending no more than 25% of your expenses.

    Let’s be realistic. 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).

    But remember, these are just guidelines.


    Transportation – 10% 

    This category is for any transportation costs, if it’s gas, oil changes, even bus fare – it goes here.

    10% might be impossible for some (if you have a car loan), but you should try and get these expenses as low as you can. 


    Health – 5-10%

    This part is anything you need for your health, like aspirin, cold medicine, etc.

    I think 5-10% might be too much money, I’d watch this category closely, and combine it with another category.


    Insurance – 10-25%

    This insurance category is for all the insurances! Health insurance, car insurance, homeowners insurance, etc.


    Recreation – 5-10%

    This category is for the fun stuff, this can be date nights, going out to eat, maybe catching a movie (or two).


    Personal Spending – 5-10%

    This is for personal purchases that aren’t necessary (could also be for more recreation). 

    These expenses can be some ice cream, new clothes (that you don’t need), etc. Just the fun extras that aren’t totally necessary.


    Misc – 5-10%

    Now this category is for everything else. 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. 

    Consider it a buffer.


    So what do you think of these budget percentages? Do they work for you? What would you change?

    2 thoughts on “How to Budget Your Money Dave Ramsey-Style”

    1. Great article! I’m a big fan of Dave Ramsey’s.

      In addition to budgeting for specific categories like rent and utilities, I also like to break my savings into different categories as well.

      I take my monthly savings and allocate 20% to vacation savings, 20% to car repair savings, 10% to savings for birthday gifts, and so on…

      It’s helped me save for different things and kept me from spending my entire savings all at once.

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