How To Get The Most Out Of The Dave Ramsey Budget

Have you ever wondered how much you should spend in a month? With his recommended budgeting percentages, Dave Ramsey has provided us with the answers to these issues.

The Dave Ramsey Budget may not be everyone’s cup of tea, but he has unquestionably made personal finance realistic.

So if you’re particularly fond of personal finance, this budgeting method might be perfect for you. 

I wouldn’t be surprised if you’ve already heard of Dave Ramsey. He’s one of the first names that pop up if you search for budgeting tips online. 

Even if you know that budgeting is essential, you might not know where to start and the best practices. That’s where Dave comes in. 

It’s undeniable that managing money can be difficult. So let’s tackle all that today. First, let’s get into the basics and then delve into what Dave’s budgeting plan has to offer. 

dave ramsey budget

Why Do You Need A Budget In The First Place? 

A budget is necessary regardless of your financial status. Budgeting is your life’s financial road plan.

You’ll require a budget if you.

  • Are attempting to reduce your expenses.
  • Primary goal is to get rid of credit card debt, or any debt for that matter!
  • Find it tough figuring out how to spend your paycheck each month
  • Living expenditures are out of hand and you need help managing them
  • Need assistance keeping track of your bills

I could probably come up with another 20 reasons right now, but you get the idea.

Budgeting can assist you in achieving your financial objectives!

So, let’s take a look at what Dave suggests for household budgeting percentages.

Related Reading: The best way to build credit – Learn To Build Credit Here

The Dave Ramsey Budget Percentages 

Are you new to budgeting?

Maybe you’re not new at budgeting, but you’ve had previous failures?

Dave’s budgeting percentages are a terrific place to start when determining how much you should spend each month.


Food: 5%-15%

Debt Repayment and Savings: 10%-15%

Utilities: 5%-15%

Clothing: 2%-7%

Housing: 25%

Charity: 10%-15%

Insurance: 10%-25%

Medical Expenses: 5%-10%

Recreation: 5%-10%

Personal Expenses: 5%-10%

Transportation: 10%


Food is frequently the area of your budget where things begin to go awry. Eating out can be costly, and quick coffees and vending machine snacks can soon pile up.

Food should account for 5-15% of your budget, according to Dave. Cost of living and dietary restrictions should be considered when determining where you should be on this expenditure spectrum.

It doesn’t matter if you eat at home or out, as long as it’s included in this budget line.

Batch cooking freezer dinners is one technique to save money at home. Then you can take my family to a meal out with the money you’ve saved.

If you find yourself eating out too frequently, you should divide this category into groceries and restaurants. It may help you avoid blowing your entire budget on eating out.

Debt Repayment and Savings 

There are several reasons to save money, including retirement, emergency preparedness, and irregular expenses like those described as Sinking Funds.

The other side of this coin is becoming more active with debt repayment to become debt-free.

Before getting down to the business of eliminating your debt, Dave Ramsey recommends starting with a $1,000 emergency fund. Then get rid of your high-interest debt and school loans as soon as possible.

Platforms like Credible will help you refinance your student loans.

If you don’t have debt, you’ll need to set aside money in your emergency fund to cover 3-6 months’ living costs. 

After you’ve fully funded your emergency fund, you can begin to develop your wealth.

So, how much should you be saving anyway? The recommended percentage is 10%-15%, although it may vary based on your aims.


Electricity, water, garbage service, sewer, cell phones, and cable/internet are utilities. For all monthly utilities, Dave advises 5–10% of your budget. 

You may not do much about local service costs, but you can always be more energy efficient.


These budgets should be between 2% and 7% of total income. Clothing is necessary, but it does not have to be expensive! You’ll probably be able to get by with the clothes you already have. 

Depending on your employment, professional work clothes are required, but you don’t need to spend much money on them.

Go for flexible fundamentals and accessorize with less expensive pieces to liven up your look. Many places even offer consignment shops where you may save a lot of money on gently used work clothes.


What should my rent budget be? What type of mortgage am I able to afford? No more than 25% of your take-home earnings, according to Dave. 

Some argue that if you reside in a high-cost-of-living area, this is unrealistic. The idea for this figure is that spending limits your potential to save and pay down debt.

Housing expenditures include rent or mortgage payments and property taxes, HOA fees, and PMI.

A few services, such as Mortgage Calculator, make figuring out how much you can afford extremely simple. Just remember to factor in ALL housing costs and keep the percentage below 25%.


Dave Ramsey is a big believer in donating. Giving can take several forms, including tithing, gifts, and supporting specific causes. If you want to prioritize this, he suggests allocating 10-15% of your real net income to it.


Nothing is appealing about insurance.

It’s about as pleasurable as buying detergent. It is, nevertheless, an absolute necessity!

Hence suggested that you spend between 10% and 25% of your income here.

Insurance For Homeowners and Renters

This is of your worldly goods, all in one place. Giving one of the most critical aspects of your life that extra layer of protection– just in case– is a fantastic idea.

Life Insurance

Only two things are certain in life, according to Benjamin Franklin: death and taxes.

Life insurance is a type of financial security that provides a tax-free cash payment if you die. This money might be used to pay for funeral costs, outstanding debts or support your family.

Car Insurance 

Only a few states do not require auto insurance, but the majority do. Auto insurance can help you protect yourself and your assets.

Medical Expenses 

Dave suggests devoting 5%–10% of your budget to health-related expenses. Health insurance, prescriptions, and co-pays are all included in this category. 

This is one category that might fluctuate a lot from month to month, depending on what life throws at you.

Starting a sinking fund for medical expenses in the case of a significant health incident could be a fantastic approach. This is to mitigate the uncertainty of healthcare costs.

Another approach is to keep your medical costs down with an HSA or FSA, allowing you to make pre-tax payments.


Dave suggests allocating 5%–10% of your budget to this portion. This is the category for things like going to the movies, buying books, and taking trips.

This is where you can have a good time and be entertained. Budgeting should not make you feel anxious or as if you will never be able to enjoy yourself.

To live a steady life, you need to strike a fair balance between saving, paying off debt, and spending freely. You’ll be more likely to adhere to your budget if you spend some of your money on something enjoyable.

Personal Expenses 

The recommended percentage is between 5% and 10%. Child care, tuition, haircuts, and fun money are all included here.

Do you need a new handbag or a pair of shoes? This is the part of your budget that allows for that. This is a category in which I firmly believe.

Sure, you must prioritize your spending and have a budget in place. However, budgeting is similar to dieting in that it’s more challenging to keep to a diet without a cheat day. 

So, let’s talk about personal spending. Don’t be in a hurry to cut this out. If you don’t allow yourself a tiny bit of fun money, you’re more prone to overspend. 

It’s probably best to switch to a controlled burn, so things don’t get out of hand.


You should spend 10% of your monthly salary on transportation. Payments for a car, registration fees, upkeep, repairs, and gasoline are all covered by this category. This could also include rail, bus, or subway fares, as well as parking, depending on where you live.

If you’re paying a hefty monthly car payment on top of gas and maintenance, it might be time to upgrade to a less expensive vehicle. Other possibilities include carpooling or taking public transportation to work.

Can You Add To The Dave Ramsey Budget? 

Can You Add To The Dave Ramsey Budget? 

Yes, you’re encouraged to personalize this budget as much as you want. 

Taking into account your financial goals is a vital aspect when creating your monthly budget.

Are you putting money aside for a down payment on a home? Are you attempting to pay off debt? Do you want a vacation?

Incorporating these goals is a critical step in preventing you from accruing more debt. They also push you closer to reaching your objectives.

Having a clear plan for each dollar is significantly more effective than depositing a bulk sum in your savings account and calling it a day.

Budget Tips From Dave Ramsey 

If you’re new to budgeting, here are some suggestions to help you make the process go more smoothly.

1. If you have older children and are married, make sure everyone attends the monthly budget sessions. If everyone isn’t on board with this, it won’t work.

2. If your children are old enough, be open with them about where you are financially and where you want to go. You should set financial goals so that everyone knows what you’re aiming for.

3. Keep track of your progress regularly. That implies you should be updating your spending diary every few days with how much you spent. 

I suggest doing this at least once a week, but 2-3 times a week. If you are overspending, you must give yourself time to correct your course.

4. You can’t utilize someone else’s numbers when it comes to personal finance!

5. Distinguish between desires and requirements. No one likes giving up their favorite pastime, but you will have to do so for a while. The first thing to go is usually personal expenditure.

6. Don’t forget to plan for those one-time purchases while preparing a new month’s budget. For example, a birthday celebration is coming up, or an annual charge (HOA fee) is due. 

One-time expenses can be disheartening if they go unnoticed, so don’t blow your budget just because you didn’t plan!

7. Throughout the month, tweak and alter your budget. Don’t be concerned; no budget is ideal from the start. It usually takes three months for folks to find their stride.

A Short Analysis of The Dave Ramsey Budget 

The aim is to examine your current monthly budget using these budgeting categories.

As a result, comparing these budgeting categories to your present actual spending is the first step in making them usable. 

The focus is on actuality because research reveals that what we say and what we do are vastly different.

This is referred to as the social desirability bias. It means that we tend to respond to questions about ourselves in socially acceptable ways. 

First, estimate your current monthly spending. Then compare that estimate to the facts as a fun experiment to show how this bias works in practice. Try only one category for a faster experiment. 

Comparing what you thought you spent on eating out last month versus what you spent is a good example.

The idea is to generate accurate numbers that show exactly how much you spent down to the dollar.

Related Reading: Simple Bank review and alternatives – Check Them out Here

Final Thoughts 

It’s okay if not everyone agrees on particular approaches or how every aspect is represented in the Dave Ramsey budget. You don’t have to practice everything he says. 

However, it’s difficult to dispute the majority of his advice when so many people have benefited from it. What matters is that you figure out what works for you and stick to the household budgeting percentages you’ve established.

Disclosure: This article might contain affiliate links to the resources I refer to. It's at no cost to you, and it's how we pay the bills. Get more info here.

Brooks Conkle Banner Image
Brooks Conkle

Brooks is an entrepreneur, father, husband, & follower of the golden rule. He has over 15 years of experience as an entrepreneur after graduating with a Finance degree from Auburn University. Addicted to starting new business projects, he believes in creating multiple income streams and a life of flexibility. Business should work around your life, not the other way around. He creates content on his website, sharing his projects to help other hustlers in marketing, personal finance, and online business.