Have you done with your budgeting for this month? You look a little flustered about your debts. All right! There are many of us. All your concerns about budgeting and unpaid dues may be resolved by Dave Ramsey Budget Percentages.

Your visit on this article signifies your heebie-jeebies for your worries about debts. Luckily, you landed on the right one.

My ideas won’t be more trustworthy to you than the words of Dave Ramsey. He has always been an inspiration for millions who helped them to get out of their debts.

Dave Ramsey is the most trusted financial mentor among people. The Dave Ramsey Show is a popular talk radio show in the United States, and the audience of this show is around 13 million.

I.         Dave Ramsey Budget Recommendations

Dave Ramsey avoids complexities, keeping things simple. Therefore, it has become easier for people to implement it at their own household budget, enough to meet their financial goals.

The budget recommended by Dave Ramsey had helped them out to get rid of the debts that had always been a burden over them for a long time.

Budgeting is the first and the chief step towards financial planning. It is something that keeps every single dollar you earned under your control. While planning out a budget, it is obvious to have a few queries in your mind.

•         How should you plan your budget?

•         How can you make it simple?

•         What do experts suggest about your budget?

•         How much should you spend on different expenses?

•         How can you make enough savings to pay off your debt?

II.        Dave Ramsey Budget Percentages

If you’ve just started your financial journey, you should gain enough knowledge about budgeting. It is the most prominent step of your financial plannings.

In the beginning, budgeting looks a little tricky, it might be, for those who have never tried to make it simple. But Dave Ramsey’s budget percentage can give you a good start, and yet easy, enough for you to grasp your finance.

Below are the categories in which Dave Ramsey divided your whole household budget, along with the respective percentages that you should spend on them from your monthly income.

1.        Giving (10%)

2.        Saving (10%)

3.        Food (10% – 15%)

4.        Utilities (5% – 10%)

5.        Housing (25%)

6.        Transportation (10%)

7.        Health (5% – 10%)

8.        Insurance (10% – 25%)

9.        Recreation (5% – 10%)

10.      Personal Spending (5% – 10%)

11.      Miscellaneous (5%)

These are the percentages that you should consider from your net income (after-tax income).

Let’s check them out in-depth.

1. Giving (10%)

Dave Ramsey recommends 10% of the net income to be given for worthy causes. 

He has an experience of more than 25 years in finance. Ramsey is well aware of the financial pressures on people. He, himself, has gone through it at the start of his financial journey.

 Despite this fact, he mentioned giving at the top of his budgeting schedule. I got inspired by his selfless thoughts. Giving percentage (at least 10%) should be separated out from the income even before starting up your budget.

Ramsey’s budget suggests that giving should be prior to all other expenses. Your spending to charities, supporting worthy causes, donating to welfare organizations, or for some other good, and in the service of religion would be from 10% of your budget.

 Ramsey recommends it to be the essential part of your budgeting even if you’re overwhelmed by debts.

Even only 5%, not 10% if you can’t, but you should never skip this category, that’s what I think.

2. Saving (10%)

Let’s be realistic, we all want to build up a bulky balance in our savings account, which is meant for five primary causes:

•         Emergency savings

•         Savings for retirement

•         Savings for big expenses

•         Making enough savings to pay off all the debts

•         And ultimately, as we all strive to accrue wealth.

You may, but I desirously need to buy a new car. The old one is no longer able to be sold even in the junk. Urge to purchase a new mobile phone (Apple has just released a new model) and buying a new house.

All these can be done by means of a lot of savings. These all are a part of big expenses.

Besides this, set a suitable amount for emergency funds and then get concerned about your debts. Pay off your debts, then build a starter emergency fund that should be at least worth about three to six months’ expenses.

Ramsey’s budget recommends investing 15% of your revenue for savings about retirement. Once you have arrived at this point, you may start piling up your wealth.

3. Food (10% – 15%)


Looking at this, I thought the same thing you thought.

Only 10-15%, won’t be enough for me!

 But it will be, if you try.

Food, especially for me, is a category where I, often stuck. Whenever my budget gets out, the cause is invariably food. Not for me only, most of the people lost here at the time of budgeting.

Dave Ramsey Budget Percentage recommends 10-15% of your net income to food. It includes dinner out and groceries as well.

If you are a fan of McDonald’s cheesy pizza with extra topping and trying out a new expensive dish whenever having dinner out and a lot of meet-ups with friends, you will have to get serious regarding your budget as it is only 15% now.


4. Utilities (5% – 10%)

Utilities are inevitable expenses that expel out of my income, first of all, while budgeting. Dave Ramsey recommends 5-10% of your net income for utility bills payments.

They include electricity, water billing, natural gas, and trash, by the words of Dave Ramsey. But you may include your cell phone expenses, cable, internet cost, and other premiums and subscriptions payments.

What if they end up exceedingly more than 10% of your income, should you ignore Ramsey then?

Definitely, you shouldn’t. But reverse your eyes at your unnecessary and excessive utility expenses. You can easily have control over them just by an honest look at your needless premium subscriptions.

5. Housing (25%)

Budget percentages by Dave Ramsey suggest only 25% for your mortgage or rent payments, homeowners association (HOA) dues, PMI along with property insurance and taxes.

Housing payments engulf a great chunk of our income. House maintenance expenses are besides this.

Here many of us disagree with Ramsey, 25% doesn’t seem enough for all of your housing expenses. But before this, have a critical look at your luxurious housing, a big swimming pool, a vast garden, and a pet spa. You may save as much as $2500-$3000 per year by reducing your mortgage.

If you spend more than 25% on housing, you wouldn’t be able to make enough savings for your debts.

6. Transportation (10%)

10% is suggested for transportation or for the relevant causes. If you use public transport to be at your office, or for other traveling purposes, it is not a tough task for you to bring your transport expenses to 10%. It is for your coupon tickets and for Uber or Lyft rides.

Using your own car for the means of traveling, includes your car payments, car insurance, oil changing, parking fees, and taxes as well.

It seems impossible to meet your transport needs only at 10%, but it is not. You may have a start by narrowing your spending on transport.

7. Health (5% – 10%)

Health or medical care is a variable expense that sometimes gives you a pretty saving and sometimes may give you a shock. Ramsey wants you to make a budget that includes the health category to save you from such shock.

Obviously, your health is far more important than your money. Therefore, Ramsey suggests you to set aside a portion (roughly 5-10%) of your income for your health.

It includes all your (regular or unexpected) visits to your doctor, for dental care, or in case you have messed up with a gangster. It adds all your expenses on pharmaceutical drugs but, breathe a sigh of relief as you may exclude your health insurance from it.

8. Insurance (10% – 25%)

 Besides savings, insurance makes you strong financially enough to survive an hour of need and secures your future regarding finance. Insurance empowers you at your hard times.

You will be well aware of the need for insurance, but it is an uphill struggle, for me at least, to cut off a big portion of my income for insurance. But it is an inevitable necessity.

Dave Ramsey recommends 10-25% for insurances that may include:

•         Health Insurance

•         Life Insurance

•         Home insurance

•         Car insurance

•         Disability insurance etc.

 9. Recreation (5% – 10%)


 Finally, the most awaited category arrived.

What if you want to get delighted with a live music concert or have a get-together with friends or you might love traveling, there is a part of your income for your fun.

             All your dinners, plan for a movie, a long drive, vacation planning, and Netflix subscription are the sorts of recreations for you. If your hobbies are as costly as traveling for me, you’ll have to meet them all within 5-10% of your income.

It is Ramsey’s suggested budget percentage. All your fun and entertainment should lie here in this category. It also includes your child’s costumes for Halloween and other activities of your kids.

10.  Personal Spending (5% – 10%)

             Ramsey won my heart by creating this category separated from my other recreations and my child’s needs. What I want is just a pretty spiky haircut and the latest, my darling Nike footwear, aviator black goggles as well, all these are part of my personal spending.

             Your home decorating ideas will meet you up, unnecessary but desiring Amazon purchases, buying excessive clothing just to satisfy your soul, and purchasing books with inspiring titles that keep you alive are all your personal spending.

             The thing to keep in mind is that your beauty parlour bills and personal grooming costs must not exceed 10% but within 5-10% of your total earnings.

11.  Miscellaneous (5%)

             Ah! Dave Ramsey was well aware of my petty offense about the things that I often forget to add up to my budget.

             Could heavily survive the last weekend just because of setting up a miscellaneous category at my budget. It was the birthday party of my princess with a Disney theme that I overlooked to add up in my budget.

             5% of your budget is to be fixed for unexpected or unpredictable circumstances. It is a wise step to control your habit of misremembering.

             If you’re intelligent enough to cover up all the things to your budget, add this miscellaneous amount to your savings.

III.       Are The Dave Ramsey Budget Percentages practical in real-life budgets? 

You can stick to your budget only when it is practical and achievable. Are the Dave Ramsey budget percentages realistic?

 Budget percentages by Dave Ramsey are applicable for many people who have now paid their debts off. But these are just guidelines to start up your budgeting, says Dave Ramsey. 

The budget plan for two families cannot be the same even if the expenses of two individuals are quite different. You are supposed to adjust your budget according to your requirements. 

IV.      An alternative to Dave Ramsey Budget Percentages (50/30/20 budgeting method)

             There is a simpler alternative to Dave Ramsey budget percentages. The 50/30/20 budgeting method is a popular budget template based on percentage criteria. Just like Dave Ramsey’s budget percentages, it can give a quick start to your budget.

The 50/30/20 budgeting method suggests 50% of net income be used on expenses, 30% on your wants, and 20% to be saved in your locker.

·        50% on expenses

According to the 50/30/20 budgeting method, utilize 50% of your income on your regular expenses that are your necessities. Utilities, accommodation, groceries, transportation, insurance, and healthcare are all among your essentials. 

·        20% on wants

Besides your needs, 30% is for your wants. Dining out, recreation, vacations, gyming, and personal care should not exceed 30% of your income.

·         10% on savings

You should reserve 20% of your revenue in your savings account or pay off your debts.

VI.      How Can You Determine the Right Budget Percentages?

After having a deep view on Dave Ramsey’s budget percentages, it’s time to find out your own budget percentages that fit you best.

But before that, let me tell you that there is no ideal budget that will suit everyone. In the end, you will have to plan up your budget yourself, no one is going to do it.  

But how can you determine your own budget percentages?

 Just by asking a few questions to yourself. Look at the points outlined below to try to find out the right budget percentage for yourself.

  • How much does your budget percentage resemble Dave Ramsey’s?
  • Where do you feel an imbalance in your budget?
  • How can you adjust your budget plan with Dave Ramsey’s budget recommendations?
  • Which category do you think needs to improve?
  • Where should you decrease your spending?
  • Where should you need to increase your spending?
  • Find out the ways to save money.

VII.  Sample Budget according to Dave Ramsey Budget Percentages

Now let’s find out how a middle-class person can make his budget according to Dave Ramsey’s budget percentages.

Let’s make a budget sample concerning the recommended budget percentages by Dave Ramsey.

Assume the average income of an average person to be $59,500 per year ($4,958 monthly).

So, the after-tax income left behind is $53,550. Let’s schedule a budget for expenses and savings over a net income of $53,550 by applying the Dave Ramsey percentage method.

By a rough approximation, taxes can be 10% of the total income ($5,950).

CategoryAnnual ExpenseMonthly expense
Giving (10%)$5,355$495
Saving (10%)$5,355$495
Food (10%)$5,355$495
Utilities (5%)$2,677$247
Housing (25%)$13,387$1,239
Transportation (10%)$5,355$495
Health (5%)$2,677$247
Insurance (10%)$5,355$495
Recreation (5%)$2,677$247
Personal Spending (5%)$2,677$247
Miscellaneous (5%)$2,677$247


Dave Ramsey’s budget percentages may not necessarily suit you. But they will give you a good idea about the things that often distract you while budgeting. Until now, I’m sure that you will have learned how you can categorize your expenses and adjust your income among those categories accordingly. 

Remember me too, along with Dave Ramsey, after you have successfully done your budget.

Frequently Asked Questions:

What is the 70 20 10 rule method?

According to the 70 20 10 budget method, spend 70% on the expense, 20% to be saved from your after-tax income, and 10% should be donated or used to pay off debts.

What is the 50 30 20 budget rule?

The 50/30/20 budgeting method suggests 50% of net income be used on expenses, 30% on your wants, and 20% to be saved in your locker.

What percentages should my budget be?

The budget plan for two families cannot be the same. You should adjust your budget according to your requirements. These budget percentages are just a guideline to start up your budgeting, says Dave Ramsey. 

What percentage of my income should I spend on Car Dave Ramsey?

Dave Ramsey suggests spending 10% on transportation or for the relevant causes.

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