{"id":8387,"date":"2019-06-07T15:00:54","date_gmt":"2019-06-07T21:00:54","guid":{"rendered":"https:\/\/www.personalfinanceforbeginners.com\/?p=8387"},"modified":"2019-06-07T15:54:01","modified_gmt":"2019-06-07T21:54:01","slug":"dave-ramsey-budget-percentages","status":"publish","type":"post","link":"https:\/\/www.personalfinanceforbeginners.com\/dave-ramsey-budget-percentages\/","title":{"rendered":"How to Use Dave Ramsey\u2019s Budget Percentages"},"content":{"rendered":"<p>Are you creating a household budget but aren\u2019t sure how much money you should be set aside for each category of spending?<\/p>\n<p>If so, the Dave Ramsey budget percentages can be a great starting point.<\/p>\n<p>While there isn\u2019t a \u201cone size fits all\u201d budget that works for every financial situation, this simple framework can give you a basic benchmark on how much to spend on your housing, transportation, food, etc.<\/p>\n<p>In this post, you will learn about the benefits of keeping a budget, how much Dave Ramsey recommends you set aside for your expenses, and what to do if you\u2019re struggling to make these budget percentages work for you.<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_49 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\">Jump to...<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"ez-toc-toggle-icon-1\"><label for=\"item-647a0cd7cf468\" aria-label=\"Table of Content\"><span style=\"display: flex;align-items: center;width: 35px;height: 30px;justify-content: center;direction:ltr;\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/label><input  type=\"checkbox\" id=\"item-647a0cd7cf468\"><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-visibility-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.personalfinanceforbeginners.com\/dave-ramsey-budget-percentages\/#Why_you_should_have_a_household_budget\" title=\"Why you should have a household budget\">Why you should have a household budget<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.personalfinanceforbeginners.com\/dave-ramsey-budget-percentages\/#Who_is_Dave_Ramsey\" title=\"Who is Dave Ramsey?\">Who is Dave Ramsey?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.personalfinanceforbeginners.com\/dave-ramsey-budget-percentages\/#What_are_Dave_Ramsey%E2%80%99s_recommended_budget_percentages\" title=\"What are Dave Ramsey&#8217;s recommended budget percentages?\">What are Dave Ramsey&#8217;s recommended budget percentages?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.personalfinanceforbeginners.com\/dave-ramsey-budget-percentages\/#What_expenses_belong_to_each_budget_category\" title=\"What expenses belong to each budget category?\">What expenses belong to each budget category?<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.personalfinanceforbeginners.com\/dave-ramsey-budget-percentages\/#Giving_10\" title=\"Giving (10%)\">Giving (10%)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.personalfinanceforbeginners.com\/dave-ramsey-budget-percentages\/#Saving_10\" title=\"Saving (10%)\">Saving (10%)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.personalfinanceforbeginners.com\/dave-ramsey-budget-percentages\/#Food\" title=\"Food\">Food<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.personalfinanceforbeginners.com\/dave-ramsey-budget-percentages\/#Utilities\" title=\"Utilities\">Utilities<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.personalfinanceforbeginners.com\/dave-ramsey-budget-percentages\/#Housing\" title=\"Housing\">Housing<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.personalfinanceforbeginners.com\/dave-ramsey-budget-percentages\/#Transportation\" title=\"Transportation\">Transportation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.personalfinanceforbeginners.com\/dave-ramsey-budget-percentages\/#Health_and_Medical\" title=\"Health and Medical\">Health and Medical<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.personalfinanceforbeginners.com\/dave-ramsey-budget-percentages\/#Insurance\" title=\"Insurance\">Insurance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.personalfinanceforbeginners.com\/dave-ramsey-budget-percentages\/#Recreation_and_Entertainment\" title=\"Recreation and Entertainment\">Recreation and Entertainment<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.personalfinanceforbeginners.com\/dave-ramsey-budget-percentages\/#Personal_Spending\" title=\"Personal Spending\">Personal Spending<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.personalfinanceforbeginners.com\/dave-ramsey-budget-percentages\/#Miscellaneous\" title=\"Miscellaneous\">Miscellaneous<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.personalfinanceforbeginners.com\/dave-ramsey-budget-percentages\/#My_favorite_alternative_the_503020_budget\" title=\"My favorite alternative: the 50\/30\/20 budget\">My favorite alternative: the 50\/30\/20 budget<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.personalfinanceforbeginners.com\/dave-ramsey-budget-percentages\/#What_if_your_household_budget_doesn%E2%80%99t_match_these_percentages\" title=\"What if your household budget doesn\u2019t match these percentages?\">What if your household budget doesn\u2019t match these percentages?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.personalfinanceforbeginners.com\/dave-ramsey-budget-percentages\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Why_you_should_have_a_household_budget\"><\/span>Why you should have a household budget<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Do you spend more money on food or transportation every month? Clothing or entertainment?<\/p>\n<p>Without a budget, these questions can be difficult to answer. Many people have no idea where much of their money is going each month.<\/p>\n<p>When I started on my own personal finance journey, I had no idea just how much I was spending on eating out at restaurants and traveling. After creating a budget, I was able to get my personal finances back on track.<\/p>\n<p>Here are six important reasons why you should create a budget:<\/p>\n<ol>\n<li><b>Understand where your money is going.<\/b> It\u2019s difficult to improve your financial situation without defining your starting point.<\/li>\n<li><b>Keep yourself accountable for your financial decisions.<\/b> It\u2019s time to start <a href=\"http:\/\/personalfinanceforbeginners.com\/how-to-adult\">managing your money like an adult<\/a> so you can reliably provide for yourself \u2013 and potentially others.<\/li>\n<li><b>Make sure you\u2019re spending less money than you earn.<\/b> This is key to staying out of debt, building wealth, and reaching your long-term financial goals.<\/li>\n<li><b>Identify problem areas where you need to decrease your spending.<\/b> Don\u2019t let unplanned spending sneak up on you. Even $10 or $20 purchases can quickly add up over the course of the month.<\/li>\n<li><b>Be proactive about hitting your debt payoff, savings, and investment goals.<\/b> Becoming debt-free, buying a home, or retiring from your job may feel like they\u2019re a lifetime away, but don\u2019t let time sneak up on you. Following a budget gives you a more predictable timeline for reaching your goals.<\/li>\n<li><b>Stop worrying and start feeling under control.<\/b> Too scared to check your credit card balance? Afraid that your debit card is going to get declined? Don\u2019t just rely on <a href=\"https:\/\/www.personalfinanceforbeginners.com\/motivational-quotes-students\/\">motivational quotes<\/a> to get you through the week. A budget can give you a plan <i>and<\/i> peace of mind.<\/li>\n<\/ol>\n<p>We\u2019ll talk about how to build a budget that will help you enjoy these benefits, but first&#8230;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Who_is_Dave_Ramsey\"><\/span>Who is Dave Ramsey?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Dave Ramsey is a popular personal finance author, radio show host, and businessman.<\/p>\n<p>Ramsey hosts <a href=\"https:\/\/www.daveramsey.com\/show\"><i>The Dave Ramsey Show<\/i><\/a> where he offers listeners his financial guidance on paying off debt, saving money, and investing toward retirement.<\/p>\n<p>Ramsey is also the author of the New York Times best-selling book <a href=\"https:\/\/www.amazon.com\/Total-Money-Makeover-Classic-Financial\/dp\/1595555277\/\"><i>The Total Money Makeover<\/i><\/a>.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_are_Dave_Ramsey%E2%80%99s_recommended_budget_percentages\"><\/span>What are Dave Ramsey&#8217;s recommended budget percentages?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Alright, that\u2019s enough talking about Dave himself. Back to creating a budget.<\/p>\n<p>Let\u2019s take a look at the breakdown of budget categories and how much Dave Ramsey recommends spending on each of those expenses every month:<\/p>\n<ul>\n<li><b>Giving:<\/b> 10%<\/li>\n<li><b>Saving:<\/b> 10%<\/li>\n<li><b>Food:<\/b> 10-15%<\/li>\n<li><b>Utilities:<\/b> 5-10%<\/li>\n<li><b>Housing costs:<\/b> 25%<\/li>\n<li><b>Transportation:<\/b> 10%<\/li>\n<li><b>Health and medical:<\/b> 5-10%<\/li>\n<li><b>Insurance:<\/b> 10-25%<\/li>\n<li><b>Recreation and entertainment:<\/b> 5-10%<\/li>\n<li><b>Personal spending:<\/b> 5-10%<\/li>\n<li><b>Miscellaneous:<\/b> 5-10%<\/li>\n<\/ul>\n<p>Keep in mind, these budget recommendations are just guidelines.<\/p>\n<p>If you\u2019re spending less than 25% of your income on housing because you\u2019re still living at home or with roommates, there\u2019s no need to rush out and rent a large place or apply for a mortgage.<\/p>\n<p>Likewise, there\u2019s no need to cap your giving or savings at 10% each if you are currently in a situation where you can set aside more.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_expenses_belong_to_each_budget_category\"><\/span>What expenses belong to each budget category?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Let\u2019s take a closer look at each budget category, what expenses typically fall under each category, and how you can improve that percentage in your budget.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Giving_10\"><\/span>Giving (10%)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>In my opinion, one of the best <a href=\"https:\/\/www.personalfinanceforbeginners.com\/how-to-better-yourself\/\">ways to better yourself<\/a> is to find opportunities to give back to others. You can do this with your time, resources, and of course&#8230; your money!<\/p>\n<p>You may choose to support a non-profit organization, give a religious tithe, or participate in a charitable crowdfunding campaign for an individual or family in need.<\/p>\n<p><i>How can you increase your giving budget percentage?<\/i><\/p>\n<p>If you haven\u2019t found a cause or organization to give to, consider increasing the amount you tip food service workers at restaurants, bars, and coffee shops.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Saving_10\"><\/span>Saving (10%)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>This is one of the areas of personal finance that separates the <a href=\"https:\/\/www.personalfinanceforbeginners.com\/rich-vs-wealthy\/\">rich vs wealthy<\/a>.<\/p>\n<p>While rich people spend <i>all<\/i> of their high incomes to inflate their lifestyles, wealthy people instead set aside a portion of their income for the future.<\/p>\n<p>At first, this starts with saving money for unplanned emergency expenses. Eventually, you\u2019ll want to use this money to build assets that can produce <a href=\"https:\/\/www.personalfinanceforbeginners.com\/generational-wealth\/\">generational wealth<\/a>: invest in the stock market, buy rental properties, or start a business.<\/p>\n<p><i>How can you increase your saving budget percentage?<\/i><\/p>\n<p>Automate your savings by opening an online banking account and adjusting your direct deposit to send 10% of your paycheck into savings. Increase this direct deposit by 1% when you can. You may not even notice that percent is going into savings rather than your normal checking account!<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Food\"><\/span>Food<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Most people\u2019s food expenses can be broken down into two main categories: grocery shopping and eating out at restaurants.<\/p>\n<p>You may need to review your receipts or give yourself some cushion with grocery shopping because that spending may include household or personal items as well.<\/p>\n<p>With the \u201ceating out\u201d category, don\u2019t forget to include money spent at coffee shops or bars.<\/p>\n<p><i>How can you decrease your food budget percentage?<\/i><\/p>\n<p>The key to keeping your food budget low is to avoid eating out as much as possible. You can easily burn through your entire day\u2019s food budget with a single meal. Instead, learn how to cook at home and develop a habit of meal prepping (or at least saving your leftovers).<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Utilities\"><\/span>Utilities<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Utilities can be an often-overlooked category for new budgeters. Typical utility bills for homeowners often include:<\/p>\n<ul>\n<li>Gas<\/li>\n<li>Electric<\/li>\n<li>Water<\/li>\n<li>Sewer<\/li>\n<li>Trash<\/li>\n<li>Recycling<\/li>\n<li>Cable TV<\/li>\n<li>Phone service<\/li>\n<\/ul>\n<p>Even if you\u2019re a renter, you may be held responsible for any or all of these utilities.<\/p>\n<p><i>How can you decrease your utility budget percentage?<\/i><\/p>\n<p>Relying on <a href=\"https:\/\/www.personalfinanceforbeginners.com\/free-internet\">free internet<\/a> can be a hassle, but there are many other simple things you can do to lower your utility expenses. Scrap cable TV for a subscription-based service. Use a smart thermostat to save on heating or cooling while you\u2019re away during the day.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Housing\"><\/span>Housing<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Your primary housing expenses <i>could<\/i> be as simple as a rent payment. But if you\u2019re a homeowner, then it\u2019s not so simple. Aside from your mortgage payment, this housing budget category could also include private mortgage insurance (PMI) and homeowners association fee (HOA).<\/p>\n<p><i>How can you decrease your housing budget percentage?<\/i><\/p>\n<p>Housing can be one of the more difficult budget categories to manage as you may find yourself locked into a loan or home for years. The best option is to avoid buying or renting more home than you need in the first place, but you can make the most of your home expense situation by having a roommate or renting out <a href=\"https:\/\/www.neighbor.com\/\">peer-to-peer storage<\/a>.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Transportation\"><\/span>Transportation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>If you\u2019re like most people who rely on a vehicle for transportation, this expense category will consist of two main items: a car payment and fuel.<\/p>\n<p>Unfortunately, those aren\u2019t the only line items you\u2019ll end up paying for transportation throughout the year. Budget some extra money throughout the year for the easily-overlooked car expenses that can sneak up on you. These can include oil changes, tire rotations, vehicle registration, safety and emissions tests\u2026<\/p>\n<p>With so many car-related expenses, you can see why many opt for public transit or other options instead.<\/p>\n<p><i>How can you decrease your transportation budget percentage?<\/i><\/p>\n<p>Leave your car at home, and ride a bike or walk to your destination instead. This will help you save money, stay active, and reduce your impact on the environment. All great reasons to keep your vehicle parked!<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Health_and_Medical\"><\/span>Health and Medical<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Nobody plans in advance to come down with illness or make a trip to the emergency room. Budgeting money for health and medical expenses will give you peace of mind if you find yourself needing to visit the doctor or fill a prescription.<\/p>\n<p>If you\u2019re currently in good health, you may want to use this portion of your budget to pay for a gym membership or contribute toward a Health Savings Account (HSA) so you can proactively improve your health or set aside money for health-related expenses in the future.<\/p>\n<p><i>How can you decrease your health budget percentage?<\/i><\/p>\n<p>There are many free or affordable ways you can improve your health and hope to minimize your chances of future health complications. By staying physically active, eating a balanced diet, and sleeping at least 7-8 hours per night, you may be able to stay well and reduce the likelihood of developing an expensive and debilitating chronic condition in the future.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Insurance\"><\/span>Insurance<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Even more than health, insurance is one budget category on this list that you need to pay for but you hope you\u2019ll never need to use.<\/p>\n<p>Depending on your current life circumstances, you may need to buy health insurance, auto insurance, and either homeowners or renters insurance. If you have a pet in the home, you may choose to pay for insurance for them as well!<\/p>\n<p><i>How can you decrease your insurance budget percentage?<\/i><\/p>\n<p>Shop around for <a href=\"https:\/\/www.personalfinanceforbeginners.com\/buying-auto-insurance\/\">auto insurance<\/a>. It\u2019s easy to request quotes online without having to speak with anyone at all. If it\u2019s been a while since you bought your policy, you may be surprised to see a better deal is out there.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Recreation_and_Entertainment\"><\/span>Recreation and Entertainment<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>There\u2019s more to life than just earning or saving money. That\u2019s why people who <a href=\"https:\/\/www.lifehack.org\/articles\/communication\/8-reasons-why-people-who-spend-money-experiences-are-happier.html\">choose to spend money on experiences<\/a> rather than material things tend to be happier than their peers.<\/p>\n<p>Expenses in this budget category may include sporting events or concert tickets, airfare and travel accommodations, or hobby-related expenses like a martial arts class or pair of hiking boots.<\/p>\n<p><i>How can you decrease your recreation budget percentage?<\/i><\/p>\n<p>Find <a href=\"https:\/\/www.personalfinanceforbeginners.com\/cheap-fun-boring-weekends\/\">things to do when bored<\/a> that don\u2019t require spending money. Spend time outside, learn something new, and build and renew relationships with friends and loved ones around you.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Personal_Spending\"><\/span>Personal Spending<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>This is your guilt-free discretionary income. That random <a href=\"https:\/\/www.amazon.com\/Spiralizer-Vegetable-Strongest-Heaviest-Gluten-Free\/dp\/B00GRIR87M\">vegetable spiralizer<\/a> you found while browsing Amazon? Been waiting months for a new video game to get released? Need to book a massage after spending the holidays with your in-laws?<\/p>\n<p>Personal spending includes these types of optional expenses that you could live <i>technically <\/i>without\u2026 If you didn\u2019t realize that it\u2019s totally okay to treat yourself on occasion!<\/p>\n<p><i>How can you decrease your personal spending budget percentage?<\/i><\/p>\n<p>Next time you\u2019d like to make an impulsive personal purchase, make a note on your phone and choose to wait for 30 days. If you still want that instant pot and it fits within your personal spending budget, go for it! If not, delete the item from your list and move on.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Miscellaneous\"><\/span>Miscellaneous<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>While many of your household expenses are consistent from month to month, it\u2019s important to build in flexibility for inconsistent expenses that may not occur on a regular schedule.<\/p>\n<p>This \u201ccatch-all\u201d budget category can be used to host a party, get help with your taxes, buy holiday gifts\u2026 or handle whatever surprises life throws at you without having to break your budget!<\/p>\n<p><i>How can you decrease your miscellaneous budget percentage?<\/i><\/p>\n<p>Take a closer look at your miscellaneous spending to see how those expenses might actually fit into other categories.<\/p>\n<p><b>One of the easiest ways to improve your budget percentages across the board?<\/b><\/p>\n<p><a href=\"https:\/\/www.personalfinanceforbeginners.com\/how-to-ask-raise-work\/\">Ask for a raise at work.<\/a><\/p>\n<p>Increasing your income will (1) decrease the budget percentages for fixed expenses, or (2) allow you to spend, save, and invest more in budget categories while keeping the percentages the same.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"My_favorite_alternative_the_503020_budget\"><\/span>My favorite alternative: the 50\/30\/20 budget<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Do Dave Ramsey\u2019s budget categories seem like too much to keep track of?<\/p>\n<p>If you\u2019re looking for a simple budget plan that doesn\u2019t require getting quite so nitty-gritty, the 50\/30\/20 budget could be an easier set of budget percentages to build your finances around.<\/p>\n<p>In a nutshell, the 50\/30\/20 budget is split up into:<\/p>\n<ul>\n<li>50% toward primary expenses (\u201cneeds\u201d like housing, transportation, and food)<\/li>\n<li>30% toward secondary expenses (\u201cwants\u201d like a gym membership, Netflix subscription, or phone plan)<\/li>\n<li>20% toward savings, investing in <a href=\"https:\/\/www.personalfinanceforbeginners.com\/vtsax-review\/\">VTSAX<\/a> or another <a href=\"https:\/\/www.personalfinanceforbeginners.com\/best-index-funds\/\">index fund<\/a>, or debt repayment (depending on your personal situation)<\/li>\n<\/ul>\n<p>The 50\/30\/20 budget is what I\u2019ve personally decided to use for organizing my personal finances.<\/p>\n<p>Following the 50\/30\/20 plan checks all of the boxes for what a budget needs to cover while providing a little more flexibility for sticking to the guidelines.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_if_your_household_budget_doesn%E2%80%99t_match_these_percentages\"><\/span>What if your household budget doesn\u2019t match these percentages?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>So what if your household budget doesn\u2019t match the Dave Ramsey budget percentages (or for that matter, the 50\/30\/20 percentages)?<\/p>\n<p>Realize that these budget percentages are only recommended guidelines; they aren\u2019t hard rules that measure your financial success.<\/p>\n<p>You can make tremendous progress toward improving your financial situation without nailing every dollar down to the percentage point.<\/p>\n<p>If you can keep your major expenses (housing, transportation, and food) near or below 50% \u2013 while using at least 15-20% of your income to pay off debt or invest for the future \u2013 you will find that you\u2019re on the right track.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>If you\u2019re serious about improving your situation, creating and following a budget can be a critical step for understanding where your money goes and keeping yourself accountable as you establish new financial habits.<\/p>\n<p>The Dave Ramsey budget categories are one of the most popular sets of budgeting guidelines and provide a great starting point, but they aren\u2019t the only option.<\/p>\n<p>Consider the 50\/30\/20 budget as well, and don\u2019t fret if you aren\u2019t able to fit your current expenses perfectly into either budget. The best budget is the one you can stick to!<\/p>\n<p><i>How do you decide which budget categories and budget percentages work best for you?<\/i><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Are you creating a household budget but aren\u2019t sure how much money you should be set aside for each category of spending? If so, the Dave Ramsey budget percentages can be a great starting point. 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