One thing you can say about Dave Ramsey is he keeps things simple.

His baby-steps are quite easy to grasp. As for his other rules, he has, such as how much to spend on a car. (Answer: The total value of your vehicles, shouldn’t exceed half of your income).

So, what does Dave have to say about recommended household budget percentages? What is his ideal household budget look like?

Let’s find out…

Dave Ramsey Recommended Household Budget Percentages

Dave Ramsey has laid out a simple yet effective budget plan that anyone can use. So if you’re not into budgeting or you aren’t sure this is for you, that’s okay. All it takes is a little bit of time.

Building a monthly budget is a just another way of telling you where your money is going.

In his recommended method, Ramsey lays out a set of categories (clarified here) to spend a percentage of your monthly income on:

  • Food – 5 to 15%
  • Charity – 10 to 15%
  • Savings – 10 to 15%
  • Housing – 25 to 35%

Then, the rest of your budget —including clothing, transportation, insurance, and entertainment—would be allocated to 100%.

In visual form, we’d see:

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Dave Ramsey Recommended Budgeting System

When it comes to budgeting, one of the main questions people have is how do you actually stick to that budget?

That’s where Dave Ramsey’s recommended budgeting system comes into play.

To help with the discipline required, Ramsey suggests using an allocated spending plan. To summarize, an allocated spending plan is a budget that allocates expenses by pay period.

For example, if you’re paid on the 1st and 15th of the month, you’ll have a budget for each period:

  • 1st through 14th of every month
  • 15 through the end of the month


Other Budgeting Methods VS. Dave Ramsey’s Recommended Household budgeting Method

There are a few different budgeting methods I’ve talked about here.

They include the

Let’s take a look at how those methods differ from Dave Ramsey’s recommended budgeting method.

The reverse budgeting method

To put it into simple terms, the reverse budgeting method is the method of paying yourself first.

This is so you can fund the most important goals you have in your life.

After that, anything that’s left over after you’ve taken care of your necessities you can spend money on whatever you please.

Click here for a complete guide on reverse budgeting.

The 50-20-30 budgeting method

The 50/20/30 method is a popular budgeting percentage formula that can be easily broken down into three different sections.

The method recommends the following:

  • Use 50 percent of the money you bring in toward necessary items, such as housing and transportation
  • 20 percent of your income should be used to gain financial traction
  • Lastly, 30 percent of your income can be used to do whatever you wish

Click here for a complete guide on the 50-20/30 budget.

Top Tricks To Help You Stick To Your Budget

Sticking to a budget isn’t going to be easy.

It’s going to take some hard work and dedication.

Here are a few tricks to help you stay on track and stick to your new budget:

What’s Important About Recommended Household Budget Percentages

Rules of thumb are helpful.

For someone purchasing a home, understanding how much they can afford based on their income is helpful. The same can be said about how much one should be saving for retirement.

The issue is that personal finance is well–personal.

Your goal is to optimize YOUR fulfillment in life.

Looking back, there were times in my life medical bills were a huge expense. There were also times in life that travel was. Currently, savings is a high priority.

When it comes to percentage-based budgeting, there’s also going to be an ebb and flow according to what’s important in your own life.

While Dave provides good rules of thumb, what’s just as important is to understand what makes you happy.

Will lowering your transportation expenses and increasing your savings make you happier? Will spending more on housing and therefore lowering the amount you’re able to spend on entertainment increase your fulfillment? Or, will lowering housing so you can travel, be the best choice?

The goal is to get to a point where you’re optimizing expenses, for YOUR maximum fulfillment.

Need help with setting financial goals?

Download The Ways To Wealth free financial goal setting workbook:


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How To Budget Your Paycheck Like Dave Ramsey