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Dave Ramsey Budget Percentages [2023 Update]

Dave Ramsey Budget Percentages

When it comes to personal finances, Dave Ramsey budget percentages have always made it to the top 5 tips. 

It is completely normal to be overwhelmed in the world of personal finance and budgeting, constantly asking yourself questions like : 

  • What should I be saving every month?”, 
  • “How much should I allocate for food?”, 
  • “What am I going to do about my debt repayment?”.

You’re only human if you’re worried about these numbers because believe me, you’re not the only one.

I was quite surprised to see the average saving by age amount in the Uk, its much less than you think!

Thankfully, with a guide such as Dave Ramsey recommended percentages, budgeting becomes a little more manageable. Dave Ramsey budget categories can be your guide when you are doing your budget.

Dave Ramsey, a celebrated finance guru, once filed for bankruptcy in 1988. Yeap, you read that right.

He dived into the world of real estate at the age of 18, making roughly half a million dollars every quarter, and then proceeded to lose it all.

He is the living proof that anyone can come back from a financial setback, giving hope to those on the same boat.

If you’re someone who’s struggling to manage your finances, these Dave Ramsey budget percentages will help you get back on track.

Come on, let’s get straight to it. 

Remark: By the way it’s Dave Ramsey’s budget. Not David Ramsey budget. Hahaha! Many people think it’s David. So just for clarification.

Summary of Dave Ramsey Budget Percentages

  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%)


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A Budgeting Guide – Dave Ramsey Budget Percentages

Okay, so let’s break down Dave Ramsey recommended budget percentages to help you on your budgeting journey.

Now, Dave Ramsey has made it simple for anyone and everyone to start budgeting with these percentages.

However, do not put too much pressure on yourself that you have to follow these percentages to a T.

Let’s have a look at dave ramsey budget category percentages, and you can decide if this famous budgeting method is for you. 

Dave Ramsey Budget Percentages

Here’s the gist of dave ramsey budget percentages :

  • Giving (10%) – donation and charity to any platform of your choice
  • Saving (10%) – save 10% of your net income after tax
  • Food (10% – 15%) – this food budget should include groceries, eating out, etc
  • Utilities (5% – 10%) – bills for water, gas, electricity, etc
  • Housing (25%) – mortgage payments, taxes, etc
  • Transportation (10%) – fuel, car payments, etc
  • Health (5% – 10%) – doctor visits, dental care, etc
  • Insurance (10% – 25%) – life insurance, health insurance, auto insurance 
  • Recreation (5% – 10%) – any money spent on hobbies, movies, etc, should be kept within this budget
  • Personal Spending (5% – 10%) – shopping, personal grooming, etc.
  • Miscellaneous (5%) – any missed or forgotten payments. 

Even though that isn’t the usual Dave Ramsey budget percentages pie chart, you get a rough idea of how much you should be allocated for each category from your income. 

Understand Dave Ramsey financial plan, and than start planning yours.

You can use a more flexible budgeting percentage according to your earnings. It is not necessary to follow Dave Ramsey budgeting style or Dave Ramsey pie chart 100%.

Giving (10%)

Dave Ramsey made this the first category for a good reason. 

If you’re fortunate enough to be in a position to give to others, then do it. This act cultivates gratitude and you’ll learn how to appreciate the wealth that you already have. 

In Dave Ramsey monthly budget percentages, he recommends giving 10% of your income. Now, please do not assume that 10% is too little and that giving a small amount will not make a difference. It will.

Saving (10%)

Try to save 10% of your income every month. 

When it comes to savings, think about these three things; 

  • debt, 
  • fully-funded emergency savings, and 
  • savings for big purchases. 

Dave recommends saving up a starter emergency fund of USD 1000 as a cushion before settling your debts. 

Keep these three steps in mind as a rule of savings : 

  1. Save up for a starter emergency fund
  2. Settle your debts
  3. Save up 3 to 6 months worth of expenses

Food (10% – 15%)

The next Dave Ramsey percentage chart is for food. Which is needed in everyone’s life.

Dave Ramsey food budget percentage suggests keeping your grocery budget to around 10-15% of your income.

This might be a tough category to get used to, especially if you’re someone who enjoys nights out with friends, eating out, and ordering one too many venti Caramel Macchiato frap with extra pumps of caramel from Starbucks. 

This dave ramsey monthly budget percentage should include your groceries and total food consumption. Meal planning is the perfect solution if you’re struggling with this.

You can use Dave Ramsey budget example, as a guideline.  If you are someone who spends less, great job! If you spend more, then this is for you!

Get your groceries in bulk, buy seasonal produce, and plan. 

To get you started, here are 94 recipes for you to try out that will keep you within your budget!

Utilities (5% – 10%)

A pretty self-explanatory category. All your bills – gas, electricity, heater service, and water should be kept within 5% – 10% of your income.

You might want to include all your subscription services, cable, internet, and phone bills.

If you find that these costs add up to more than 10% of your income, perhaps it’s time to revisit all the plans and see which you can reduce. 

Switch to a cheaper phone or internet plan, cut down some of your subscription services, honestly ask yourself, you don’t need them all. 

Housing 25%

The next budget categories dave ramsey is for housing expenses.

Housing expenses are undoubtedly one of the largest expenses to incur in a household. 

It doesn’t matter if you’re thinking of paying your mortgage off early or if you want to get a grip on your mortgage payments, try to manage them within 25% of your income. 

You want to live in your home peacefully without your mortgage being a burden, so plug some numbers in and play around with dave ramsey budget calculator to see if you can afford to have an infinity pool and a full basketball court at the back of your home. 

Transportation (10%)

Anything that requires you to get from one place to another will require money.

 If you rely on public transport, then you will be spending on monthly bus passes or train passes. This 10% should include any Uber or Lyft rides you take as well. 

Health (5% – 10%)

This is an important dave ramsey budget category percentage because falling ill is inevitable and you’re going to need money to take care of yourself. 

This category represents any visit to the doctor, dental care, etc. Health insurance is not included in this category. This allocation just shows how these assigned percentages will change month to month.

If you get too excited reenacting The Lion King after watching the play and break a leg, then you’re going to be moving these percentages around to fund your medical expenses. 

Insurance (10% – 25%)

Ah yes, the mundane topic of insurance. That’s the next component on dave ramsey budget chart

We know we need it but because it is intangible, no one wants to spend money on it.

I may sound like a broken record, or you may have heard this a gazillion times from a friend, agent, or your neighbor’s cat, but insurance is a necessity. 

It protects you should any unforeseen circumstances take place. The types of insurance you should have are :

So be sure not to skip out on these dave ramsey spending percentages.

Recreation (5% – 10%)

Recreation is also included in dave ramsey percentage budget.

Do you want to join a weekly pottery class downtown? Make sure they fit within these percentages. 

You want to go to a mini-concert because an indie singer just dropped by your town? Make sure they fit within these percentages. 

A staycation now looks good, doesn’t it? Make sure they fit within these percentages. 

You get the picture. Hey, we’re all about the work and play balance but I don’t know about you, I tend to go overboard with the “play” sometimes. 

I used to go out every time a friend calls me out for dinner and drinks without realizing how draining that is to my bank account. 

So, have fun, but do it responsibly and try to fit them in dave ramsey budget percentages calculator. 

Use Dave Ramsay budget and Dave Ramsey method to save your financial condition.

Personal Spending (5% – 10%)

This allocation is for any purchase you’d like to make. Yes, once again, do this responsibly. I’ve maxed out my credit cards one too many times and don’t want anyone to repeat the mistakes I did. 

This allocation is inclusive of shopping on Amazon, getting new clothes, personal grooming, home decor, etc. 

Miscellaneous (5%)

This allocation is for any expenses that aren’t included in the budget or unexpected expenses that pop up.

As much as we’d like to budget down everything down to the last cent, it is sometimes impossible to do so.

Use this fund to pay anything you’ve forgotten to include in your overall budget, trust me, there will probably be a thing or two. 

Are The Dave Ramsey Percentages Realistic?

Dave Ramsey himself states that the dave ramsey percentages for the budget are mere guides to be followed.

No two household expenses or no two individual’s expenses are the same.

 These percentages can be easily allocated for someone who’s not married, has minimal commitments, and lives alone. 

Dave Ramsey percentages for budget are very clear cut. It is the common budgeting percentage rule.

However, these exact percentage allocations may not be suitable for a family of four.

Tweak Dave Ramsey budget breakdown percentages to fit your budget because the only way to stick to a budget is if it is realistic and achievable to you. 

How Much Does Dave Ramsey Say To Save A Month?

According to dave ramsey saving percentage, we should try to save a minimum of 10% of our net income after tax. 

However, it varies based on your financial situation. Perhaps, you would need to crunch the numbers down and look at how much you can afford to save. 

In the bigger picture, these are the few funds that you should try to save for :

It doesn’t matter how much you should save in a month, the important thing to do is simply to start saving. 

Dave Ramsey Budget Percentages

Why Use Budget Percentages?

It is known that when it comes to budgeting, you’re essentially setting aside money for different purposes. 

But what are budget percentages?

Budget percentages is when you allocate certain percentages of your income to different categories of expenses in your life.

Just like dave ramsey percentages, he laid out a blueprint for everyone to follow if you’re not sure where to start.

Why use budget percentages? 

By using budget percentages, every dollar that comes out of your income has a purpose.

When you assign where your money should go, you will gain a holistic view of your finances, making it easier to achieve any financial goals that you may have. 

Note – If you want to learn more about the main purposes of a budget, how to create one, and how it can improve your financial life, check out my article: What Is The Purpose Of A Budget? [ Reason #8 Will Surprise You]

The commonly used budget percentages are the :

  • 50/30/20 rule 

Once you’ve received your paycheck, split them into three parts ; 50%  on needs and essential expenses, 30% on debt repayments or savings , and 20% on investments.

  • 70/20/10 rule

Once you’ve received your paycheck, split them into three parts ; 70%  on needs and essential expenses, 20% on debt repayments or savings , and 10% on investments.

  • dave ramsey savings percentages

When using budget percentages, your finances will be organized and you will have an easier time monitoring them.

Dave Ramsey Budget Percentages

What Should My Budget Percentages Be?

Okay so now that you know that are budget percentages, how do you determine what are your budget percentages?

The first and easiest option would be to use Dave Ramsey’s suggested budget percentages as a guide to help you get started. Dave Ramsey quick start budget is definitely a good start as you begin this journey.

Budget percentages Dave Ramsey will ease your transition into budgeting because the categories are already laid out for you. 

If you can work your income to fit into Dave Ramsey budget ratios, you can use his guide and tweak the percentages as you go. Dave Ramsey ratios will be your guideline as you prepare your budget.

However, if you’re still confused about how to allocate your income for different expenditures, try asking yourself these questions to give you a better picture. 

Dave Ramsey Budget Percentages

There is no one ideal budget that fits every family, and if you’re being told that, know that it’s not true. 

It’s okay if your budget differs from the thousands of people online, just practice what works for you. Try drawing up your own dave ramsey budget pie chart and take it from there.

Or use Dave Ramsey allocated spending plan as your guidance. No pressure! Do what works for you because there’s no budget percentage rule!

Alternatives To Dave Ramsey Percentages

Okay so you find the Dave Ramsey budget percentages to be a little overwhelming, relax, you can start with other budgeting methods listed below and ease your way into it later on once you’ve got a grip on your finances. 

One important mindset to have when drawing up your budget is to not look at it as a daunting task but more of an organizational system.

The last thing you’d want to feel is stress when sorting out your finances and budgeting is supposed to make you feel liberated around your finances. 

Try out these alternatives to the dave ramsey budget percentages for a change :

1. 50/30/20 Budget

What is the 50 30 20 budget rule?

Dave Ramsey Budget Percentages

Senator Elizabeth Warren explained this classic budgeting method in her book All Your Worth: The Ultimate Lifetime Money Plan.

If your finances are a mess right now, don’t worry, you’re not alone as research shows that 65% of Americans have minimal savings stashed up.

50/30/20 is an easy budgeting method to help you get started, similar to dave ramsey income percentages.

This budgeting method is great for anyone who’s just getting started or if you’re someone who simply does not have the patience to track every expenditure, breaking them down into different detailed categories (like me). 

Once you’ve received your take-home pay, divide them into 3 categories :

  • 50% of income should be spent on your needs/expenses
  • 30% of income should be spent on your wants
  • 20% of income should be saved or spent to clear any debts

50% On Needs/Expenses

Okay, so what sort of expenses fall under this category? 

Think about your everyday regular living expenses.

Expenses such as housing, utilities, health insurance, groceries, gas, etc, are all essential expenses. They’re your needs as these expenses will incur every month without fail. 

If your expenses exceed 50% of your income, review them and look at areas where they could be improved. Can you switch to a cheaper mobile and internet plan?

Perhaps you could bulk buy your groceries and meal prep to save money on groceries and food. 

Regardless of how many fixed expenses you’ve got, they should be contained within 50% of your income. 

30% On Wants

Ideally, you should not spend more than 30% of your income on non-essential items. 

Expenses such as shopping, vacation, movie nights, those extra couple of drinks on ladies night, morning hangover breakfasts, you know what I’m talking about now. 

I know it is very tempting to spend money at the moment especially when the flash-sale deal simply looks too good to resist.

However, these expenses are affecting your finances and that’s what we’re trying to avoid, hence try to keep them within 30% of your income. 

20% On Savings/Debts

There are essentially two areas that fall under this category :

  • Savings 

Emergency savings, contributions for retirement, 401(k), Roth Ira, or even if you’re saving for a specific goal, like a wedding, or a trip. 

  • Debt Payments

Credit card debt, I’m looking at you. This high-interest debt should be a priority to clear off if you have one. 

There you have it, a detailed breakdown on the 50/30/20 method, take it with a grain of salt, and adjust it according to your finances. 

2. 70/20/10 Rule

What is the 70 20 10 Rule?

Dave Ramsey Budget Percentages

The 70/ 20/ 10 rule is similar to the 50/ 30/ 20 rule, just with different compositions.

Once you’ve received your take-home pay, allocate 70% of your income to your living expenses, 20% to your savings or debt repayment, and invest the last 10% of your income. 

The budgeting percentages should look something like this : 

(Expenses incurred monthly)
(Savings or debt repayment)
(Investment / charity)
Mortgage repayment
Utility bills
GasHealth Insurance
GroceriesCar Payment
Emergency savings
Sinking fund savings
Retirement savings
Credit card repayment
Student loan repayment
401 (k)
Roth Ira
Mutual funds
Stock trading

Now that you’ve gotten a good understanding of the rule of thumb of budgeting – both 50/30/20 and 70/20/10 methods, take your pick and see which is suited to your lifestyle.

Create your budget percentage breakdown, and start having control of your finance!

3.Cash Envelope System

Also known as the cash-only system, this method is just what it sounds like! You are to use only cash for your expenses, none of that credit card or debit card is used here.

To get started, you will need to have your expenses sorted out. Which areas do you spend the most on?

Identify those areas and list them down, together with how much you spend on these categories monthly or bi-weekly, depending on your paycheck frequency. 

For example, it could look something like this :

  • Food – USD 300
  • Utilities – USD 250
  • Entertainment – USD 200
  • Car Payment – USD 150

Next is to have an envelope designated to each category and fill them up with the amount required. In the case of food expenditure, since you’ve allocated USD 300, you are to ONLY spend within the amount. 

Once your envelope runs out of money, then you’re not to spend anymore. When you practice this system, you can see your spending pattern in each category.

What used to be a mindless expenditure with a credit or debit card is now transformed into something mindful. 

When you’re physically handing in cash for each transaction, watching the cash reduce in the envelope, you will tend to assess the necessity of said transaction, something that is looked over when swiping the card.

One thing to look out for is that you could easily lose it since you’re going to be carrying cash around. Luckily there are some cute cash envelope binders to keep your money organized and safe with this system. 

4.Sinking Funds

If you think the idea of tracking expenses and creating percentages is tedious but you’d like to be more organized with your finances, then sinking funds are perfect for you!

Sinking funds are perfect for any large or recurring expenses that you know you’ll incur yearly or monthly.

A sinking fund is a fund created by you, usually in the form of a saving account, where you set aside money periodically for a recurring payment. 

For instance, if you know your car insurance payment is due in August and costs about USD 200, you can set up a sinking fund for that payment in January and save USD 30 each month up until the payment is due.

When is time to make the payment, you’ve got your funds all sorted out!

This way, you don’t have to feel like you’re ripping off a large chunk of money out of your paycheck. If you’ve got different planned expenses, give this method a go. 

5.Reverse Budgeting

With this method, instead of meticulously tracking your spendings and savings on what’s left, you’re going to do it the other way around. 

Reverse budgeting is when you pay yourself first. What does that mean?

It means, when you receive your paycheck, pay off all the bills, set your money aside for savings and investment, and do what you’d like with the rest of the money. 

I use this method of saving! 

When you’ve sorted out your savings and investment as soon as you receive your paycheck, you’re indirectly having your back.  Dave Ramsey investment chart say’s the same!

6.Zero-Based Budgeting

Zero-based budgeting is when you give “every dollar a job”. 

This method will have you allocating every dollar to either expenses, debt, savings, or all three. The idea is your income minus your expenses should amount to zero. 

With this method, you will be informed about how much money is coming in and going out and will help you avoid spending money you don’t have.

FAQS On Dave Ramsey Budget Percentages.

What Should I Do With 20k In Savings?

 First of all, great job in achieving 20K in savings! That’s not a small sum of money and you managed to do it! So how about we try to make this 20K grow even more?

Here are some tips on what to do with 20K in savings:

Dave Ramsey Budget Percentages

Dave Ramsey How To Budget?

If you are thinking about how to budget using the Dave Ramsey style, I have listed down the steps for you. 

  • Step 1: List your income. 
  • Step 2: List your expenses. 
  • Step 3: Subtract expenses from income. 
  • Step 4: Track your expenses (All Month Long) 
  • Step 5: Make a new budget before the month begins.

What Percentage Of Your Income Should Your Mortgage Be Dave Ramsey?

If you are thinking about what percentage of your income should your mortgage be, the answer is to calculate how much house you can afford, using the 25% rule. 

That would be dave ramsey budgeting percentages for mortgages.

This means never spending more than 25% of your monthly take-home pay (after tax) on monthly mortgage payments. 

Dave Ramsey Budget Percentages

What Is The 70 20 10 Rule Money?

The 70 20 10 rule money is the biggest portion 70% goes towards living expenses. 

20% goes towards repayment of debts, or to savings if all your debt is settled. 

10% is for a ‘fun bucket’, money set aside for the things you want after your essentials, debt, and savings goals are taken care of.

How To Budget Percentages?

The best way is to set the budget percentages that work best for you. 

The popular 50/30/20 rule of budgeting encourages people to save 20% of their income every month. 

The remaining 50% is for needs, such as debts or rent and food. The last 30% of your income is for other spending.

What Are The 4 Components Of A Budget Dave Ramsey?

If you are unsure or wondering what are the 4 components of a budget, the 4 components of a budget are food, utilities, shelter, and transportation. 

Make a budget category for each of these. After creating a budget category for those components, then create budget lines underneath for your specific expenses.

Dave Ramsey Budget Percentages Calculator

Every month you need to have a specific portion for your expenses. 

The Dave Ramsey recommended Household budget percentages calculator comprises the following: 

  • Housing costs: 25%
  • Saving: 15%
  • Food: 12%
  • Childcare: 12%
  • Giving: 10%
  • Miscellaneous: 5%
  • Insurance: 4%
  • Utilities: 4%
  • Personal spending: 4%
  • Lifestyle and entertainment: 4%
  • Transportation: 3%
  • Health: 2%

How To Calculate Percentage Of Expenses To Income?

It is recommended to use the formula of cost-to-income ratio. For calculating the cost-to-income ratio, first, divide your operating cost by operating income.

Then multiply the answer by 100. For instance, a company’s operating cost is $25,000 and its operating income is $80,000. Hence, the calculation –  (25,000 ÷ 80,000) x 100.

How Much Should I Spend On A Car Dave Ramsey?

Thinking about how much should I spend on a car is the general rule of thumb. 

The total value of your vehicles (anything with a motor) should never be more than half of your annual household income. 

As per Dave’s, you should not buy a new car until your net worth is more than $1 million.

What Are The 3 Main Types Of Budgets?

The 3 main types of budgets are based on how feasible the estimated income and expenses are, the government categorizes the budget into three types.

As taxpayers, it is important to understand these types of budgets. 

Following are the 3 main types of budget that can be categorized into. 

  • Balanced budget. 
  • Surplus budget. 
  • Deficit budget.


So we’ve gone through the famous Ramsey budget percentages. Do you think you can start taking action, implementing these percentages as a guide to get a head-on your finances? 

Baby steps are all that matter because getting control of your finances is not easy. You’ve got this champ!

Lastly, it is not David Ramsey budgeting but Dave Ramsy budgeting. Hahah! Hope I cleared up your confusion. 🙂

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