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When you are ready to start budgeting, you might be wondering what your monthly budgeting percentages should be.
We use Dave Ramsey’s recommended monthly budgeting percentages, and adjust as needed for our debt payoff goals.
Article updated on June 15, 2021 (original post January 2020)
There is no hard and fast rules on monthly budgeting percentages, but there are definitely a few guidelines that you can stick to in order to free up the most cash flow for saving, investing, and even having fun!
These monthly budgeting percentages are just a guide, and do not include debt payments.
Debt payments will come out of your extra cash flow outside of your basic expenses.
Obviously, the more you can crank down on your necessary monthly budgeting percentages, the more you will have to throw at debt.
Related: How we cut over ,000 of monthly expenses
For extra budgeting help, grab your FREE budget planner here!
Dave Ramsey Budget Percentage Breakdown
We use Dave Ramsey’s budgeting percentages as a guide for our household budget, and make changes to fit our current debt payoff goals.
More Budget Help:
- How to Make a Budget for Beginners
- Why You Need a Budget for Your Household
- Budget Categories You’re Probably Forgetting
- How to Have a Family Budget Meeting
Giving 10%
This is a personal decision, and as Christians, we believe in giving. I will say that while we are getting out of debt we don’t give the full 10%, but plan to once we are debt free.
Even if you aren’t religious, or don’t give to a church, it can only help your happiness and prosperity to give a little money away to a good cause each month!
Saving 10-15%
This will change depending on where you are at in your debt payoff or wealth building journey.
We follow Dave Ramsey’s baby steps, and only have our $1,000 mini emergency fund until we are finished paying off debt.
Once you are out of debt completely, save up 3-6 months of expenses, then you will move onto investing and building wealth!
Related: Should I Pay Off Debt or Save?, How to Save $1,000 for Baby Step 1
Food 10-15%
Is this category not the BIGGEST budget buster for your family?
The weekly grocery bill is always a struggle!
Dave Ramsey’s food budget percentage is a great jumping off point, but I like to stick to a guide of about $100 per family member per month.
This means if you have 4 people in your family you should try to keep the food budget around $400!
We meal plan, coupon (not extreme), and avoid eating out to keep our food budget as low as possible.
Right now, we try to keep our food budget between $400-$500 / month which has been working out pretty well.
Frugal hack: I love to use receipt scanning apps like Ibotta or Fetch Rewards, to get cash back, instead of clipping coupons.
You might also like: 14 Ways to Save Money on Groceries, 8 Simple Ways to Stick to Your Grocery Budget
Housing 20-25%
This is an easy category to control, but sometimes we make bad choices and end up spending way too much in this area!
If your rent or mortgage is too high, you will be struggling to have the cash flow that you need to cover the rest of your monthly budget categories.
Keep your rent or mortgage payment between 20-25% of your take home pay so your home feels more like a blessing instead of a curse.
Read: How to Budget for Rent
Utilities 5-10%
There’s not much we can do about this category here, because we definitely need lights, water, and gas to run our homes.
However, having too much house, can also mean your utility bills are much higher.
We moved to a smaller house in order to make more progress on our debt, and the electricity bill was cut in half.
Read: 50 Frugal Living Tips & Ideas
Transportation 10%
Small car repairs, gasoline, and oil changes are all inevitable as you operate your vehicle regularly.
Stay prepared for these expenses so that you are not digging in to your emergency fund for an “unexpected” oil change.
Read: How to Save Money on Gas
Health 5-10%
Even if you have good health insurance, you will likely have some out of pocket costs like co-pays or deductibles.
Set aside a little fund for out of pocket health costs (maybe a big fund if it’s cold and flu season!)
Related: How to Save Money on Health Care
Insurance 10-25%
Assign a percentage of your monthly income to cover all of the important insurances such as Life, Auto, Home/Renter’s, and Health.
Make sure you shop around to get the best possible deals so you can keep this expensive category as low as possible.
Read: Budget Categories You’re Probably Forgetting
Entertainment 5-10%
Entertainment can mean your monthly Netflix subscription, or concert tickets for date night.
If you’re trying to pay off debt, you can squeeze this category down, but make sure you budget for some entertainment each month.
Related: Cheap or Free Date Night Ideas
Personal Spending 5-10%
You need to be able to have a little fun or you’ll probably go crazy!
Set aside a little fun money for you and your spouse so you have some free reign to shop for clothes or pick up the latest cool tech gadget.
As long as “fun” is in the budget– go for it!
Miscellaneous 5-10%
It never fails. We always have unexpected or miscellaneous expenses come up each month.
It’s best to just accept that this will happen, and set aside the cash for these miscellaneous items.
Do you stick to Dave Ramsey’s monthly budgeting percentages, or do you have a different method for budgeting? Let me know in the comments!
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hi! I'm shannon
I’m a wife, mom of three, doctor, and blogger! In 2018, I decided to turn my mom blog, into a personal finance blog so others could follow along on our journey to pay off over HALF a MILLION dollars in student loan and practice start up debt. I hope you enjoy following along, and maybe even find some inspiration along the way.
Hey! Your budgeting stuff is really great! I do have a question though. I wonder how anyone can find a rental or mortgage under 30% of their income without being in the bad part of town? What are your suggestions for accomplishing that besides make more money?
Author
Hi Michelle! If you live in a big city it can definitely be difficult to accomplish this. It might be worth it to drive to a little further to work or school, so you can live in a better area. It’s usually less expensive to live in a suburb than a city. We ended up moving to a cheaper rental and we found a house in a great school district, but it is REALLY tiny. So, we were able to sacrifice space for the good schools. It can be hard to find the perfect combination, but try changing some of your search criteria and see if you can find more options! Thank you for stopping by my blog!
I’ll see if those options would be doable in our searches. Thanks!
I would like to start using your budget planner. What should I list under miscellaneous?
Author
Hi Brianna! For miscellaneous, I list anything that I could put on pause and live without if needed…like if you suddenly lost your job or something. Then I do my best to try to decrease those miscellaneous expenses to put more money toward debt (or savings if you don’t have debt).
Hi Shannon, I’ve been following you since I found you on tik tok, but I’m having a hard time trying to figure out which category my $800/month childcare cost should go? It’s obviously pretty vital since it allows me to work full time — and still bring home quite a bit after this expense. Thank you!
Author
Hi Victoria! Yes, I would put that in your “vital” category. For us, we were able to reduce it quite a bit when I went part time, but it made sense for us since we work together at our own office. If you need the expense to go to work, then I would definitely put it in your vital category!