Dave Ramsey Budget Rule
I know you are wondering why you should use a Dave Ramsey budget rule? But he is an icon in the money management and personal finance field. He is known for his radio personality.
However, one reason why he is a prominent person in the personal finance field is because he was able to build a $4million real estate company, before the age of 28 and also lost everything by the age of 30.
So he uses all the experience and lessons, he has gotten from his series of failures in personal finance, to help people with financial issues get back on their feet.
I have a question? Please who doesn’t have a financial issue? We all have but at different levels.
The Life changing Budget Rule: 50/20/30 Budget Rule
Table of content
The milestone he has achieved
What his rule is all about
Giving – 10%
Saving – 10%
Food – 10 to 15%
Utilities – 5 to 10%
Housing – 25%
Transportation – 10%
Health – 5 to 10%
Insurance – 10 to 25%
Recreation – 5 to 10%
Personal Spending – 5 to 10%
Miscellaneous – 5 to 10%
Can we pay debts with this rule
How do we achieve this, without procrastinating?
Conclusion
The milestone he has achieved
For me, I would say Dave Ramsey milestone is about him learning and teaching others how to achieve that financial freedom they desire.
He had done extremely well in his career from his books, to his radio show and also his financial peace university which is a very amazing place to be.
This university helps people with financial issues build and learn new habits so that they can have new finance habit.
What Dave Ramsey rule is all about
So, what is the Dave Ramsey rule all about? He said this rule is a starting point to your savings journey. And they are listed in percentages.
Below you would be seeing different list and percentages.
Giving – 10%
So he advised that you give 10 per cent of your income to giving. So, every income you receive you should bear in mind you have 10 per cent to give out.
Yes, this part really touched me because it goes with the saying I hear a lot. When you give, you receive more.
Is this really what the saying is? If it isn’t please leave the right one in the comment session.
Saving – 10%
Saving is one thing that’s hard for most students to do because we just save and later when we are in money crisis we go back to the money. So Dave advised that you save 10 per cent of your money.
Food – 10 to 15%
I love food, crying!! But from our suggested budget plan, we have to save 10 to 15 per cent for food.
But how do we do this? I know we can achieve this through eating right and cooking our meals ourselves.
Utilities – 5 to 10%
House maintenance is one thing we can’t skip. So while budgeting we should budget our house maintenance too.
Housing – 25%
This has to do with our rent. Do you set aside a certain percentage of your income for your rent? Or you spend first before you think of your rent.
Or are you planning of buying a house and you don’t know how to save for it.
This is what he said you should do. You should save 25 percent of your income for it.
Transportation – 10%
We must go out and live our lives so we should consider setting aside a certain percentage of our income, for our moving out daily.
Health – 5 to 10%
We must maintain ourselves, so we can live long and also live a healthy life, daily.
Insurance – 10 to 25%
There are different insurance policies we need in our lives and most especially our health insurance please we need to put that in check.
Recreation – 5 to 10%
I know you might be asking where is the budget for going out to the cinema. Please here it is.
So sorry it didn’t come first. In as much as you are going to have a budget list for yourself, you need to have fun too.
So all your fun activities this is where they should be.
Personal Spending – 5 to 10%
As humans, we love looking good. So if you love fashion this is where your budget would be. Also home decor and any other personal items you need.
Miscellaneous – 5 to 10%
yay!! I know you have some things to buy in your bucket list. They are your miscellaneous expenses. Get them here.
Please note that this is just a starting point, it’s a guide to starting your budgeting journey to live a financially free life. It’s just a new skill you need to learn.
Can we pay debts with this rule
Yes, you can use this budgeting guide to pay your debts. All you have to do is just create a list of your debts and have a percentage of your income dedicated to it monthly.
How do we achieve this, without procrastinating?
Procrastinating is one of the habits you are going to be unlearning with this rule. All you have to do is try your best to stick to the rules either monthly or weekly. So, it depends on when or how you receive your income.
Conclusion
Dave Ramsey has helped us by giving a detailed guide to starting a budget life. Learning the habit of budgeting in our everyday life financially, can be hard.
But, with this guide, we should be able to learn discipline so we can achieve the financial freedom we need.
